State of Transition from YouTube to Professional Production Studios

by admin | Mar 27, 2019 | Case Study, YouTube business

YouTube, the biggest community of independent video producers, filmmakers, and production studios. The platform has given a whole generation of decisive means to earn exposure, fan-following, and make decent money via YouTube Monetization. Let’s not forget the delegated brand sponsorships that come along with broadened followership and audience penetrations.

YouTube is home to a lot of genres- films, short films, documentaries, animations, gameplay, parodies, podcasts, tutorials, sketches, and live streams.  You can find almost every kind of video on YouTube.

All thanks go to the talented video creators, who have popularized the term “independent production studios” in the market. These independent entities on YouTube have given an array of outstanding free content to the community.

Sometimes we laugh, sometimes we cry, sometimes we learn, and sometimes it totally cringes. Whatever be the content, let’s be honest- we have enjoyed YouTube for everything it has offered to us.

Here is the big question-

Can YouTube-Money support a professional production studio?

Have you seen the originals on Netflix, Amazon Prime, or Hulu? Do you think, YouTube-based production houses can deliver something of that stature?

Of course yes! They can deliver a lot more than that. There is no shortage of skilled and talented teams of content creators on YouTube. In fact, some of them have already given magnificent professional content. Content like Vox-borders, RWBY, and Vice- C for Crime etc. are perfect examples of the community’s abilities to produce professional level shows.

Can YouTube level the expenses made while producing professional content?

YouTube can be a difficult place to monetize content. Whether you are an individual creator or an independent production house, leveling up for the production cost itself is quite challenging. Ad revenue is not enough, brand-sponsorships won’t remain forever, and YouTube-based donations are not stable. Eventually, every production unit needs steady financial support to keep up the show. It’s a profession, you need an assurance you make good money out of it.

Consequently, skilled YouTube creators and independent production studios, with a will to support their production costs and team overheads are moving beyond YouTube by hosting their own content.

For that, they are relying on modes like-

–Building their own video streaming platforms,

-Integrating their own monetization models,

-Using crowdfunding for donations and support, and

-Collaborating with premium video streaming services.

What’s the actual scene on YouTube for creators?

With limited resources and earning, most of the independent YouTube-based production studios hinge on inspired content from third-party franchises. It includes parodies of popular mainstream shows & music videos, sketches based on trending pop-culture, animations pulled out of video games or cartoon shows, and a lot of other inspired content that can be managed with limited expenditure.

With this, parallel execution of original improvisations and skills also take place in the form of scripts, voice dubbing, direction, editing, music, and social media marketing.

But, this does not mean independent production teams can go any further with it. While some of them have been able to pull it off through third-party financial support, most of them could not even make it to the next phase –the phase where they can produce original content. The inspired content on YouTube probes inefficient to develop a stable business model that can support survival.

What’s the next phase after YouTube?

YouTube creators, despite using derived content, also showcase their honing skills capable of being recognized as the original cinematic creators in the long run. That’s why they don’t stay there for the lifelong.

With the advancement in technology and growing competition in the equipment market, it has become so easier to create, edit, and publish video content.

• To create, they have got affordable equipment-cameras, mics, lights, etc.
• To edit, they have got affordable professional editing software and computers.
• To share, they have got affordable software solutions to create video hosting platforms.

Perhaps, the next boom in the software industry would come through these creators, who are the potential clients for video streaming software solutions providers. Possibly, this is where software development companies should scan for their future clients, and this is where Netflix, Amazon Prime, and Hulu would get their next original shows.

Success stories – Case studies | those who moved beyond YouTube

These case studies are not just the success stories, but also the inspirations for making a way out of hideous hurdles you face as an independent production unit.  Each case is a unique example of matchless setbacks that can literary destroy your will power. However, the heroes of our studies not only pulled off the obstacles but also evolved to capitalize on them.

1.     Rooster Teeth–Fame to Business

Background

Rooster Teeth is one of the oldest YouTube channels. They started it in 2006, a year after YouTube’s launch. It quickly rose to fame with its show–Red vs Blue. The show derived in the comedy genre from Halo games, made a great impact with its video game animation.

Soon Rooster Teeth became a well-known channel and attracted viewers worldwide. Today, it has over 9.6 million YouTube subscribers on the main channel, 11 other channels, and accumulated over 5.7 billion total views.

Challenge

According to the social blade, their average monthly earnings through YouTube monetization ranges from $5.5K – $88.1K.

Do you think this figure is enough to support a professional level video production?

Of course not! It’s not even close to level up the production cost, profits and earning are far to be considered. They have a huge team to feed and a massive setup to manage.

Solution

That’s why Rooster Teeth choose not to stay just a YouTube channel. Today, they are a full-fledged production studio based in Austin, Texas, Los Angeles, and CA. They have their own website –RoosterTeeth.com, which works on Subscription (SVOD) and Ad-based revenue generation model. The ad led streaming from free while SVOD for ad-free streaming.

With a combined Total of over 16 million subscribers on YouTube, they capitalized on their followership. They post videos on both YouTube and their own website. With over 507 videos, their show Red vs Blue has now a dedicated YouTube Channel, which is broadcasting its 16^th season. The same can also be found on their own website too.

Another best show from their trunk is “RWBY, -an award-winning anime show. The success of the show led them to release the DVDs in the UK, Australia, and Japan, besides it is already available on YouTube and their website. Now guess the extent of its popularity by the fact that cosplay icon Jessica Nigri featured as one of the voice actors.

Current status

Rooster Teeth is a fabulous example of how independent production studios can make it to the mainstream by thinking beyond the horizon. YouTube is undoubtedly the source of their success as it gave them popularity and fellowship. However, they could not have made it to the large-scale production if it was just for the YouTube earnings. Now, at least they don’t have to worry if YouTube someday changes their algorithm and demonetizes certain content because they have their own website and some decently paid subscriptions over there.

Study Impressions-

Even if you are doing extremely well on a third-party site like YouTube, as a production company, you should not limit yourself to their terms and conditions. YouTube is a great platform to earn fame, but you need to direct that fame to somewhere you capitalize on, and build a stable business model out of it. This is what Rooster Teeth did.

2.     TeamFourStar –Copyrights to Self-sufficiency

Background

TeamFourStar came to the fame in 2008 with its parody show Dragonball Z abridged, which they derived from the iconic anime Dragonball Z. Since then, have grown into a family of over 3.3 million YouTube subscribers.  Till now they have uploaded over 60 episodes of the show. It derives the episodes both from the anime shows and over 10 Dragonball Z movies.

The viewership goes in millions for the particular show. Besides that, they now also upload the abridged version of many other anime and games.

The bottom line is –TeamFourStar is not the only one to produce an abridged version of the anime, but it is one of the best creations. The production studio went beyond the traditional competitions and produced more professional content with high-quality setups. Many a time, you would find their abridged content more professional than the original version.

Challenge

The biggest challenge to the team is the production cost, which is way too high than what they make of their content on YouTube. However, the trickiest and most frustrating part is YouTube community rules for copyright content.

TeamFourStar does not possess the copyrights of the Dragonball or any abridged content they make. Hence, they cannot claim on the earnings being generated on YouTube through the show. Though they have expanded their niche to video gameplay with “Let’s Play” and TFS gaming, it is still not enough to support their high-quality video productions. As a result, their main content gets copyright claims regularly, making them lose great money.

Another challenge is YouTube’s algorithm for copyrights claiming is being abused by individuals and bots. If we consider the general official copyright policies, TeamFourStar’s abridged content falls under Fair Use rules.

It states “You can use copyrighted content on YouTube for review, criticism, reporting, teaching, and research”. The same rule also states you can use the content with certain transformation and by adding new expressions such that it does not compete with the original content or affects its performance negatively. In short, your transformed content should not be presented as an alternative to the original content.

We often treat parodies and reactions as transformative with a new voice, a new appeal, and even a new story-line. An abridged content does not replace the original content. In fact, many a time we have seen original content getting more views because of a viral transformative content of the same.

The production company also makes sure that every video starts with a disclaimer that states it’s a parody based non-profit content and gives credit to the original release. However, this does not stop the original content owners (I am not pointing out any company or individual) from abusing the copyright loopholes.

Most of the big professional production houses and brands have bots who scan the copied content and they cannot really differentiate between a plagiarized and transformative content. With an aggressive automated system, they take down or de-monetize any content they find for their claims.

Solution

TeamFourStar found a solution for this frustration in setting up their own video streaming platform. As a result, now they upload their content on their own platform for actual monetization and also on YouTube for more exposure. Of course, they publish the content on YouTube after 6 days of publication of their official platform. It gives their own platform an edge and a decent way to get more subscriptions for their own SVOD platform.

Current Status

Currently, they are active on all the major platforms to get more exposure and support for their productions. Beside the official site, you can find them on YouTube, Twitch, and Patreon. They are also into merchandise, which gives them considerable support from the fans. They also have other channels and sister sites where their live streams and play live games. Most of the earnings and support come through their Patreon page, which has over 2,654 patrons. The support from the platform has helped them set up their own office and work towards a building a full-fledged production studio.

Study Impressions

Publishing on a third-party site would always expect you to abide by their rules. When rules are as harsh and non-human (bot automated) as YouTube, you cannot even expect to earn a penny from derived content. Most of the time, the Fair Use rules for transformative content seem a joke that individuals and bots can easily abuse.

I think, TeamFourStar’s decision to move beyond YouTube was a wise one. It gave them a chance to level up the production cost, make active income, introduce their merchandise, and stabilize their primary profession–video production. More importantly, it gave a direct control over their content monetization and a safeguard from flawed copyright claims from an imperfect automated system.

What’s better–Own platform, Crowd-funding, or Partnership?

No doubt, both the names in our list started with YouTube, gained exposure and then they extended beyond YouTube for active monetization. However, you cannot just always move to your own platform. There are a lot of factors that decide the fate of your venture.

What are the odds?

Take, for example, you have a successful YouTube channel with a large fan following. The nature of your content sometimes pushes it to the de-monetized part because of the copyright claims. Also, the earnings from monetized content are not enough.

In such a situation, you might feel starting your own platform would give control over your earnings and you would make great money. However, going full-time on your platform is not always a great idea. Neither would be selling the merchandise has any crucial effect.

If moving full-time was a definite solution, you would see thousands of production studio-owned streaming apps by now, but it is not so, actually. You hardly see a dozen of streaming apps. Out of which, the big ones are owned by giants like Netflix, Hulu, Amazon Prime, CW, etc, and soon Disney will launch its own service.

If you are a brand of Disney’s scale and can produce the movies and content like Alice in Wonderland, Lion King, and Beauty and Beast, go for your own platform. However, the truth is, you are not Disney. Neither it is your competition. You are an independent production unit, who wishes to produce some great content and maybe, someday become popular like Disney.

Even, Roster Teeth and TeamFourStar were not big. They started from the basic, gained the followers, looked for the perfect time, analyzed the odds, and then pushed beyond YouTube. This is exactly what you need to do. You need to capitalize on the current aspects, current market, current trends, and current opportunities.

• You can host on your own platform to escape copyrights for your popular content like TeamFourStar did.
• You can host on your platform to earn big by capitalizing on large followership and produce high-quality commercial content as Rooster Teeth did.
• You can host on your site with a free model if you are an already established media house like Vice, which offers unique content from some unique genres.

What are the other options?

Another option would include being selected by a production network and getting featured on their well-known platforms. In the same way, AIB (All India Bakchod), an Indian production studio that got internationally recognized for its comedy sketches and satire shows. Their content “On Air with AIB” was featured on Hotstar, and then they made it to Amazon Prime with more shows.

We also saw a similar scene when RocketJump was picked up by Hulu. RocketJump’s YouTube channel is followed by over 8.5 million subscribers. They action-packed content enticed Hulu, which needed them moving beyond YouTube with a partnership model. The show on Hulu was a big hit which gave the production studio more fame and exposure among the mainstream media. They got more shows too, which included an original science fiction names Dimension 404.

It a highly competitive environment, the giants will do anything that takes to give their audience the best content. In this war, the role of originals from various small to the biggest production studios plays a significant role. If they like your content, trust me they will bid huge to buy the broadcast rights.

However, a new trend has also started. Instead of bidding huge and buying the broadcast rights, these streaming platforms are also into their own original content production. You can guess the trend by looking at a huge number of originals content on the Netflix platform (Netflix’s Stranger Things, bird box are great examples). Hulu, Amazon Prime, and HBO are also following the trend and making huge with this approach. HBO’s Game of Thrones and Amazon prime’s ‘The Man in The High Castle’ are a few of the names in the list.

My impressions on this are surprising. Streaming services in the pace of filling their platform with in-house originals are still not seeing the diversity of talent pooled on YouTube. These creators have every talent and skills to produce bests of the originals. The one thing they don’t have is the exposure and funding that streaming services and TV shows provide.

Nevertheless, it’s still on an open option, as we have seen many independent production studios making to the big platforms.  Optimistically, we will see more of them in the time to come.

Does YouTube support its creators?

Besides Ad revenue, YouTube had nothing else to support the creators financially. However, with the beginning of YouTube Premium, we saw a shift. We saw great originals from mainstream production studios (e.g. Cobra Kai), which they later extended to some chosen YouTube channels too.

In the same way, YouTube Red did with PewDiePie (89 million current and 55 million then subscribers). They featured his own show “Scare PewDiePie” only on YouTube Premium, which they later ended because of some political reference. Other YouTube names that made to the premium section include Joey Graceffa(8.9m subs), MyLifeAsEva (9.6m subs) and Game Theorists(11m subs).

A further shift was made when YouTube introduced Superchats and Premium Channel Subscriptions. With Superchats, fans got the option to send paid live chats, which streamers see as highlighted and pinned in the chat screen. While the paid channel subscriptions let followers support their favorite YouTube channel by committing a recurring amount of $0.99 Per Month. These features are not available in all countries as of now. However, YouTube plans to implement it worldwide soon.

Another option that YouTube gives is setting up crowdfunding using YouTube Donations Cards. It’s like Patreon where your fans can support your channel by giving direct financial donations. Channels also use this feature to create different campaigns fundraising for a cause or charity fund.

These are indeed right moves by YouTube and give financial support to the creators for going beyond the limits and spend more to produce extraordinary content. The only catch is–YouTube takes a large cut from all these financial aids you get from your fans. Perhaps it’s okay, as you are using its platform to gain the same.

So why YouTubers need to see beyond?

Traditionally, video production is seen as a huge-scale setup with massive investments for commercial use.  Usually, only the mainstream production studios can afford the products, equipment, and software required to produce commercial-scale videos.

However, today, the trend is shifting and the cost of the equipment and solutions have gone down significantly. They have become more accessible to independent creators. It was never so easy to produce a film.

Further thanks to free ad-based platforms like YouTube and Twitch, which are giving a stage to start the journey and explore the possibilities. With them, video production would have still been a luxury and forte for big labels alone.

Extended thanks to the growth in web development technologies. Today, anyone with a decent investment can build a video streaming platform of their own. You need not code one from scratch. You can buy an affordable script and setup your platform on it. Building a video streaming platform was also never this accessible.

Ultimately, creators with great skills need to move beyond the ad-supported third-party platforms and build their own business model. They need to earn more so they can produce a more and scaled level of content. Today, having a successful YouTube or Twitch channel is great if you do it for a hobby. However, it’s not enough if you are aiming to become a production house with commercially acceptable content. Eventually, you would need to extend and depend on mainstream monetization to make a living out of it. You need to feature your content on your own platform or a mainstream Network that gives you a lot of money.