Why YouTubers Are Having a Hollywood Moment
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It's not news if you listen to the town that YouTube is kind of a big deal now. The latest Nielsen gauge chart just came out and YouTube jumped Disney to become the biggest distributor in the U.S. 11% of viewing on TVs. Bigger than Netflix and Prime Video combined. Remember, Disney has multiple networks and streaming services that are counted in that age. That's just on TVs. Pretty remarkable.

The invites are starting to go out for the TV upfronts in May in New York. That's where all the outlets do their presentations in pursuit of ad dollars. And YouTube's Brandcast event is likely to be among the hottest tickets around, all of which is great for the upper echelon of YouTube creators, the ones that really monetize the platform. Because as YouTube slowly becomes just TV, these creators are becoming the new TV stars. We know this because subscription streaming services are now really going after them for shows.

We've talked about how YouTube is now Netflix's main competitor. And if you look at the Netflix top 10 this week in the TV category, Miss Rachel is there. She's a big YouTube star for kids, young kids. She now does a show for Netflix. Over at Amazon, they've got Beast Games with Mr. Beast. They did pretty well. Our buddy Lucas reported that Mr. Beast wants $150 million for season two of the show. And he'll probably get something close to that. Other

other services like Peacock are also wooing these YouTube creators. And some of the biggest ones, including our guests today, they're doing their own upfront event tonight in New York where they're banding together to try to get ad dollars out of these brands personally.

The lure of these other services, of course, is that they can dangle bigger budgets and a wider audience and, yes, a little more prestige. And in return, these services are hoping to tap into that rabid fan base, especially after studies suggest Gen Z audiences prefer these creators to traditional film and television stars.

I wanted to do an episode on the business of top YouTubers. And then I saw that Netflix was having discussions about a new series with Dude Perfect, which is a sports-focused group of creators, very successful. They raised $100 million in private equity last year, and they just built a huge compound in Texas. My kid watches their trick shot videos. We actually saw them live last summer in a packed arena. We've got a following of tens of millions of fans.

So today we've got Andrew Yaffe on the show. He's the CEO of Dude Perfect. He's held that job since fall and he was at the NBA for many years before that, running their content operation. Dude Perfect is a great YouTube success story, but now they're thinking about making the jump to Netflix or Amazon or one of the others. Why is that? Today it's the cross-pollination of YouTube and subscription streamers. Are YouTube stars about to have a big Hollywood moment? From The Ringer and Puck, I'm Matt Bellany and this is The Town.

Okay, we are here with Andrew Yaffe, who is the CEO of Dude Perfect. That's a pretty cool title. Welcome. Thank you for having me. I like to think so. Chief Dude? Dude in Chief? Yeah.

I've been called a lot of names. Yeah. All right. So I want to get into this whole state of the creator economy and where you guys stand, and especially given how well YouTube has been doing lately as a whole. But you guys are doing your own upfront event. You and a bunch of the top YouTubers are doing your own sales event for advertisers tonight. Why are you doing that?

It's something that we've talked about for quite a while that much like traditional TV, we have content plans several months in the future. And we wanted to give brands and others insight into what those look like and allow them to see some of the things that are coming down the pike and see where they might want to get involved. We have a variety show that looks like it could network TV and

And it's something we want to bring to traditional spenders who are spending on television and see if it's something that looks very similar. It's getting 10 million views an episode. See how they might want to be involved in it. And you can put your logo on the basketball that we shoot the trick shots for and things like that. Well, I mean, one of the really exciting things about a brand of our size and YouTube in general is

We like to do a lot more custom integration than that. We like to figure out what works for individual brands. So we did a recent Carvana partnership. And in that one, we gave away cars. We shot the video of their car vending machines. There are deeper integrations that you can do with the style of content that we do. And we think that's a really appealing element of the content we create for our brand partners.

Does Dude Perfect make more money on relationships with individual brands like that or via the split with YouTube from monetizing the videos?

Both are healthy revenue streams for us. We have a few very meaningful brand partners that integrate across a lot of our content. I came from the sports world. I think about it a lot like a sports franchise where just like the NBA has Gatorade as their official hydration partner, we've got Body Armor as our official hydration partner. And so that's a really meaningful relationship for us.

And I imagine that's growing, whereas the YouTube split is sort of static. You got to really grow the views in order to grow that piece. Yeah. And, you know, the YouTube split is also a bit of a quantity game in terms of how much we're, you know, brands produce for certain creators that are producing a lot more content than we are, you know, on our main channel, our long form videos, 25, you know, 25 videos a year are some creators who are producing daily content and

And so when you're producing that much, the advertising becomes an even more valuable revenue stream. You need to get yourself a Japanese dude to add to the Dude Perfect group because the Dodgers seem to be signing a brand partner every single day for Otani. It seems like they've hit on something with these foreign groups that want to sponsor teams with foreign stars.

It certainly helped. I've seen that firsthand, the foreign superstar. The NBA has done that too, I know. Yeah, if Shohei wants to hit any homers with us. Yeah, I'm sure he would do it. He'd probably love to do it. I don't know if he would go to the middle of nowhere Texas to do it, but he might. I mean, the Dodgers do play the Rangers a couple times this year. Yes.

All right. You mentioned that your videos have a TV quality to them and that you're trying to do higher level, upper level, more elevated content for these advertisers. You are also one of the YouTubers that has been talking to

Traditional streaming services, Netflix, Amazon, Peacock, those according to what I've read. Why would you guys who have a great business on YouTube, why would you be interested in taking the content to a traditional streaming service? Why do you need that?

It's something that Dude Perfect has done for a long time. Before my time, but the guys had a show on Nickelodeon for many years. We've had a partnership with Amazon streaming Thursday Night Football as an alternate broadcast. And ultimately, what it comes down to, honestly, it starts with the creative. There are certain things that traditionally allow you to both reach a different audience, but also create content at a different scale. And

And there's some really exciting ideas that we've kicked around that others have reached out to us about around content that based on a business model on YouTube may not make enough sense, but in a more traditional distribution model with different scale, different monetization, different budgets, there are different approaches that are interesting to assess. So it's really just about giving you the resources that you need

to do something bigger and more potentially noisy? I mean, can you give me an example of something that you would want to do that you can't currently do? Like, is it just like giving away better cars? No, it's not. It's not just the resources. It's that the model is pretty different. But get into the model. Get into the model because I think our listeners are interested in the model for a YouTuber who takes their talents to a subscription service.

Yeah, so in a traditional YouTube video, we'll produce that ourselves. And we have pretty high levels of production. So what's the typical video cost?

We don't get into exact numbers, but less than an hour of traditional television, for sure. Obviously, we know that. But like a million bucks? I mean, you guys do some elaborate stuff. That Vegas stunt must have cost a ton. You shot a basketball off of the stratosphere. That's not cheap. That was not cheap. Certain videos definitely get into several hundred thousand dollars. Many of our videos are less expensive than that. But being able to create...

episodic content at scale is something that getting an individual brand and support for that probably isn't enough. And so finding other ways and other distribution models and also other audiences. We have an amazing audience on YouTube that has loved our content for a long time, but we think that when we're on Amazon broadcasting Thursday Night Football, we reached and heard from totally different audiences who weren't familiar with our YouTube content.

Yeah, I imagine the demos on that are different, right? Yes, yes. Your demo on Dude Perfect, I imagine, is younger than what you get on an Amazon.

Yeah, that's correct. Our suites on YouTube is probably in the 8 to 24 range. And when you're on a traditional podcast, it just naturally reaches a slightly older audience. Yeah. But those are like hired hand type deals. Like Amazon brings you on to do something for football. That's different than what we're talking about. And the example that everyone seems to be citing is what Amazon did with Beast Games.

where they were able to give him a big budget. It's hilarious that he claims he lost money on a $100 million deal. But I imagine you could probably make your show for less expensive than that. Less than $100 million. I think we could get by. You could swing that. But we look at Jimmy's sense of ambition. It's incredibly impressive to look at. So the...

audience on these platforms. I mean, that's really what you're going for, right? You have a certain audience, but there is a, I don't want to say ghettoization, but there's a certain limitation to growth on YouTube. It seems, I mean, I would have, I would have thought it would be much more five, 10 years ago than it is today when so many more people are watching YouTube on their television. I

But I imagine you look at a platform like Netflix with 300 million subscribers worldwide and you say, okay, we can...

go to the next level if we have a hit on one of those platforms. Like most people didn't know what Miss Rachel was. I know because I have a niece who is two years old, but Miss Rachel is now in the top 10 on Netflix and getting a whole new level of exposure and presumably brand awareness and things like that. I imagine that's what you want.

Yes, that's definitely a big component of it is reaching that different audience that is on Netflix and or on a streamer or on a traditional broadcaster that does look a little different than our existing YouTube audience. And we think we have the right creative that can reach the reach those audiences. So many of the agents and managers.

are trying to get more heavily involved in this world. You guys have CIA behind you. What does CIA do for you? Other than book your tour and pitch you in meetings, what does a big talent agency do for a YouTube collective now?

Yeah, the way that relationship actually came together, part of the... And this preceded me, but as the guys looked through his money, they went to CAA and took some advice from them on how to approach the fundraising process. One really interesting thing for us and where we're a little bit different than most creators is our primary relationship with the CAA sports group. And so given... We're...

looking at interesting relationships that come together with different athletes and different sports organizations and broadcasters because a lot of our content, we're working with top athletes, we're working with top teams or events and properties. It's a little bit different. It's not sort of a traditional, they're

representing us on every brand deal. They're bringing up, you know, they're executing our tour. They're doing more around a relation from a relationship standpoint. We have a great relationship with them that it's been, it's been very valuable for us. And you only have, according to the report I saw, you only have 35 employees. Is that right?

Yeah, when I came out about six months ago, we had about 25. We've added to the team. We're up to 35 and hoping to grow. We'll probably be at around 60 by the end of this year. I mean, that's pretty insane. You just built a $5 million compound. And I'm presuming the revenue from these tours and from the videos, we're talking tens of millions of dollars of revenue. That's a pretty damn good business. Yeah.

This episode is brought to you by AMC+. Dark Winds is back. Produced by Robert Redford and George R.R. Martin, this all-new season of the critically acclaimed AMC Studios series has been praised for its exhilarating storytelling, breathtaking southwestern landscape, and captivating indigenous cast. Binge the first and second seasons now and stream season three of Dark Winds only on AMC+. Learn more at amcplus.com.

Nordstrom brings you the season's most wanted brands. Skims, Mango, Free People, and Princess Polly, all under $100. From trending sneakers to beauty must-haves, we've curated the styles you'll wear on repeat this spring. Free shipping, free returns, and in-store pickup make it easier than ever. Shop now in stores and at nordstrom.com.

How did you evaluate the money? Were you there when they raised? No. No, I came after the part. Yeah. Okay. Because I imagine there's just a flood of private equity and other private investors that want to get into this space. And it's interesting how you evaluate those suitors. Yeah. I mean, the guys had a lot of interest when they raised money about...

The guys had a lot of interest in money. Good. Yes. But there were a few different things they looked at. One, they looked at a few different models of how they could pursue growth. And they found a great group of partners who want to invest alongside them. And where the guys can stay very invested in the business. But we have...

As you said, we're highly profitable and we've got a lot of capital as well. So we can really, one, make our own investments in areas. And two, I think a lot of creators have to take deals that they don't feel great about because they're looking for cash flow, because they're trying to hire their next employee. It's not a problem we have.

that we can really take some more risk. We don't have to take every deal that comes our way just to stay afloat. We're a really proactive, strategic place. And it's an exciting place to be. Yeah, I think a lot of our listeners are in the traditional Hollywood-style businesses and would probably have their eyes pop out if they saw what kind of money the Cotton Brothers are making on YouTube.

I mean, it is a phenomenon. Now, you guys have been doing this 15 years, but what are the growth areas? Like, what do you see as the next five to 10 years in the evolution of the creator economy on YouTube? I mean, I think a lot of it is things...

that are going to look more and more IRL. It's going to be, and I think MrBeast, Jimmy's done a great job of this with Feastables. I think our tour where we're in front of a quarter of a million people in real life every summer, I think you're going to see us develop a lot more consumer-facing products. Chocolate brand? You're going to sell chocolate? No, no.

Maybe not a chocolate bar, but consumer-facing products, consumer-facing experiences that we think our fans are going to love. We've done board games and toys and a whole bunch of other stuff we have in the works there that our fans have really loved. And we do collab products with Body Armor and others. I think that's where you're going to see... We're very fortunate that we've got a really large, highly engaged audience on YouTube that

is excited about the types of products that they were able to build. And do you agree with me that the overall content offering on these streaming services is going to start to look a little bit more like the creator economy? They're going to, as much as YouTube wants to elevate and be more professional looking for advertisers, the Amazons and Netflix of the world want to appeal to the Gen Z and young millennial audience that grew up

with these creators and they're going to start to do more of this style content on their services. Do you agree with that or do you think it's going to remain distinct? I think based on my inbox, the answer is yes. I think it makes a lot of sense if you're a Netflix or an Amazon and you have a lot of premium, expensive to produce content that

You look at YouTube where even our most expensive videos are cheaper than some of the content they produce. Let's pull some and understand what works and what drives our audience. So I think you're going to see all of them taking more and more bets on some of the bigger, more proven YouTubers. See if they can reach that audience, migrate some of that audience. Just as I think YouTube has done an amazing job in their...

a great partner of ours as well, in sharing the message that half the consumption is on TV, as you said, and that it's highly premium. And that the Nielsen Gage report that came out this week that there's more YouTube watched on TV than Amazon and Netflix combined. The scale of that is immense and not something that we're ever going to... We're very fortunate to be a part of that ecosystem.

It's a line, though. You got to walk a line if you're programming one of these services. You don't want your platform to feel free when you're charging, even if you're trying to get more people on an ad tier model.

And then if you're YouTube, you want the opposite. You want more people to be upsold into a premium tier where they get fewer ads and they're paying you money. So it's like one is trying to become the other before the other becomes the other. Yes. Yeah. And I mean, I think you're seeing that in a lot of places here with, you know, video podcasts. Like there's a lot of really interesting dynamics. Don't say that. Don't say video podcast. I'm trying to avoid the video thing as long as I can. Yeah.

There's a lot of interesting areas where I think platforms are starting to run together for sure. Yeah. And do you think it's going to... I mean, I've always thought it's going to take one massive hit. If you guys all of a sudden create the next phenomenon. And Beast Games was a hit, but it wasn't a mass, you know, everyone's talking about it hit. I think Mr. Beast...

expanded his audience with the Amazon show, but I don't think it ever got to that upper level of phenomenon where everybody's talking about it. Do you agree there? I certainly think in our world, everyone was talking about it. In a good way? Like, look what he did. We should try to do that.

Yeah. And I think everyone, you know, everyone we talked to was what I'd watched it and was watching it. And so I think there was, there was a lot of interest in it for sure. Your guys were like, wow, that's cool that he did that. I think it was definitely considered successful. Yeah. Okay. Well,

Well, Amazon's been putting out these numbers showing it's been successful for them and people who came in for it bought more stuff. And it's all not verified. I mean, they were very sensitive because the perception around Hollywood was that they overpaid for this show to outbid Netflix. And it seems like it did well and they're willing to re-up it. But we'll see if he gets $150 million to do it in season two. Yeah, I mean...

Proof is in the pudding to some degree on it. Well, you're hoping he does because you want the market to be set a little higher. It certainly wouldn't hurt. Yeah. So what's success for you and your new job and for Dude Perfect in the next five years? Do you guys want to... Is there a number you want to hit that these upfronts are doing?

No, honestly, it's not even revenue to some degree. I think just continuing to grow the content franchises, content verticals. I think a big thing over the next five years is adding additional talent underneath our umbrella is going to be really important. Got to have a network. You got to be able to spot talent and develop them because these guys are not getting any younger. They're not going to be able to do trick shots forever.

Yeah. And I think we believe that Dude Perfect means something and that it'll mean something in other verticals with other talent. So getting into those areas and determining the right business models there. But I think five years from now, we are much larger and have a lot more content and more products and fun consumer experiences that families can enjoy. Can I ask one question, Andrew? Yeah.

Is there any mistake you guys made along the way as you scaled on YouTube and made new bets, merchandising, any direction you went in that you felt like, oh, we actually overstretched right there and had to pull back? Yeah. What are you cleaning up? On YouTube, it's sometimes easy to chase the view and chase views to say, hey, we're seeing there's an emerging opportunity in X or Y. If you don't have...

a plan around how you're going to build a business around that. If you're not certain of what brands are going to support that, what products are we going to build off that, you can get distracted. We should start a Dude Perfect podcast and then you realize you didn't have the means to do that or the infrastructure to do that consistently or something.

Not that example specifically, but something like that. We had launched a gaming channel four or five years ago without a perfect plan on how we were going to tackle the gaming market. We now just relaunched that a few months ago and have gotten a lot more ducks in a row on how we're going to build that into a sustainable channel. Breaking news, guys. Breaking news. Leonardo DiCaprio has joined YouTube.

He has a new YouTube channel for his new trailer for the Paul Thomas Anderson movie. And he has launched a YouTube page. I'm sure someone told him this is happening. And he was like, sure, whatever. There's so much just now that every celebrity wants one. Every athlete wants one and doesn't realize...

It's really hard to produce long-form content. Oh, he's not going to be producing anything. Are you kidding? Sure, but you look at Ronaldo, who popped one up and has 100 million subs, but no content. Andrew, how much are you guys looking at the data analytics on YouTube? How much of that is you guys just doing the content that you like the most versus following the numbers and the trends and kind of seeing what people like MrBeast are doing?

and trying to replicate certain models, thumbnails, like how much audience engagement metrics are you guys looking at?

It's a little bit of both. We are deep in the data and trying to understand retention points in our videos and drop-offs and things of that sort and looking at other channels to see what's working. But ultimately, I think when we go away from the stuff that makes us great is really when we struggle. And so we joke about we haven't done escape rooms or some of the YouTube trends. Yeah, right, right.

Those probably just aren't a fit for us. And so we want to make sure that we're doing things that ultimately make sense for our brand, especially as we... The big picture here is how do we continue to build the brand as much as it is build the YouTube channel. Did the guys start out editing their own videos? And now I'm assuming you guys have a full editing team. Yeah, they started... The five of them for probably seven or eight years was just them. They added a couple guys at that point. And then over the last...

you know, almost 10 years, we've gotten up to 20 to 25 on the production side. You guys need a little edge. You need a scandal. You need someone to like steal somebody's wife or have a drug scandal or something. Get a little edge.

We are a trusted family brand. That is all we got. Yeah. You should use your trick shot skills to rob a bank or something. Yeah, exactly. That could be a Netflix movie. Yeah. I was going to say, that's your scripted idea. All right. Well, good luck to you guys. It's a great success story. And my kids are super into the videos. So you won. You won a consumer. You won a brand fan for life.

Great place to start. We're not coming to LA this summer, but if you want to come to a show, let me know. Absolutely. I'll take you up on that. Thank you. Thank you, Matt.

We're back with the call sheet. Craig, your guy, Jason Statham. New movie this weekend. Yeah, they shouldn't even give it a time. It shouldn't be called a working man. It should be called Jason Statham 9. I know. This movie was co-written by Sylvester Stallone. Picked up by Amazon last year. It's a follow-up to The Beekeeper, which actually grossed $162 million worldwide. David Ayer directing again. The tracking on this one is $10 million. And I...

I'll take the over on this just because I think Statham and they put the TV ads and the pre-sales I've seen have been decent. I think his audience shows up. I agree. People love Statham. Beekeeper opened to about 17 million last year when it came out. And I think a Beekeeper sequel is in the making. Otherwise, I was going to say they should have just called this Beekeeper 2. But I think they are making a sequel. Yes, they are doing a formal sequel. And I'm sure Lionsgate has rights to that. And this one was...

on the open market. So Amazon MGM picked it up. The other offerings this weekend, man, it's a slim pickings out there. There's a Jenna Ortega, Paul Rudd horror movie called death of a unicorn, which is from a 24. Yep. Which just premiered at South by yes. And not too very good reviews. So I think there it's a little bit of a dump there. They're putting it up against another horror movie. There's a Blumhouse movie called the woman in the yard.

And that's what do you mean another horror film? I don't think Death of a Unicorn is a horror film. I think it is. I think it's just a comedy. No, it's a comedic horror film. I think I think the unicorns go nuts and start killing people. Okay. Yeah. Yeah. Dark comedy, perhaps. But yeah, I don't think either of those is going to do anything close to the business that you might expect, especially from Jenna Ortega, man.

I'm a little worried about Jenna Ortega. I'm not going to lie. I'm a fan of hers. I really like Wednesday. But other than Beetlejuice, Beetlejuice, which, you know. Other than? You mean other than the movie that was a hit? Like, I'm not worried about her. But that movie was not a hit because of her. No, probably not. But I think she was a value add element that got young people into it. I know. But you look at the, I mean, her movies since Wednesday came out. Finest Kind, Miller's Girl, Winter, Spring, Summer, or Fall, and now Death of a Unicorn, other than Beetlejuice.

Yeah. I haven't looked at what she's got coming out, but you know what? Wednesday is going to drop later this year and all will be right with the world. She should stay on Wednesday for, for more than season two. I know there was like talk about her leaving and kind of, I suggested it. I think she will leave. Yeah. Pulling a Chevy chase and bailing that that doesn't work. She should stay a couple more years and let this thing continue to grow. And she can be the biggest star on Netflix for the next five years of her life. Yeah. Although it shows Netflix stardom does not necessarily translate because the director of,

of Woman in the Yard is Jaume Collette Serra, who just had a huge hit carry on on Netflix. And now he's got a movie in theaters that's going to probably gross like mid single digits. So it doesn't necessarily translate. But isn't that more of an argument to stick around on the biggest show on Netflix before? No, I'm talking about the director. You're talking about the star. And yes, it does. If you've got a hit, stay with the hit.

I'm sorry. Like, hits are very rare. These people who leave, you know, Dan Stevens, David Caruso, these people who leave, it doesn't usually work out. That's why I'm staying on the town with you.

Yes, you can continue to slum it here as your star rises and you're way too good for this show. So I'm officially taking the over on 10 million for Untitled Jason Statham Kicking Ass. Jason Statham 9. I think it'll overperform. That's the show for today. I want to thank my guests, Andrew Yaffe, producer Greg Horlbeck, our editor Jesse Lopez, and I want to thank you. We'll see you one more time this week.

This episode is brought to you by Universal Pictures. From Universal Pictures and Blumhouse come a storm of terror from the director of The Shallows, The Woman in the Yard. Don't let in. Where does she come from? What does she want? When will she leave? Today's the day. The Woman in the Yard. Only in theaters March 28th.