Part II

Written by Elizabeth M. Rathburn

How Did We Get Here?

How did we get here? With any new advancement in technolo- gy or development in the online world, we always seem to ask that question, but we don’t always take the time to take a step back and answer it. In this case, there is quite the story leading up to how exactly creator fandoms came to be. They did not just pop up overnight. Many things had to develop for there to be an ecosystem where there is the possibility you can make money from making videos – either through more traditional (at this point) sponsorships, or the newer idea of getting regular monetary support from your audience.

This paper will cover the history of YouTube, podcasting, and ; multi-channel networks and ; crowdfund- ing; and Patreon.

History of “The Platforms”

In order to get to where we are now, YouTube had to become YouTube: the site with a monopoly on user uploaded video content. And for those who weren’t so inclined to create vide- os, there were other options available in the form of - ing. Twitch was also created, now with the monopoly on streaming primarily gameplay. These platforms allow for cre- ators to join with them to make money or find sponsorships, making it possible for some people to make their hobby their living.

YouTube. YouTube is not the only video hosting website, but it is the largest, most popular, and farthest reaching. It was created in 2005 by three former PayPal employees named Jawed Karim, Steve Chen, and Chad Hurley and was later ac- quired by in October 2006 (Dickey, 2013). Beginning in May 2007, people were able to participate in YouTube’s Partner Program and make money for what they were doing. Some people were able to quit their day jobs and turn their hobbies of making videos into their jobs.

1 Google advertising on YouTube began in August 2007 and kept developing and growing from there, having up to sev- en different formats of ads by January 2009 (Jackson, 2011). YouTube started to create relationships with major companies as partners, including Disney, who make six fig- ures in advertising on YouTube.

But what did it mean for a creator to be a partner? This meant these people were able to monetize their videos and allow YouTube to place advertising around, on top of, or before and during their videos. Becoming a YouTube part- ner is not open to just anyone, and that threshold has changed several times in the past few years. In the begin- ning, all that really mattered was you had to have an es- tablished following and audience and then apply. That meant only the very top , ones with millions of subscribers, were able to participate (YouTube elevates…, 2007). A next threshold was a channel had to have at least 10,000 lifetime views. And while there have been many up- dates and scandals back and forth over the years between creator content, advertisers, and YouTube, 2017 was the worst year. This prompted YouTube to make some changes in early 2018. For one thing, instead of 10,000 views, channels had to have 1,000 subscribers and 4,000 watch hours over the past 12 months (Alexander, 2018). This change and the other changes made for higher priority channels were not bad things for YouTube. 2017 was the year of the “Adpocalypse,” when many advertisers pulled their ads from YouTube. From a business standpoint, these changes made sense. YouTube had to get its platform un- der control or it would no longer be viable.

Even for creators who met the new threshold, had a follow- ing, and did not break any of the strict YouTube Communi- ty Guidelines, the amount of money they were seeing from just YouTube advertising was shrinking and shrinking. Were there other options in order to keep making videos for a living?

Podcasting. Podcasting is actually older than YouTube. 2004 is when Adam Curry and Dave Winer are credited to have created the first podcast (Podcasting historical…, n.d.). The idea of podcasting came into the mainstream when Apple offered over 3,000 free on iTunes in 2005 (Quah, 2017). Now many more people had access to podcasts and when smart phones such as the iPhone al- lowed listeners to download podcast audio files in 2008, more people started listening. As a result, more people start creating.

2 Just as YouTube started to add advertising to their videos, the podcasting industry began to allow for advertising as well. Like with traditional radio, podcasters could give spe- cific calls to action with coupon codes or simply say “This episode was brought to you by…” It took until 2014 when Apple’s podcast app went native for advertisers to take pod- casting as a legitimate format worth the time invested into finding the right podcast for their product or service. By the end of 2017, ad revenue from podcasts, was predicted to reach $220 million, 85 percent higher than 2016.

Now, there are many different places where you can either host your own podcast or listen to someone else’s podcast. There are apps available for iOS and Android devices, in- cluding the Apple Podcast app, the Google Podcast app, Stitcher, and Spotify (Winn, 2019). Many YouTubers also have their own podcasts, and may upload a video version of the podcast to their channel.

Twitch. Twitch is also about as old as YouTube and pod- casting, in its first incarnation as justin.tv in 2005 (Cook, 2014). This was created by Justin Kan, and it was described as a site where one could stream their life a la Big Brother. In 2014, it was acquired by Amazon and renamed Twitch. Now, it is primarily used to watch livestreams of games (Key turning points…, 2017). Watching live gameplay is one of the biggest categories on YouTube and it makes sense that a platform dedicated to just livestreaming would in- clude a large amount of gameplay as well. Just like with YouTube and podcasting, Twitch streamers are able to mon- etize what they are doing as a Twitch affiliate or a Twitch partner (Mior, 2018) Though it is not the only site with the ability to livestream gameplay (YouTube being another ma- jor one), it has a major focus on community and creating a fun experience for both the streamers and the users.

How to Make Money

While with all these platforms there is the option to either partner with the site by yourself or have sponsorships with outside advertisers, there are also other options available to give the creator some ease of mind. A creator could join a multi-channel network, they could use a crowdfunding site to fund a one-time project, or they could create a Patreon account.

3 Multi-channel networks. Multi-channel networks (MCN) “are organizations that partner with YouTube channels (and possibly other video sharing platforms) to offer services to contracted content creators” (What is a YouTube MCN?, 2016). The services they provide can assist the creators in managing their channels, improve their video quality by of- fering access to production and editing facilities, increase their income by offering connections to sponsorships, and optimize their content to become friendlier for YouTube’s algorithms. Because all channels are a part of a network, there is also a degree of cross-promotion to different audi- ences within the network as a possibility of growing a new- er channel’s audience.

YouTube itself has an article for creators providing infor- mation about MCNs. It also offers a word of caution for all creators considering joining an MCN. “MCN contracts are legally binding” and “before you join, make sure you under- stand what services and/or results the MCN will deliver in exchange for your payment” (Multi-Channel Network…, 2019). YouTube also states any revenue from YouTube will go through the MCN’s AdSense and will be distributed by the MCN. It is in these contracts where some of the issues creators have with MCNs come into play. There have been instances of broken contracts, especially over the issue of owning intellectual property, and smaller channels not feel- ing properly cared for if the MCN was managing a particu- larly large number of channels. MCNs have also started to drop channels en masse as YouTube changes and updates its policies, some seemingly for no reason, so that now “instead of MCNs being an entry-level partnership for up- and-coming creators, companies will work with a few hun- dred people who are already popular” (Alexander, 2018). MCNs are also being bought by even bigger production companies, such as Maker Studios bought by Disney in 2014 or TV bought by Dreamworks (Ward, 2017). These companies are continually evolving just like the rest of the online world, but the average creator is not as excited about the changes.

The future of MCNs is a little uncertain, especially in the wake of the 2018 Defy Media shutdown and subsequent fallout. In November 2018, Defy Media announced it would be shutting down. In their statement, they said it would be focusing on finding homes for their brands, which include Clevver and Smosh (Spangler, 2018). While it was a bit of a shock since the company was representing some very successful brands, statements from the creators them- selves made viewers feel optimistic.

4 This story changed very quickly as the creators then started announcing Defy still owed them money, their checks for AdSense from September and October, and no one was there to answer their calls (Jarvey, 2018). As of writing, the $1.7 million owed to more than 50 creators has not been given to them and probably never will. Ally Bank is holding onto that money because of a loan they made to Defy Me- dia, which Defy will not be able to pay back (Alexander, 2019).

Inherently, MCNs are not a bad thing. In fact, now more than ever, the most important service they provide is copy- right protection (Patrick qtd. in Alexander, 2019). But may- be they are not the way of the future. Looking at a story like what happened with Defy, it is no wonder there are many online creators stepping away from being a part of a net- work and becoming completely independent and audience funded.

Crowdfunding. Crowdfunding is the process of raising money in a one-time amount, usually over a fixed period of time, through a specific website created for the purpose of fundraising. Some popular crowdfunding sites include Kick- starter, Indiegogo, and GoFundMe. Crowdfunding can be used in many different situations, such as to pay hospital bills, to raise money for disaster victims, to start a business, or to launch a creative endeavor. As a result of using the site, the site will take a small percentage of the funds raised as well as a small fee (Kumar, 2019). The rest goes to the creator of the cause/campaign/project. Those who support these initiatives, often called “backers,” can be offered dif- ferent rewards based on how much they donated, especially for entrepreneurial or creative endeavors. This is completely up to the creator as to what to offer, but the incentive can be enough for some people to donate.

Many studies have been done about crowdfunding, looking into the successes and failures of crowdfunding, the issues that may occur, and the role of the creator. There have been thousands of projects funded through crowdfunding, and not just for startups and unknowns. One of the more high-profile examples from a media-based fandom is the fan -funding of the Veronica Mars film in 2013. The creator, Rob Thomas, and star, Kristen Bell, set up the fundraiser on Kickstarter for a movie continuing the 2004-2007 television series Veronica Mars (Rappaport, 2014).

5 They set a goal of $2,000,000 and raised over $5,000,000 through over 90,000 backers. And, according to the pro- ject’s Kickstarter page, at the time of funding, this project was the faster project to reach $1,000,000 and $2,000,000, as well as the highest-funded film through Kickstarter and the most backers in Kickstarter history (The Veronica Mars…, 2013). Some of the success was due to the Kickstarter rewards they included for backers. Some of the lower tiers included receiving the shooting script, a t- shirt, and a DVD of the film. But some of the highest tiers included for $6,500 being able to name a character, for $8,000 being able to be a featured extra, or the highest ti- er set at $10,000 being able to have a walk-on speaking line in the movie.

Another example from this same time frame, but from a creator fandom, would be theater production company Team StarKid and how they have been using Kickstarter for several years to fund the creation of three shows. Acci- dentally launched to Internet fame after their first musical A Very Potter Musical went viral on YouTube in 2009, upon graduation from the University of Michigan this group of theater and acting majors stuck together to continue to create original musicals, sketches, , and tours. Each time they launched a Kickstarter, the backers more than doubled the fundraising goal. For example, with their first Kickstarted show, Twisted, their original goal was $35,000 with the writers planning to put up the rest of the costs for a $60,000 show (Brown, 2018). The backers raised about $143,000, allowing them to add more mem- bers to the cast, puppets, better microphones, and a fight choreographer (Twisted…, 2013). For this first show espe- cially, it was hard to ask strangers for money, and there was a bit of a learning curve when coming up with the re- wards. But they have long since realized the power of hav- ing a very eager and supportive fanbase.

There can be issues with crowdfunding, including someone stealing untrademarked ideas for a creative endeavor or a business, or scams that steal backers’ money and never give out backers’ rewards. However, projects have a higher chance of success when the project creators already have an audience, an audience that trusts the creator to use their money for what they say and give out rewards appro- priately in return.

Crowdfunding is almost always for a single endeavor, a one -time fundraiser. What if creators are looking for more con- sistent funding?

6 Patreon. Enter Patreon. Created by YouTuber musician Jack Conte in 2013, on this site either by month or per project, audience members can opt to become “patrons” and pay the creator a certain amount of money. Patreon takes a 5% cut from each pledge, which is the same as sites like Kickstarter, but less than a site like YouTube, which takes 45% (Chaykowski, 2018). Like with Kickstarter and other crowd- funding sites, Patreon allows for creators to set up perks for their patrons. These perks can include access to works in progress through a service called Lens; extra videos, full- cuts of reaction videos, or bloopers; Patreon-exclusive posts, video chats through Crowdcast, and live chats through Dis- cord; their name listed as a producer at the end of a video; and many other things. According to self-reports by patrons, their decision to become a patron is split about 50/50 be- tween wanting to support a creator and receiving the perks (Conte qtd. in Kafka, 2017). And if the creator keeps deliver- ing on the content and the perks, they can be making a siza- ble paycheck each month, possibly tens of thousands of dol- lars.

Conte was one of the YouTubers to not feel like he is reaping the full benefits of monetizing on YouTube. The thing that tipped him over the edge and led directly to creating Patreon was in 2013 when he created a music video (Chaykowski, 2018). In order to make it, he spent three months of time while maxing out two credit cards and draining his saving ac- count, totaling about $10,000. This video included robots and a replica of the cockpit of the Millennium Falcon and was loved by his fans, receiving over one million views in the first year. But in the first month of uploading the video, Conte made $54. To date, he has only made about $1,000 on this video, nowhere near breaking even on the investment to cre- ate the video. This was his “rock bottom moment as a crea- tor,” knowing that he “created something of value but would never be paid for it (Chaykowski, 2018). This had to change, for not just him, but for all the other creators out there who were feeling disheartened. Everything about Patreon is “creator-first” (Conte qtd. in Kafka, 2017).

From the fan side, it is the next step in these creator fan- doms. As Conte says, “there are benefits that you get to be- ing a member, and you also just want to support the arts. It’s both of those things.” Being a patron of the arts is not just reserved for the wealthy or the powerful. Just like with other aspects of creator fandoms, what this is really evolving into is something more personal, something more everyday people can be a part of.

7 Conclusion

Creator fandoms have sprung out of a mix of several factors. There had to be platforms for creators to share their crea- tions and ways for them to make money through what they were doing. By this point in time, the major players have es- tablished themselves: Google’s YouTube and Amazon’s Twitch. After a few key points in time, especially YouTube and their MCNs switching focus to fewer creators around 2013, a landscape was being created. At this same time, crowdfunding had its biggest success with the funding of the Veronica Mars film, and Jack Conte founded Patreon. This landscape set the stage for creative, talented, smart, and personable individuals to make their living doing what they love while their fans were able to support them and really feel like they were close to the creator, unlike with other types of fandoms.

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