Transcript 0:00 [on-hold music] This week's episode of "The Rebooting Show" is brought to you by Beehiiv, the platform trusted by enterprise publishers like Newsweek and Time. 0:16 Newsweek is in the midst of an exciting transformation. With AI disrupting search traffic, they're building direct relationships with their audience through newsletters. 0:24 Bharat Krish, Newsweek's Chief Product Officer, spoke about why they chose Beehiiv, and he said that Beehiiv's consumer-first, tech-driven DNA was exactly what they were looking for. 0:35 That B2C background ended up growing their tool into being enterprise-ready. Newsweek has aggressive newsletter plans designed around adding new audiences and launching new products. 0:47 With more industry leaders like Newsweek migrating to Beehiiv and Twenty Twenty-Six planning in full effect, now is the time to see how Beehiiv can take your content to the next level. 0:59 If you wanna see what your next stage of growth could look like, go to beehiiv.com/trb. That is spelled B-E-E-H-I-I-V.com/trb, and meet with Beehiiv's team of growth and newsletter experts today. 1:16 Thank you so much to Beehiiv for their support. Welcome to "The Rebooting Show." I am Brian Morrissey. I am joined this week by Darren Cross. Darren is a longtime digital entertainment executive. 1:26 He is the author of "Nobody Planned This: How Platforms Rewired Entertainment," Darren ran strategy at Maker Studios. If you don't remember Maker, Maker was, was one of the, one of the original really MCNs. 1:40 It was the biggest. Yeah. Yeah. 1:43 Like, you know, and, and the MCN was a, it was an interesting period of time, and I think I wanna spin this forward into what's going on in the creator economy, because I know, Darren, you have an interesting viewpoint on that. 1:55 So welcome, glad you took the time. Oh, I'm happy to be here. Thanks for having me. All right, so w- walk us through a little bit, like, I mean, so you ran strategy at, at Maker. 2:06 I think at the time it had, like, 80,000 creators on the network. Now, the creator economy at the time, I don't even think it was called the creator economy. Was it? No. 2:15 That is actually a phrase that's evolved since, right? It kind of... And, and I don't mean this negatively, but it kind of elevates the profession a bit, right? Creator has a very, very nice tone to it, right? 2:25 Biblical even. But y-yeah, it wasn't as big. And, and in certain ways that was a virtue. In, in what ways? It allowed more native niche content. It allowed more personality. 2:37 It's back when the label authentic really meant more authentic. It really was more personality driven. It really was exploring more less mainstream themes than current creator economy does. 2:51 Less replication, less copying than you see now in the, in the- Yeah... influencer creator space. It was, it was less optimized, I think. Right? It's like- Like, I mean, like- I mean, I think of it like music, right? 3:01 I think of it, like, before Chuck Berry, there wasn't a Chuck Berry, so Chuck Berry got to be Chuck Berry, right? And before punk rock and before rap, a lot of these musics, 3:11 they had to find an access where they could compete because they didn't have all the things that the previous access had, like resources and super skilled players and all that. 3:20 You, you get in a different weapons race, where it's more about ideas and difference and cultural relevance. Yeah. And this is as... I mean, really, YouTube. Let's, like, z-zero in on YouTube, right? Yeah. 3:30 Like, so, you know, YouTube now is, it's like TV. It's, it's now, like, a meme to, to say, "YouTube is now TV." Yeah. But at the time, you know, YouTube was, was much smaller. 3:40 I remember, you know, as a reporter writing about YouTube in its, in its earliest days, and it was- Mm-hmm... like a thrilling thing, and there was these, there were these people who were developing, 3:52 they were messing around on, on YouTube. This... And it, it did have a feel. It was kind of exciting. There was Rhett and Link and there was, you know, iJustine- Smosh... and I remember- There was a bunch. Yeah... Smosh. 4:03 I did- Mm-hmm. I would do, like, roundups, like, the YouTubers you need to know, like, for, for brands and marketers, and it would be- Yes. Yes... you know, Michelle F- what is it? 4:12 Michelle Phan, the, the makeup, the early, like- Yes. Absolutely... certain makeup person. Ipsy. Yeah. Yeah. I don't know. [chuckles] S- so, you know, there was like... It was a different... 4:21 It was, it was definitely a different, different era, and I feel like just as, as the platforms got bigger- Mm-hmm... you know, this, this field changed a lot. 4:32 So what do you, what is, what, what is the current state of the sort of creator economy at- Oh... centered on YouTube? Well, I mean, that's a big question. 4:42 So in the old system, traditional media, the locus of power stood, was with the studios, right? Mm-hmm. Because they had a... Scarcity always drives things. Scarcity determines power in my mind. 4:54 So the studios had scarcity, so they were the funds, they were the source of talent, they were the facilities. 5:00 So they really, with that, they earned the role of gatekeeper, and they also became the, the entity who placed the bets on what would be, would hit in, in mainstream culture, right? 5:11 And that was a very useful model right up through "MASH", I think, right? 5:15 But beyond that, cable started to dif- to fray that a bit, but the creator economy frays it more where the locus of power really comes to the, it's not really purely distribution, but it's like distribution. 5:26 It's the platforms. Right. So the platforms have a different idea. They're not gating for letting only a few select people in and placing big bets on them. 5:33 They're letting everybody in, placing no bets on them, and then optimizing iteratively. Right. So- Yeah. And, and that changes- They don't care who wins... things completely. You know? And that's why- Yeah... 5:42 they, they, the, the platforms love creators. They, they do to a degree. I mean, they love the notion of creators because who wants to negotiate with a couple of people when you've got, like, millions? 5:54 Like, nobody has leverage. Bingo. Bingo, right? To a, to a certain degree, watch time is watch time. 5:59 Now, we can debate what quality entertainment gets what premium for adver- inventory, but basically, they'd rather not negotiate with millions of creators and f- and have the outliers show up regularly like they do, as opposed to negotiating with a hundred MrBeasts across t- twenty-five dis- different genres, right? 6:16 Because they don't needTo be having competitors bid for their time, for their attention, for exclusivity. They, they like the disproportionate bargaining power implicitly And the way the sort of creator kind... 6:28 I mean, there's obviously millions of creators, right? Oh, yeah. But it's developed into, like, being a power wall, law, like, to a large extent, right? Oh, yeah. And it is a wall, right? I mean, so 6:38 it used to be talent and, and being early or being brave was a differentiator ten years ago or so, and it still is to a certain degree, but now there's more brute force, right? 6:49 So when somebody like MrBeast reaches his scale, he has a lot- Yeah... of more momentum behind him. He has investors, he has a team, he has, he has ability to make... 7:00 I'm not saying he's making subpar content, but he can make a lot of content that doesn't have to be a hit because it's gonna be a hit because it's gonna be in storefronts around the world, and somebody's gonna walk by and gawk at it long enough to drive an ad impression. 7:12 Right. And then once you have that distribution, you know, you can, you can make a lot of, you can make a lot of mistakes, basically. You can go a lot of different directions, you have optionality. 7:22 And MrBeast is building an entertainment company. Like, I'm not sure- Yeah... like, it's a different type of entertainment company because it, it has a, quote-unquote, "creator" at, at, at the, at the front of it. 7:35 Mm-hmm. Mm-hmm But at the end of the day, it starts to look a lot like a regular entertainment company, right? Yeah, it is. Like, it's a bit of cosplay, right? It's, it- he's a creator, 7:46 but, but he's ki- he was a creator. He's still a creator, but he's really an organization now. MrBeast is an organization, a- and MrBeast is a brand, right? 7:54 So he, he's not coming at it in the old-fashioned way where established artist star would then create something, like their own, you know, Desilu, right? 8:04 He's coming from the other way, where he came up from nothing, reverse engineering how YouTube rewarded creators doing things like, you know, counting to a hundred, and underwater, and, you know, all the things he did early on were just very, very simple, but they were riveting in their own way, and he's built from that. 8:22 So he's come from a creator background to a place that's really... He does television better than television in many ways now. Well, he did a, he did the Super Bowl ad for Salesforce. Yeah. 8:32 I'm not saying it was one of the best ads I've ever seen, but I don't think I'm, like, in the, the, the Jimmy Donaldson- Well, yeah. [chuckles]... audience target. So- Yeah... 8:41 I don't know, but then again, I'm not sure Salesforce, I have no idea why it made sense for Salesforce to have MrBeast, who is, like, I guess his core constituency is children. I don't know. 8:50 Maybe children are using B2B software. I don't know. You know, and, and- Everyone needs, everyone needs a CRM... yeah. I mean, could be, right? I mean, I don't know. 8:59 I mean, I, I think it's not as bad as it was when I was at Maker, but there's still a little bit of my son knows this creator, they're big. Yeah. 9:08 Okay In, in the, in the, in the suite that, that makes these big money decisions for advertising, right? Yeah. They're not natives. They're visitors to this land. Right. 9:17 But, like, it seems like the, the, th- the middle class did not develop and won't necessarily develop. Is that fair? That's my thesis, right? 9:27 I mean, in the same way that there's no real middle class in traditional entertainment, right? It's just not necessary for the most part, especially in front of the camera, right? 9:36 So what YouTube wants and needs is they need a few bright and shiny tentpoles, that's MrBeast. 9:43 Then they need an endless flow of content, which up till now has been provided for free, mostly, by millions of creators around the world. And they just wait and see what pops, and then pushes it. 9:54 So they really become an optimization engine around routing, right? That's their play. And that works, but ultimately, they don't, they, they don't not care there's a bunch of stars. 10:06 I mean, they kind of, in a perfect world, they kinda like fungibility, and at a certain level, it does become a little bit of a price differentiator as a human. 10:15 So they are kind of heading towards Spotify, which has a lot of AI-driven stuff that pays no one. Mm-hmm. Right? 10:21 But until then, they don't really need to 'cause there's so many creators creating quality content for free. So there, I mean, ultimat- ultimately it is a differentiator, but at, we're not to that point yet for video. 10:32 Yeah. I was just talking about this AI-generated account out of, out of India that has billions of views. Yeah. And, you know, the cost of, like, 60 bucks to c- produce these videos. 10:44 It's like an AI monkey that's in various situations. Yeah. Uh-huh. Great business. Well, that's the irony, right? That's the irony- Yeah... because India, 10:52 up until very recently, was the low-cost production locus for people. Yeah. 10:57 Which w- you know, I mean, going, I mean, I go back 20 years, I was at ClickStar, which is an Intel-funded venture with Morgan Freeman, and when... 11:04 This is when encoding was, like, a black art, and it was done literally in Burbank, and you paid a lot to get video content encoded. Yeah. 11:12 But very shortly, it became something that was, that was price competitive, done for pennies in a place far, far away, and now you don't even need it, move it to a place far, far away. 11:22 It's just a machine that does it, so it's, there's really no human advantage by putting it in India anymore, really. It's just a- Yeah. I mean, this account is-... next level network content... is, is Bandar Apna Dost. 11:34 It has 3.13 million subscribers. All AI created. I've probably seen, we've probably all seen some. So is that, like, sort of where these platforms will end up going? 11:45 I, 'cause I think the, the, the question I have as- Hmm. Mm-hmm... inevitably 99% of content is gonna be synthetic, and the weight, 11:55 usually the, you know, trying to separate what's human from, from what is AI, first of all, it's like, is that spam? Not necessarily. People obviously really like this AI monkey- Mm-hmm... w- from Bandar Apna Dost. 12:11 And, you know, so I don't think necessarily the platforms are going to just say, "AI content bad, human content good." 12:18 You, you see, you know, like-On Spotify, like, yeah, I don't know, to, to go to sleep, there's lots of different, like, there's lots of different things you can do with AI. Like I don't- Yeah... 12:27 I don't necessarily think human y- I think it should just probably be on the quality of the content as judged by the audience. 12:36 But is that the sort of direction that y- you see these platforms, and particularly YouTube, going? And then how are they gonna deal with the inevitable flood of limitless AI content? Or does it not matter? Yes. 12:49 Well, y- I, I, yes, but let me qualify a little bit. First of all, I don't think ninety-nine percent is probably the number. It's gonna be a lot, but I don't know what the number is, but so 12:59 right now, we've got a very rich competitive floor for content creation that's all human, for the most part, on video, right? 13:05 It's been very effective at keeping the, the incremental cost of a new video pretty much at zero. But eventually, AI will set the new floor for cost, right? 13:14 And it's also very quick to pick up trends and emulate, which YouTube, as it's matured, has become more of, where it's an emulation factory, right? So a, um, a format hits, and all of a sudden everybody's doing it. 13:25 So YouTube is already moving that way because they've seen the success of TikTok and Instagram at, at making creators' personality in less important. They don't have followings as much, right? 13:39 The, the, the fungibility of creators is more prominent on those platforms, and it certainly is more prominent on YouTube with YouTube Shorts. So they have no... 13:49 If they're not longing for it, they at least have no aversion to it, right? So going forward, there'll be more of that, and you start to weave AI-generated content into the mix, much the way you see on Spotify. 14:00 And if you're just somebody who wants something easy listening that sounds like Kenny G, you can get two hours of it, and maybe some of it is Kenny G, some of it's people, some of it's just AI riffing on smooth jazz, right? 14:12 Who knows? But so that is a future. B- but at the same time, I mean, I see this in my son and other kids. I had this conversation with a colleague the other day. My son has a visceral reaction to AI. 14:23 We went and s- we went to see Avatar. I kind of pushed to see it. And it was really kind of funny, 'cause I, after, it's a long film, right? 14:30 And you're sitting in the theater, after a while, the scenes that are filmed, like in the lab, where it's really people and less AI-generated stuff, feel jarring. Like, like they're two different worlds, really. 14:40 You know what I mean? Doesn't feel the same. And I felt discomfort. And my son started talking about it afterwards, how much AI was there and how much is it AI. 14:47 And, "Well, it's AI, it's machines," and we went through this discussion. But he has an AI, a visceral AI reaction where he connotes some AI c- a lot of AI, AI content, similar to the way he jibes at Facebook content. 15:00 It's for the olds, right? It's for- What? AI content is for old people? A lot of it, 'cause he thinks it's... 15:05 He, he pejor- pejoratively talks about AI content as the stuff that old people mistakenly share because they think it's real. Oh, well, that's reassuring then. Yeah. And it, it is nice, right? And I have a... 15:14 And I was saying this to another friend, a former colleague at Maker, and he talked about his nineteen-year-old son, and he said, "Yeah, it's really funny, 'cause just last week, my son, who's been a longtime Orange Fanta drinker, came to me and said, 'Dad, from now on, buy Orange Crush.'" 15:27 And he's like, "Why?" He goes, "That Coca-Cola AI commercial." Oh, yeah. And that's a pretty strong reaction, right? 15:33 And I, I, in my mind, I line that up with the resurgence of the adoption and interest in formal r- formalized religion in younger generations in the United States the last four or five years. 15:44 There's, there's a need to belong, inclusiveness, especially younger people, where content is identity, right? There's a lot of things tied up in that. So I think those pockets remain. 15:53 That's why I think niches and genres will still matter, and that's where AI is weakest. Then ironically, I also think for traditional media, there's a lot of rights. There's a lot of stuff that people riff off of, right? 16:06 So those things in a, in a weird way, will become even more valuable because you're gonna want to secure those rights to not get sued for the things you're riffing on with AI. 16:14 So what does YouTube look like then in, like, three years? Is it that different or is it, you know, fairly similar dynamics? I think my gut is it feels a lot like now. 16:24 It's just you have less certainty about, certainty about how something's made and by who. Right. Right. Was that really a creator or was it a company? Was it a company using a real person or was it AI? 16:37 I mean, there's a, there's a bunch of different breadcrumbs along the way to figure out what you're actually consuming. I mean, I assume that they will label it, right? 16:43 Like, I mean, if, if, if, like y- I think- If they have to... YouTube, you, well, YouTube- If they have to... s- yeah. I mean- Right... I think have to. Have to is interesting. 16:51 Like, I mean, because the, the, it, it's either they have to because of the market or they have to because of, of the, the government or regulations of some kind, right? Like, and- I think it'll be both. Yeah. 17:02 I think I can see pressure. And, and they've been down this road before. Mm-hmm. Right? 17:07 Like n- they didn't, they would not have an advertising business if did they not figure out how to find copyrighted music and if they weren't able to find nipples. 17:17 Like, I mean, nothing concentrates the mind, and they were able to do that. That's why anytime these companies say, "Oh, it would be impossible for us," I'm like, "Well, gee, when you had like, you know- Yeah. Yeah... 17:27 billions on the line, you were able to figure out, you know, the, the nipple technology. So don't tell me you can't figure this out- Yeah... 'cause of enough money." You know, I talked about this in... 17:36 Yeah, I talked about this in my book. Where they're like, with AI, it's like, we can't figure out where the content came from. I'm like, "Trust me." Yeah. "You, you can figure this out." 17:44 There's a structural schizophrenia with the platforms. It's a split personality that's, it's k- kind of intentional. 17:50 'Cause they will, if you're an advertiser, they will tell you in great granularity and great confidence how they know your audience and how they can target your audience and how valuable that audience is. 18:00 So they have great, great knowledge on behavior and activity and all this kind of exhaust trail that every user leaves when they watch. 18:06 But if you go back to them and say, like, "You know, how many of those audience members do you think are 12 or nine?" And they're like, "We have no way of knowing. How could we possibly know?" Yeah. 18:15 [chuckles] And, and that's not true, but, but they're not gonna stand in front of that on imprints, even if they could, because it's a lot of liability on imprints. 18:23 But also, it kind of craters their business, and that's going back to your question about where Y- YouTube looks like in three years.YouTube has, uh, morphed quite a bit over ten years. 18:31 When I said it was freer and more adventurous, more experimental ten years ago, that's partly because of the audience. The audience was young, and they were along for that ride. 18:39 Now, the audience now, on average, is much older when you aggregate them all, and they're- Mm... watching on a oftentimes a communal device and not a individual device. So those two dynamics 18:51 make it very different kind of content that's coming out of it. 18:54 And then when you raise the stakes that all the money's being put into this by brands and private equity and everybody else, all the decisions matter way more than they did when PewDiePie was posting his first one hundred videos. 19:05 Yeah. And so what determines now, like, what- whether something takes off on, on YouTube? Is it, is it almost, like, too late to establish? 'Cause we always see people come too late to, like, every party, right? 19:17 And like- Yeah... there was so many advantages to having built a, an audience and having that distribution early on w- and- Mm-hmm... with YouTube. 19:26 Is it still, and I still see people, like, there's like, "Oh, now we're g- now we're, we're going big into our YouTube strategy." 19:32 Is it still practical to be able to build, to be able to build, like, a, a really strong YouTube channel starting now? 19:39 What I, you know, for a big, big company that wants to, and to develop IP and produce content tr- in a traditional way, I think that's a real tough bite to take, right? 19:50 But, I mean, the other side of this coin is at, it's always been this way to get into music, to get into sports. 19:56 There's a certain part of society that's young and ambitious and without resources that takes a, takes a swing, right? And you... And the luxury here is you get millions of swings. So somebody's voice is gonna stand out. 20:09 So it's really an incredible experimentation layer at the bottom of the creator economy- Mm... as it is with any medium. Like with punk m- punk rock or rap music, there was, it was not being driven by labels. 20:19 It was not being driven by the audience even. It was somebody had a voice, couldn't see their way through the current system and had to find an audience a different way. And- Yeah... 20:31 that's a lot of what YouTube is, and someone will. I don't know who, I don't know how, but something will at all times. But, and when you talk about punk rock, like, I mean, it- Mm-hmm... 20:38 that runs, that runs completely counter to YouTube being so mass and being where old people are. Like, wouldn't... I mean, we're seeing new kinds of, I don't even know- Well-... if these are creators or influencers. 20:50 Yeah. I, I have to bring up, like- Mm-hmm... the clavicular guy. Like, I wish I didn't know clavic-clavicular, but, like, I do know clavicular. Yes. But, like, no, but streaming, like, has become- Mm-hmm... 21:00 Kai Cenat and the, like, streaming, like, it's slightly different. Like, I, I think, uh, I don't know, m- I think about it as, as slightly different than YouTube. Yeah. Yeah, yeah. Well, I mean, if I s- if I... 21:10 For me, I, maybe I'm, and maybe this is peculiar to me, but I abstract back. So I, when I think about- Yeah... the music business, I think about selling records. Mm-hmm. 21:18 And they're selling records to all kinds of people. 21:20 So if you're an up-and-coming 18-year-old who has some musical talent, maybe you don't have access to formalized musical education, but you've got taste and you've got s-some, some native talent. 21:29 So you don't have the hours or the resources to learn how to play the guitar at the level of Jeff Beck. But you know what? If you could sample and you can narrate and you can find a new medium to express yourself, 21:42 you don't need those skills. You need a different set of skills. So you change the access on what competition and what good means, right? And that's what YouTube did originally. 21:49 They, they changed the access of what, what quality was. It was no longer production quality and writing and lighting and everything else. 21:57 It was a metric that was more kind of hard to put your finger on of, of, of authenticity, which when that, when that word really still meant something in the creator space. And so that is, like, fading, right? 22:08 Like, is, is the authenticity- Mm... bit fade, and as you start to... To me, the, like, the, the the middle is always me, right? Like, I mean- Yeah... 22:16 we, we saw during the pandemic, like, you know, production quality go down on, like, broadcasts. They were, like, just doing Zooms. And I was like- Yeah... "Oh, we can do video now if you're, if it's Zoom." Yeah. 22:27 But then, you know, you look at what a lot of, a lot of YouTubers are putting a lot of money into production. I mean, like, it's not like they're the selfie stick people anymore. No. I mean, it can be. No. 22:41 Depends on the content. Yeah. But, like- Mm-hmm... that, that doesn't seem like, uh, uh, like much of a differentiator. Agreed. Here's what I would say about that. 22:48 So yes, for those people that are do- at that level now, they are very much television, right? 22:53 And you'll see that they're distributing their content to numerous places, Netflix and Amazon, and, you know, they have a, they're, they're basically television. 23:01 I mean, that was, that, MrBeast is, has transcended YouTube. But there are still tons of YouTubers, and what will come next, new formats, new genres, new expression will not come from people emulating MrBeast, right? 23:16 Yeah. 23:17 It's much bigger, so it's harder to find this needle in the haystack, but the beauty of is it, it is, is it will show up as it starts to get trends, and those trends are different than they were 10 years ago because inter- YouTube is so much more international than it was 10 years ago. 23:28 Mm-hmm. But I mean, maybe I'm naive, but I believe they will surface, and that is one of the virtues of YouTube is this vast R&D, this vast experimental layer, that it's low cost, low friction to get it up. 23:41 And then if it somehow catches fire in the algorithm, then that becomes, once it becomes a hit, then everybody does it, right? I mean, and that's a, well, it's both a blessing and a curse for the space. 23:52 But if a trend takes off, I mean, what, what MrBeast does now or what he did five years ago wasn't what YouTubers did five years before that. Right. 24:01 So there will be an evolution, and something will work, something will change, and it could be a very small tweak. I mean, honestly, some of the stuff that MrBeast did early on was kinda cringey for me. 24:11 Some of his stuff was like, you know, like, like the, the Ed McMahon giveaway type stuff, you know what I mean? Yeah. Like, oh, you know? Well, I find MrBeast a very difficult character. 24:19 Maybe it's my, me as, like, a middle-aged guy, but, like- Yeah... I don't find it really, like, an inspiring story. 24:25 Like, I don't, like, I mean, he's, like, it's, it's all this optimization and all of these, like, these weird stunts, and the- Mm-hmm... 24:32 the stunts have to get bigger, and I'm not sure what exactly-The value is of any of this stuff, and now I'm really sound- sounding old. I, I, personally, it doesn't, like, appeal to me. Yeah. 24:43 I'm, like, shocked that, like Uh-huh... that this person is that, that successful. And I think it's just the... You know, I think it was when I saw, like, what he does with the thumbnails. Yeah. 24:52 And I think one of my struggles with YouTube is how over-optimized it is. Mm-hmm. And I think about what people are doing with open, with OpenClaw and all this agentic AI, and I'm like- Yeah... 25:06 oh yeah, MrBeast was, like, testing, like, a thousand thumbnail variations. Everyone's gonna be testing 10,000. 25:13 The agents are gonna be doing that overnight, and they're gonna be auto-optimizing, and it, it just, it feels like it's going... And MrBeast has always had a little bit of dystopian vibes to me. 25:24 [laughs] I could be wrong. Yeah. Yeah. There's a, I mean, I mean- Some- something I can't put my finger on there, but, like, you know, his success feels overly engineered. Well said. So here's what I would... 25:37 I'll be honest. He's not for me, right? Okay. He's not my kind of stuff. But, you know- This is not a MrBeast fan club... that said, 99% of cable television wasn't for me, right? That's true. 25:46 So I mean, I have never seen Real Housewives of anything. I don't know... I can't even name all the cities that C- C-CSI belongs to, right? I, I don't know, don't care. It's not me. 25:55 Yeah, and, and MrBeast does have this weird Stepford wife kind of vacancy in his eyes when he's on screen, for me at least. It does seem super manufactured. 26:04 I wouldn't be surprised at all if he was actually just AI generated. 26:08 He talked about going to these- That's my- Like, he's like, "I don't like to go, like, expensive, you know, have expensive meals," like a $20,000 golden pizza. Yeah. I'm like, do you think that that's, like, [laughs] 26:18 like a really good restaurant? You know what I- Of some viral food? I don't... Yeah. Yeah, you know, that's all he's... Remember who he's speak- remember who he's speaking to. 26:25 I like, I was like, I didn't think he's, like, failing my CAPTCHA test, to put that forward. Well, you know, he, yeah, mentioning the French Laundry is not gonna resonate with nine-year-olds, so you gotta- That's true. 26:32 You gotta speak to your audience, right? That's true. Okay, that's fair. Especially if they live in Bangalore, right? So you gotta keep the references. He's like a, he's, he's similar to- That's true... 26:41 big action movies for Hollywood, right? Keep the plot simple, keep the dialogue simple, and make it lots of, you know, pyrotechnics, and that thing will go well around the world, right? 26:51 But we're not gonna have- He's the great-... like, an array of MrBeasts. You're gonna... I mean, 26:56 I think you're gonna have always that layer because it used to be when you were able to afford a team like MrBeast did, first he got discipline, and he took it l- really serious like a business, which differentiated him from a lot of creators. 27:08 But Markiplier and PewDiePie and a lot of others did that too. But then he started to build a real team, like a business. 27:14 And he, and what I, what I do admire about him is he spends, like, every dollar making the next thing, you know what I mean? He's not buying a yacht for himself. He's about, like, I wanna up it. I wanna up it. 27:24 So what I admire is his ambition, right? And I may not like what he makes, but I do respect the game, right? 27:31 So there'll be more of that because now with AI and all this, this is kind of going back to my argument about different genres of music because it used to be really hard to make an album if you were, like, in the 1960s. 27:42 You had to get resources, or '70s, even '80s. You had to get resources behind you. 27:45 You had to convince somebody to bet on you so you could have access to a real studio, and then you could get the distribution channels and the marketing money and blah, blah, blah, blah, blah. 27:54 You don't, don't need that anymore. You can make music in your bedroom with really high-end tools and become as big a hit as any of that. And that is coming, is already coming. 28:04 It's already here with video to a certain degree, but it's coming even more with AI. So what it does is it raises the bar for what the middle tier is, what the middle class has to do. 28:12 So if an old middle, [chuckles] I say old, a prior middle-class YouTuber, the few that there are, was gonna say, "Well, you know, now I'm gonna level up by getting myself a team for production, for back office, for marketing," da, da, da, da, da. 28:22 Now, a lot of that can be done with tools that are cheap. AI, like all those thumbnails you just discussed. So what's the next level that require people that's expensive? 28:34 And that's where that layer of MrBeast-type creators can afford, and they keep elevating themselves above the rest. 28:40 And that's why the, there's a n- the, an ever-growing yawning gap between the very top and the huge bottom. It's not a pyramid. It's a spire. 28:48 It looks a lot like traditional entertainment back when Tom Cruise at its, was at the height of his powers. Right. You mentioned, like, PewDiePie. Yeah. Is he, like, in, like, semi-retirement in Japan now? 28:59 Do I have that right? [chuckles] I believe that's the case. I mean, he had some- This is like a young man's game. Like, I mean, he's like, he's like a retired YouTuber. 29:07 Well, I mean, part of the problem with, especially with PewDiePie, because, and, and earlier YouTubers, a lot of it indexed more towards personality, right? Yeah. And influencers have this problem a lot too. 29:19 So 'cause, 'cause you can't- He's got a big controversy section, that's for sure. Yeah, he does. Wikipedia. We made some mistakes. We made some big mistakes. 29:26 If you're an early YouTuber, your controversy section's gonna be big. 29:29 [laughs] 'Cause you, you know, and, and let's be honest, these guys aren't trained professionally the way professional, traditional media people are with coaches and PR people that help them avoid landmines. 29:39 They're on their own, so they make mistakes, and he's a young guy, and I'm, I'm not here to defend him. He's done some weird stuff. 29:44 But when you're that leveraged to personality, it's hard to keep reinventing yourself, right? When a big part of your attraction is that you are novel, you are new, and you are different, and then the next... 29:54 And generations now are not as long as they used to be. I don't care what, what traditional- Yeah... or tr- [laughs] you know, studies say. 30:01 To, for me now, a generation is, like, five or six years because everything seems to flip within half a, half a decade. 30:08 Yeah, it just seems like, I mean, like, for those that can, like, get to MrBeast's level, and obviously there's very few of them, they can hire teams and whatnot, like, keeping up the pace as, like, a creator... 30:20 And now, you know, I remember I would always, like, roll my eyes at, like, creator burnout, but then I'm like, that's, like, real. Like, to be able to- It is real... 30:26 always be on like that is, it's different than, than the, the analog entertainment world- Mm-hmm... I feel like. And having that kind of staying power when things come and go is difficult for creators.Y-yeah. 30:43 Even the feedback cycle is j-super... It wears on people. It's super hard to, to carry that burden. Used to be in the old, old media, you release a movie on Friday, and you find out numbers on Monday, right? 30:55 So production logic was you p-place bets, put a lot of effort into it, and it would hit the market, and the market would tell you the truth, right? And but you... It took time. 31:03 But for platform logic, you're constantly iterating, creating, evolving in front of the public, and you're doing that with constant feedback. 31:11 And it used to be on YouTube 10 years ago, you had a dashboard, and you watched it maybe daily, right? 31:17 But with TikTok, Instagram, and YouTube Shorts, and all these platforms, they've amped up all that granular data analysis into a, a very fast loop, so it's almost instantaneously. So you're constantly... 31:29 It's like you're getting your box office every few minutes. Mm-hmm. And that's... And psychically, that's a huge toll. Yeah, for sure. And, and do you see any other platforms emerging 31:40 to even compete with, with YouTube, like, for the power as, as, like, creators? Like, it, it seems like, you know, YouTube is... has, has grown so massive as, like, an ecosystem- Mm-hmm... 31:52 that it's ach-ach-achieved some kind of, like, escape veloc-velocity. Yeah, you know, I'm not really good at predicting the future. I'm, I'm kind of good at kind of reading where things are going. 32:02 There will be another platform. I don't know what it is. No, I mean, like, right now, do you see, like, anything? Like, I mean, if you're- Mm-hmm... do you see creators no longer just using YouTube as a default? 32:14 And that's why I asked about, like, other, like, streaming platforms, like live streaming platforms. You mean outside of TikTok and Instagram? Well, yeah. I mean, like, I mean, like, for the type of YouTube content. 32:27 Like, it seems like- Oh... like YouTube has- Yeah... I don't wanna say monopolized the market, but it doesn't have a lot of competition. Like, all roads lead to YouTube. Right now, that's true, right? 32:36 So what it used to be called 10 years ago or so, they used to call what YouTube produced, these eight and 10-minute things, they called it short-form. Well, now that's not short-form. 32:44 That's long-form in many ways, right? Short-form is the one to two-minute things, and TikTok dominates that. My son's 13, as I mentioned before, and his main go-to is TikTok. 32:54 And to be honest, it's not so much for the content, it's for... I, I don't wanna use the community so much. Uh, it's, it's the comments. 33:01 So if I'm driving him to school, I'll hear the same loop of music from the same video for 10 minutes because he is rabbit holing down that comment thread. Oh, okay. He's reading it. He's commenting on it. 33:13 So, and he does that all the time, and he's not, he's not alone. His friends do as well. So TikTok is super powerful for the audience, and I think in many ways, YouTube has had to, had to counter that with shorts. 33:25 And part of that is mercenary on their part because that accelerates the fungibility trend that they'd like to encourage anyway, but part of it was ext-extential because they're competing against Instagram and TikTok, who've really elevated short-form content to an art where it's very monetizable for them. 33:41 It doesn't really monetize as well for the creators involved, but it does really monetize well for Meta and, and TikTok's owners. So YouTube is in that game, but it... what comes next, I, I, I don't know. 33:54 I have this hunch, I have this hope, I have this bet that, that, that more real and more belonging finds its way somewhere. Twitch has a very fervent following of real-time kind of relationship building, right? 34:04 Their audience is very much... They're the closest thing right now that still exists that reminds me of what YouTube was in the early 2010s. 34:13 I, I remember going to my first VidCon in 2000, I think it was '11 or '12, and it was literally like a get-together of friends. And fans would walk up to- Oh, yeah... 34:24 big creators for that day and talk to them like they had just bumped into them at the s-lockers at high school. There was no pedestal. And what was nice is that the creators talked back to them like there was no... 34:34 there was no condescension, either real or, or imagined. It was very organic, and it felt really cool. 34:40 And that lasted until about the mid-2010s, and l- I, I've been to, uh, most of the VidCons, including almost all but one of them since COVID, and that vibe isn't there. 34:52 It was very much not there the one year that TikTok took over. Mm-hmm. It was the main sponsor. But you see, you mentioned, like a re- a counter-reaction, and I think that's, uh, interesting. 35:01 I mean, because again, I- you said something more real, and I think that is what gives me pause of where YouTube has gone is it's become so optimized that it feels fake. 35:13 And I think a lot of things in culture are so optimized to feel fake. Mm-hmm. Like fights feel fake. A lot of the interactions online feel fake, whether they are or not. Yeah. 35:23 You know, the, the, the dramas of like, you know, right-wing podcasters, fake. Yeah. Like, you know, a lot of stuff just feels fake. Yeah. Yeah And I feel like- Formative... there... 35:31 Yes, and there will be some kind of counter-reaction to that. Yeah, I think I'm a big believer in reversion to the means, so I think that in and of itself implies that, but I think there's a hunger for that. 35:44 I mean, while going back to Mash and, and, and Lucy, the reason those things were mass phenomenons, because you only had like three choices, right? 35:52 It's not that people didn't have their own little niche preferences and interests back in 1957 or 1982. Yeah. It's just that they were really hard to get to. I mean- I know... 36:01 being a person who really loved music that wasn't mainstream, it took a lot of work and a lot of experimentation, and half the stuff I bought I didn't like because I couldn't just hear it. You know what I mean? 36:10 I had to go take a risk on it and then get rid of it. So, so this now, at this phase, we have a lot easier low-cost experimentation. Yeah. So I think there's a lot of opportunity. 36:21 I've, uh, I mean, even on the platforms, even within YouTube, what I'm, if not advocating, at least seeing or hoping for, I don't know what I wanna qualify it as, it has roots already, right? 36:32 I mean, like the Sorry Girls is an example I like to talk about, and where they've really definitely consciously chosen to serve their community as opposed to monetizing every opportunity available to them. Yeah. 36:44 It's funny how we... I, it just made me think aboutYou know, online video pre-YouTube. 36:50 Because we, we think of YouTube as, like, forever, but, you know, the world existed before YouTube, and online video existed before YouTube. It was called, like, webisodes and, and- Yes... 37:00 would be on, on, like, AOL and Yahoo! and MSN. Mm-hmm. 37:05 And at the time, because everyone just thinks, uses the mental models of the past and they put it on, on, on fa- really fast-changing new environments, it was always this idea of, like, there needs to be an I Love Lucy moment. 37:21 It's like, what will be the I Love Lucy- Yeah... moment of, of online video? And the idea was e- that it would have to, like, break through and have, like, a major moment- Yeah. Yeah... 37:33 with a h- a, a hit that everyone knew, right? Mm-hmm. And I think the way things have developed has been completely contrary to that, you know? And it's not like- Yeah... MrBeast is, is a massive, massive star. 37:48 I've never seen one, a full video. It's crazy. Yeah. But most, like, I mean, and it's like never before have so many people been so famous that nobody has heard of. Do you know what I mean? [laughs] You know what? 37:57 Like, because we've just become so, it's everything becomes niches. Well, nobody, if you say nobody's heard of, you mean, like, our age group. Uh, yeah. I- that's what I mean. What I mean- But-... 38:06 is like, you know what I mean. Like, you know- Yeah, I do. I do. And I see what you mean... when we have a monoculture- Yeah. Yeah... everyone knew every- th- like, everyone knew- Mm-hmm... 38:12 about MASH, like what you're saying, like, you know? Yes. And now, I remember our mutual friend Jason Krebs got really mad at me for not, for not knowing PewDiePie [laughs] so long ago. 38:23 He was, I was like, "Dude"- Well-... like, what? You got really sensitive about it. He's c- he's claiming that he never gets mad, but- Well-... Jason got mad at me... 38:30 no, fun, fun fact, that 19-year-old I mentioned earlier belongs to Jason. So that's a real life story. So, you know, it's, it's funny, right? 38:37 I mean, it's kind of like when I was a kid, and probably you too as well, you have this version of America and American sports and how they're the biggest because that's all you know. 38:46 Like, football, like, the Super Bowl is the biggest thing ever, and then one day you realize, wait a minute, more people watch the World Cup, right? Soccer. So yes, Lucy was big, and MASH was big in our fishbowl, right? 38:59 But there were a lot of things that were, uh, possibly bigger worldwide. I mean, cricket is huge, and I can't understand why, but that's me, right? 39:09 If I knew cricket, if I grew up with cricket, I would understand implicitly. So MrBeast and a bunch of folks like him are huge. They're huge worldwide. 39:17 They probably have more so- I mean, you see numbers for guys like Cristiano Ronaldo, and they have these vanity numbers for subscribers and all that on YouTube, but they get no views. Right. Right? 39:26 So they're, they really don't have social media power the way that MrBeast does. I mean, if MrBeast wants to push something, he can push something. Now, he doesn't have the gear ratio of more au- more 39:36 niche pr- creators, and I'll give you an example, so going back to PewDiePie. PewDiePie, I think at the time when I was at Maker, he, he had a then unheard of number of subscribers of, like, 45 million-ish. Mm-hmm. 39:46 Right? And we had another early OG creator named Shay Carl, who was actually one of the- Yeah... 39:52 people behind Maker Studios when it was developed, and he had, like, maybe 1/10 of that, maybe 1/8 of that audience-wise, right? 39:59 But if you ask both of them to say, "Hey, we're gonna sell widget A or T-shirt B, get your audience to buy," not just in percentage, but in raw volume, number of SKUs sold, Shay Carl, right? Over and over again. Yeah. 40:14 Because his audience cared. His audience came for him. Whereas most of PewDiePie's audience, they find him in their feed, and they kind of subscribe- Right... just kind of reactively, and it's not really, 40:26 it's not, it's like that band you loved as a kid and you always loved them forever, and you're really passionate, and you wear their T-shirt as an adult i- unironically versus bands you can't even recall from the same year. 40:37 Yeah. But are still- Yeah... when they come to town, somebody's gonna go see them, right? Right. They're good at getting attention, right? Yeah. And, and, but converting, attention is good for ad impressions. 40:47 It's great for YouTube. Yeah. Yeah. But, like, that, 'cause that's their business, right? Mm-hmm. 40:51 But getting people to take actions and, and whatnot, you know, you need a, you need more of a tie, I think, more of a connection to an audience r- versus just being able to get attention. 41:02 Lot, a lot of people can get attention. So in the book, I refer to it as ritual and return, and it's really about habit. It's really about relationship building, right? 41:09 So it's really about how often does this person look you up, right? Yeah. To come see what you've published recently, because YouTube's not gonna do that for you. 41:18 If you've got 40- But that's the thing, the platforms don't want that, right? They want- Yeah. Yeah, if you- They want everyone feeding, feeding content into the, the slot machine and pulling the, pulling the handle. 41:27 Well, if, if you've got a YouTube account and you're following 40 or 50 channels, there's a good chance that you should be getting fresh content every day surfaced to you just from those 40 or 50, but you don't get that. 41:38 No one gets that. Right. 41:39 And if you've over-indexed in a bunch of news channels, and they might be kinda niche leaning one way or the other, I don't take a side on this, you might see the other side popping up in your feed all the time because, let's say Fox News is a big partner, and they drive a lot of views. 41:53 So YouTube, not perniciously, not pushing any agenda other than monetization, they think, "Hey, you're looking for news. Here's some news," right? And you get it. Right. 42:03 And, and, and then after a while, if you do watch that stuff, it starts to pollute your feed like the five-year-old watching cartoons on your Netflix, right? You're just gonna get a bunch of garbage suggested for you. 42:12 Just a self-enforcing cycle. Right. So, like, I, that to me, like, and that's why I like the optimization of thumbnails, like, I'm obsessed with the fact that everyone- Yeah. Right... 42:23 does the same approach to thumbnails. I'm like, it's humiliating. You know, it's, it's so funny though, but- It's honestly, it's humiliating. I know. 42:29 Like, the fact that you can be, like, this massive, like, you're talking about- Mm-hmm... being, like, a massive worldwide star- Yep... 42:36 and you have to literally do surprise guy face i- in every thumbnail because of some algorithmic dynamics, that's not freedom. Like, you are not a free person. [laughs] Yeah. 42:49 You know, I don't, you know, I, I don't, I, yeah, I don't think, and maybe I'm wrong, I don't think of MrBeast as the guy that has a muse.And he's expressing himself. I'd never thought of him that way, right? 42:59 I thought of him as a really smart guy who's gaming the system and really nakedly ambitious in a, in a, in a admirable way to a certain degree. The same way I admire Jeff Bezos, I guess, to a certain degree. I figured. 43:09 I, I wouldn't wanna be him, but I, I get it and, right? But so there's, there is that to it, but look, I mean, remember the '90s? I do. Well, you'd, you'd, you'd get a lot of movie trailers. 43:18 I mean, not all of them, but like [laughs] I know, but you'd, you'd, you'd- Some years are a little fuzzier than others. There'd be so many trailers where it start out, start out with, "In a world..." Right? 43:27 Yeah [laughs] All the time. And there's one guy here in LA that was getting driven around from recording studio to recording studio with a chauffeur. Literally, there's a book about this guy. Oh, really? 43:35 And he had made bank 'cause everybody wanted their movie to have his voiceover because that was like somehow, that was the thumbnail of their day. So it's, it's, it's the same game. And now he's just in... 43:47 And now he, he just does the- I don't think he's alive anymore, but I don't know... Dreamforce. He just does Dreamforce. Yeah. And then [laughs] that's the only gig he's got. You know, but, but you know what I'm saying? 43:56 So like, so and then, then, like, there was a time, like, in the early 2000, like, you have these commercials on radio like, "Monster, monster, monster." Like, like with the reverberation, you know? 44:05 So everybody finds something that works, and they have the, the other 90 people that have no imagination, or they just wanna succeed, they'll do anything. 44:12 They just copy the person who broke the ground, and that's what happened on YouTube, but it happens on YouTube at such scale. You know what I mean? 44:19 Next thing you know, if you like Dude Perfect, you can find 15 other people that kinda do the trick shot stuff, right? If you like MrBeast, you can find people like... 44:27 If you like, if you like PrestonPlayz, you can find people like him. There's dun, dun, dun, dun, dun, dun. There's verticals, there's genres. It happened before in radio. It happened in television. 44:35 It just happens at such more obvious scale on YouTube- Yeah... that it's so much harder to ignore. What kind of risk factors does YouTube have? I mean, it's, it's ubiquitous, right? Mm-hmm. Mm-hmm. 44:47 Like, but, like, does it have any risk of, I mean, simply becoming uncool to young people? I think it's already there, right? It's already, it's already, it's already rubbing up against that risk. 44:56 My son, like, for being- Like Facebook w- Facebook quickly became uncool. It's hard for m- me to remember that far back. [laughs] I stopped thinking about Facebook before the first Trump presidency. 45:06 MySpace became uncool. Before the first Trump presidency. Uh, that, and that's not correlated, but I just... It became a place where I'd see people. 45:13 It's kinda like, it's kinda like LinkedIn now, where I see people that are supposed to be in my connections, but I don't really know them. So I was seeing- LinkedIn's still cool. Oh, okay. Well, there you go. 45:21 [laughs] Um, but maybe. I don't know. I love LinkedIn, but y- so Y- YouTube is already up against that, and that is a natural problem that anything that gets super successful gets. 45:32 So if you were an early fan of any band, whether it's the Ramones or whatever, right? 45:38 And you're early, and especially when you're young and idealistic, and you're part of the group that gets it, and now all of a sudden, all the great unwashed likes it, it's hard to accept that. 45:48 They're either sellouts or whatever. So... 45:51 And YouTube is in that phase now, where they're putting up a lot of content, and it's a very wide audience, so doesn't surprise me that my son finds the comments section to be pointless or sterile- Right... 46:03 which drives him to g- spend his time on TikTok. And short-form is the... Hyper short-form is what he likes to consume. He's a soccer head, but he hasn't watched a 90-minute game all the way through in how long? 46:17 I can't remember when. But he watches all the highlights, and the same for e- and, and all these sports leagues have this problem with the younger generation, right? They're consuming a lot of highlights. 46:26 They're not consuming a lot of full game viewing. Right. That's why the NFL's average age audience member is, like, 56 or 57 now. It's crazy. So it's hard to monetize clips. Yeah. 46:38 That's interesting because, like, I, I wonder, like, how... With the shortened attention spans, like, that would seem to be working against YouTube. Now, I know they have a shorts product, right? Mm-hmm. 46:48 But, like, the essence of YouTube was a longer f- quote, unquote, "longer form." I don't know what the average length of it. 46:56 But, like, you know, so I, I wonder, you know, if the next generation of creators are, are, are gonna be either... It's funny, 'cause, like, things either go super long, like an always-on stream- Mm-hmm... 47:07 or it's unbelievably fast. Yeah, the super longs, like the... My son used to watch a lot of these when he was early into gaming. He would spend a lot of time on YouTube, but he'd watch really long, right, gameplay. 47:21 And that's what, that was his stage, right? And then after that, he got into shorter stuff, and then he started watching more of these game, these gamers for their memes and comedy stuff than their actual gameplay. 47:31 And then he started watching a lot of other video. 47:32 So m- my son's progression's been from watching animals pooping on YouTube Kids when he was, like, little, little, to where he is now, where he's watching, you know, a, you know, 47:42 a lot of TikTok, which is qualitatively at times not too different. 47:46 There's a meme right now where there's a correcting kind of format now, where creators or influencers who feel they were the first to do a certain format or a certain thing will seek out another follow-on creator/influencer who's doing the same thing and then correct them on video. 48:04 And the audience watches it in a weird way, the same way I think, like, his mother might watch, like, not that my wife does, but that generation would watch Housewives of, you know, Atlanta just for the catfights, right? 48:16 You just- Oh, it's like a clap back. You... Yeah, yeah. Kind of. [laughs] You're, you know, or, or you're a NASCAR watcher, and you're just waiting for the crashes, right? 48:23 I mean, it's a weird thing, but I, I see him, I lis- I hear. I, I'm like, I'm, like, constantly auditory monitoring everything he's listening to. Well, it's c- for professional purposes, but also just because he's 13. 48:36 I'm like, "What is that?" [laughs] But- Yeah. There's- So that stuff evolves, and it, you... And no one would go this... There's nobody would say, "Hey, you know what we should do? 48:44 This is a format we should create and bank on it." Nobody would do that, but it, it ar- it arose on these platforms, and now it's bigger, and who knows where it'll go. All right. I'm waiting for MrBeast to do it. 48:55 That's what I want. It'll happen. All right, Darren. Well, thank you so much. Thanks for breaking this all down. My pleasure. Good to see you. [outro music]
