It might seem counterintuitive, but many top YouTube stars are actually making a killing on a different platform: Instagram.
Many YouTube stars have built diversified income streams that can net them up to PewDiePie’s eye-popping $12 million per year.
And the industry is changing rapidly.
In January, Business Insider interviewed Scott Fisher and Adam Wescott, who manage YouTube stars like MyLifeAsEva (7.2 million subscribers) and LaurDIY (4.2 million subscribers), to get a sense of where the money was coming from.
But a lot has changed since January, particularly with the emergence of Facebook and Instagram as players in the market for video superstars, so we decided to check back in with Wescott to see how the business has changed.
Instagram is king for brands
While revenue from Google’s ads provide a baseline income YouTube stars can count on, Wescott says a huge source of income is working with brands on things like sponsored videos, and that that market keeps going up and up.
“On the brand front we’re only seeing increased influence across all talent platforms,” he says. But Instagram in particular has emerged as the brand darling. “Could I have told you eight months ago that we would be doing as much branded business on Instagram as we are? No. It wasn’t a priority at the time. It was usually looked at as complementary as the bigger value of a client’s YouTube integration.”
Now Instagram is the main event. Why is that?
“It’s a little more controllable in the creative,” Wescott says. “It’s a single image versus a three- to five-minute video.” And there are big audiences to be had on Instagram as well.
Instagram saw a bit of competition from Snapchat early in 2016, but has emerged largely victorious from a sponsored content perspective, Wescott says.
“There was a little blip of time in the spring where [brands] were very interested in Snapchat … And I think you saw that almost flip overnight with the introduction of ‘Instagram Stories.’” Instagram Stories are Instagram’s Snapchat competitor, which let you make a daily story that strings together photos and video.
Which platform to choose
Collaborations with brands aren’t the only place Wescott’s clients have to worry about juggling multiple platforms. As Instagram, Facebook, and Snapchat have all emerged as major distribution points for these stars, they have to decide where to devote their time.
This is how Wescott breaks it down for his clients: “The biggest value for our roster continues to be YouTube videos, Instagram as far as engagement, and Facebook has the crazy built-in eyeballs.” They all serve their purposes, and are used in different ways.
Here’s an example, from Wescott’s client Gigi Gorgeous. “Gigi Gorgeous will post an original video on YouTube on a weekly basis, three- to five- minutes long. Then a 30-second cut down to her Facebook page, almost as a promo.” If revenue improves on Facebook, that might change.
The new TV
The other big opportunity Wescott sees in his clients is in selling TV series, particularly to outlets that have YouTube overlap, like YouTube Red (the company’s premium service) and Verizon’s Go90.
“The dollars are moving behind-the-scenes, but viewers won’t get to see it for awhile,” Wescott says. MyLifeAsEva (Eva Gutowski), for instance, has a half-hour comedy series coming to YouTube Red in 2017, and Gigi Gorgeous has an upcoming documentary about her life, also on YouTube Red.
ButWescott is looking to pitch more established players too, like Netflix, MTV, or the CW.
The key for YouTube talent looking to branch out, he says, is having a bunch of concepts ready to go. Wescott works with each of his clients to develop short-form, half-hour, and feature-length ideas. That way he’s always ready to pitch.
No one platform has emerged as the dominant place that YouTube stars can get blockbuster deals for more high-cost series. YouTube Red and Go90 kicked it off, but Netflix has jumped in the game, buying series from Miranda Sings and Vine star Cameron Dallas. (“We would stil love to get in and pitch Netflix,” Wescott says.)
The next few months will show which of these platform’s audiences truly have an appetite for the type of content YouTube stars are turning out. “When the dust settles we’ll see where the eyeballs will land,” Wescott says.