Q&A: Rightster CEO Patrick Walker on MCNs, YouTube’s New Competition and Millennials

Patrick WalkerFew companies have a better insight into what is and isn’t working on the various social video platforms than the multi-channel networks (MCNs), who once focused mainly mainly on managing, funding and monetising YouTube talent. Over the last few years these businesses have evolved into complex businesses, to the point where the term ‘MCN’ has become almost meaningless as a catch-all term. Here Patrick Walker, CEO of Rightster, discusses his company’s proposition, YouTube, and the inter-platform tussles over talent acquisition.

Rightster has made a number of acquisitions over the last couple of years and at this point where it’s hard to categorise the company as simply a multi-channel network (MCN). Can you explain Rightster’s business model?

We refer to ourselves as a multi-platform network. MCNs were really formulated as YouTube was expanding and they’re very important to scalable growth, facilitating channel management, supporting creatives and other rights holders. Then we work with YouTube, creators and brands to maximise their exposure and the return from their engagement with YouTube, but we also spend a large part of our day working with other platforms.

We also work with creators to help them expand them onto other distribution points such as publisher sites, third party players and platforms, and we’re exploring different ways to engage with our creators and brands on Twitter, Facebook, Instagram, looking at Snapchat and others as they emerge. So we see ourselves as a facilitator of a conversation to help maximise distribution and monetisation across as many platforms as makes sense. Sometimes we experiment, sometimes we really know that certain platforms are best suited for certain types of content. The whole idea is putting the right content in the right place, on the right platform at the right time.

We’ve seen a number of social platforms – Facebook, Twitter and Snapchat to name a few – make significant headway in the social video space, which has traditionally been dominated by YouTube. Is YouTube’s dominance under threat in your opinion?

YouTube is celebrating its tenth anniversary this year. It’s become part of the fabric of people’s lives. It’s a place for them to share, consume, create and enjoy content and I think that will continue to be the case. What’s happened recently is a mass explosion of video consumption on Facebook in particular, and they’ve worked hard to make that a core part of the Facebook story.

That’s important but the use case is slightly different in that it’s part of people’s feed as opposed to being a searchable, interrelated global collection of amazing videos from all kinds of people. That said, who knows what Facebook’s plans are going forward but being involved with video and the advertising associated with video you can be sure is part of their plan, as is the plan for Twitter. Snapchat is already is exploring broadcast capabilities, but the language of consumption is different and that’s what’s interesting about these platforms.

They may be introducing video but they way in which it’s introducing it or the use case can be slightly different. What you’re seeing in all these other ones, however, is an unclear commercial model. Facebook and Twitter have yet to develop means of inserting advertising into the video, so just like in YouTube’s history, the audience is growing quickly and then they found ways to monetise it effectively. They’re smart people and they’ll figure it out.

As a purveyor guide to rights holders and creators of content, we advise heavy investment in the YouTube space, heavy investment of time and energy into building audiences and generating revenue. Sometimes it’s just about building audiences, like our recently announced multi-territory, 20-region deal with Twentieth Century Fox. It’s a non-monetised audience-building exercise to maintain and grow relevance and connectivity with the brand in young people’s minds. We also work hard to create a more diversified portfolio so that people aren’t wholly dependent on any particular platform, that they’re taking advantage of all the different places that people gather. It’s important that we offer people a diversified approach to video distribution and monetisation.

We often hear about some of the platforms paying large amounts of money to creators to move on to their respective platforms. Is that a sustainable strategy in your opinion?

That’s a really good question. Vessel has come up a lot in conversation and they’ve just raised another chunk of cash, and they have been offering minimum guarantees to talent to put their content on Vessel first for an exclusive window. I think that could make sense to a creator but they also have to be very careful not to alienate the audience that made them who they are, and many times that audience came from YouTube. It was that original audience that propelled them into the public discourse and so expecting people to go and pay on another platform is potentially a risky strategy.

I’m all for people experimenting and trying different things, but sometimes a big cheque and a higher revenue share with no audience can be a very risky way to go. We’ve seen this with some talent who have jumped from YouTube elsewhere. They’ve cut off their YouTube audience and they’ve pretty much disappeared from public consciousness. You have to be cautious and find an elegant blend. You should definitely think carefully about things like, what’s your Snapchat strategy? How are you interrelating your video on YouTube with your Twitter strategy? What’s your plan for embedding or using the Facebook player? I think interrelating them is more important than choosing between one or the other. If there’s one that makes you choose only them, think twice.

Are brands getting the best out of online video or is there still a long way to go?

I think some of them are. We’re working with a number of them like Turkish Airlines and Microsoft and we work with the major studios NBC Universal, Twentieth Century Fox, as brands and content creators to experiment with new platforms, and it’s great to do that. Native advertising is a new area and a whole new language. Instead of waiting for things to be perfect, going out there and testing and experimenting is critical right now. That learning is, in itself, currency. Learning is gold if you get it right, The combination of data and insights with creative output is how people should be thinking.

But if you think about where the money is mostly spent, TV, there is a massive gap between actual consumption habits and where the money is spent, which is why you’re seeing online video as the fastest growing advertising category of anything but still TV is the dominant place to spend. But the consumption habits, mobile habits, people shifting onto digital first consumption platforms like Netflix and so forth, these stats are very clearly demonstrating an enormous transfer of consumer attention that is not yet reflected in the ad revenue that’s moving onto these platforms as well. So i think many of them are getting it right in terms of experimentation, but in terms of really, truly committing to developing new forms of storytelling and new forms of advertising that’s suitable for the platform, that’s still to come.

Can you provide an example of how an advertiser would typically work with a company like yours?

Turkish Airlines wanted to promote its destinations around the world with the “Widen Your World” campaign. They really wanted to connect with young audiences in different countries and record their thoughts in their own style and their own voice. We proposed a campaign, it was ten of the top YouTubers around the world, five are with Rightster, five are from other MCNs, each of them made three videos documenting their journey through what we called “Holiday Roulette”.

We sent them to Istanbul, made a video there and then they all had a destination chosen through a traditional Turkish fortune telling ceremony where they would be sent the next day, from Bangkok to Kathmandu, New York, Paris, Tokyo. They each made the video in their own style with their own equipment, which they then put on their own channels, which they then promoted on Facebook and Twitter etc. It was a great multi-platform campaign, driven largely from their YouTube audience engaging with the brand in a very authentic way that made sense for the followers and consumers of those videos. That, I think, was a typical new approach where you are connected with audiences not by buying media traditionally, but by connecting with creators who can feel close to your message and help express the essence of your brand in their own way, authentically. That’s critical.

We also work with Twentieth Century Fox and we manage all their international YouTube channels in twenty different territories. We focus on increasing their subscriber viewing, and increasing subscribers themselves. We see great results, about 175 percent increase in subscribers after the first year, a 500 percent increase in subscriber viewing after the first year and a 68 percent increase in viewing. There are great stats coming through in relationships where we don’t just engage with the creators in social marketing campaigns, but we actually manage the technical side of the channels too. We help them with SEO, the look and feel of the channel, the best practice for audience development, so that they get more of a holistic approach.

Do you think millennials are forming media consumption habits that will stay with them for life or will the social elements be less attractive as they get older?

I think social media has become part of the new language of media consumption and actually creation has as well. People are no longer passive viewers – they’re actively choosing their device, they’re choosing which channel, they’re participating through responses, they’re creating content themselves. We call this the C Generation. The connected, creative consumers. It’s a community of people that can be of any size. If you just choose individual platforms to reach large audiences, your chances of getting it wrong are getting bigger now because they’re much more distributed.

This is our focus, to basically reconnect TV-scale audiences across multiple platforms, that’s the magic trick we’re focused on right now, to help brands, creators and licence holders re-establish a large foothold, even if it means multiple territories, multiple platforms, multiple markets, multiple devices. That’s really important because that’s where the behaviour of the consumer is.

My kids have a completely different history when it comes to online video – they don’t see that it’s something that’s happened over time, for them, it’s the way things are. They’re in their teens, so their whole life memory is YouTube. So, search, share, consume, create is part of their DNA.

What will come next, I have no idea, but this generation will have that expectation. They also have an interesting expectation that things should be made available immediately. They don’t get the need for geographical or platform and device-based restrictions. When they do encounter that, they don’t sit around and wring their hands, they just go find something else to do. That’s where a lot of traditional media have to take note, that by not engaging on these platforms, they’re forcing the consumer to go elsewhere and they’re losing that consumer for life. They’re finding new talent, new content to engage with, which may become for them the next big brand.

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