Power Sixer by VideoInk Editorial

March 2014

Power Sixer

Issue 5

TheVideoInk.com Power Sixer April 2014

Founder Jocelyn Johnson Editor-in-chief Sahil Patel Contributors Michael Varrati Liz Miller Designer Karen Almonte

www.thevideoink.com

VideoInkNews

TheVideoInk.com Power Sixer April 2014

VideoinkNews

videoinknews

videoink

10 Erin McPherson: right place, right time right vision, right executive 14 David Freeman: The power broker for online video 16 Ran harnevo: Building the future of video 20 Matt diamond: focused on an empire 22 Dana Settle: and the power of belief 24 peter chernin 26 Screen shot/Movers 28 playlist live and the value of meeting in the meatspace

TheVideoInk.com Power Sixer April 2014

ho are the most important executives in the online video space? Better yet, who are the best executives in the online video space? That’s not an easy question. Even for an industry that most would describe as still emerging, there are many who can be considered very important. In fact, when we sent out a call for you, the industry, to nominate those who would best fit the description of an “online video power player,” we received an overwhelming number of submissions. But that’s a good thing. It proves that this space, this oft-criticized space, is not one to be ignored. There are interesting deals, mergers, acquisitions, investments — groundbreaking moments — happening in online video, not to mention the goldstar content being produced. And you, dear readers, didn’t make the decision of selecting the Power-Sixer candidates easy on us, either. The individuals you submitted for the “VI Power-Sixer,” whether they grace this list or not, have been at the forefront of the evolution of

TheVideoInk.com Power Sixer April 2014

the status quo in entertainment. Television is no longer restricted to the television screen. Creation is no longer only in the hands of the deep-pocketed. Democratization has already happened. Now it’s a race to see who will be the “firsts” in the digital video economy that’s emerging out of this revolution. For our inaugural “VI Power-Sixer,” we’re betting that these six executives, who have already made plenty of noise in the online video space, have a lot more noise to make before all is said and done. Come back throughout this week on VideoInk as we get intimately acquainted with the following six individuals spotlighting their important accomplishments in the space, how they’ve played an integral role in the development of this burgeoning industry and what they still have up their sleeves. Happy reading! Jocelyn Johnson Founder, VideoInk

TheVideoInk.com Power Sixer April 2014

What makes Erin McPherson, the current chief content officer at Maker Studios, terrific at what she does? “She understands talent and the creative process -- and that’s unique,” says Larry Tanz, CEO of multi-platform studio Vuguru, who’s crossed paths with McPherson at multiple points in her career -- back when she was head of video at Yahoo, and more directly when she was associate general counsel at LivePlanet, an entertainment company founded by Ben Aff leck and Matt Damon, and presided over by Tanz. “She speaks their language and understands how to work with them,” he adds. Over the years, this has enabled McPherson to make deals with producers and talent that others, including her predecessors at Yahoo, weren’t able to. There’s no better example of this than Yahoo’s deal with the “CSI” creator Anthony Zuiker, who distributed “Cybergeddon” on Yahoo. “Anthony Zuiker had a dream of doing an interactive cyber-crime story,” says David Freeman, co-head of the Brand Coverage

Group at CAA. “Anthony’s a maverick, but he wasn’t sure about Yahoo. Seeing Erin in action, though, in that first meeting, just how she made him comfortable... She conveyed to him how important his creative freedom was, and was also able to lay out the entire marketing and distribution platform. I was able to see Erin bring that to life, and it led to a tentpole project that we’re all proud of.” But where does this innate ability to understand creators come from? Hollywood is its own animal, so how does one learn to talk its talk, especially in an industry that has complicated relationship with traditional media? Part of McPherson’s talent can be attributed back to the fact that she was and is a drama geek -- or, as she likes to call herself, a “frustrated creative.” “I was involved in theater from college to law school -- in fact I played a lead role in a joint production between Harvard and Harvard Law that co-starred Rashida Jones,” says McPherson. “I’ve always loved the creative arts, and as a lawyer, it was no acTheVideoInk.com Power Sixer April 2014

cident that I gravitated toward repping talent.” And that’s the other thing from her past that makes Erin McPherson what she is today: Erin McPherson, inarguably one of the most important content executives in online video, was also once a lawyer. First at companies like LivePlanet and then at the entertainment-law firm of Stone, Meyer, Genow, Smelkinson & Binder, McPherson worked with a lot of Hollywood talent. “I would have a great rapport with clients,” recalls McPherson. “In fact, I was acting more as a manager than a lawyer -- reading scripts to talking to clients about casting.” This background would prove to be invaluable for McPherson as she made the leap from law to Yahoo, became head of video at the company, and now the content boss at Maker Studios. “Knowing and understanding the deal models of film and TV and how they are evolving has been really, really helpful,” she says. For her, and for Yahoo. That said, surely being a theater geek and having a legal background can’t be all that it takes to become a top executive in the online video space. You also need ambition to shake things up, and the opportunity

to make it happen. And that’s what McPherson found in Yahoo, which she originally joined in 2007 as VP of business development for the entertainment category. Three years into her tenure, McPherson says she saw something that Yahoo could “not miss”: “Timing is everything in life -- my timing was perfect,” she says. “We finally had reached a point in the larger marketplace where premium content was online -- consumers were ready for it, and the hardware and software was there.” To be fair, she says Yahoo was already creating great original video, across categories like sports and news. The problem was, it wasn’t centralized in the organization. Seizing this opportunity, McPherson, who was already

TheVideoInk.com Power Sixer April 2014

“deeply involved” in video creation through her business-development role, pitched Jimmy Pitaro, the head of media at the time, about this “massive opportunity” in the online video space. He agreed, so did then-CEO Carol Bartz, and both signed-off on McPherson leading the company’s push into original video content. “I had enough goodwill at the company to be able to push an initiative through,” says McPherson. “And this was a transformational moment that should not have been missed by Yahoo.” What followed was a big push by the tech company into original video programming. This was the first time Yahoo had seriously invested in video-creation, actually deficit-financing programming, something that online video content companies still struggle with. “It gave us credibility within the

ad community,” says McPherson. “We went into meetings and said, ‘This is what we’re building, do you want to come partner with us?’ -- Instead of, ‘We will build it if you buy it.’” (Sound familiar?) That said, advertiser interest didn’t immediately translate to deals. But McPherson’s eye for content would ensure that Yahoo wouldn’t be deal-less for long. “Burning Love” is one of the biggest success stories to come out of the online video world. But Yahoo couldn’t sell the comedy show’s first season. It did, however, sell seasons two and three, to agency PHD, which locked up both seasons on an exclusive basis.

Sometimes though, to be a great executive, you also need luck. McPherson joined Yahoo at the right time. And it seems she found the perfect time to make the move to Maker Studios, a company that was just acquired by Disney, and has some high ambitious for its place in the future of entertainment. “With Maker, I was attracted to the audience -- 80% are millennials, 60% are outside of the US, and 40% are on mobile,” she says. “This audience sits at the center of the transformation of in media. It’s really exciting for a programmer.” For McPherson, it’s a new challenge. “I’ve got this amazing pool of 55,000 creators globally that serve as a giant piloting center,” she says. Maker can mine ideas from this pool, she says, and source-up new ideas. “You can not market down to the Maker audience,” she says. “It’s not a push system, it’s a pull system. It opens up the opportunity to serve passions at massive scale.” “I’m going to have people inside Maker who serve as next-gen casting agents,” she continues. These “agents” will search for content that meets an audience demand, as well as for creators who might fit the profile of someone the company needs for a new video or series. In other words, it’s a challenge she’s already working to topple.

Playlist Voices: YouTubers on youtubers

he next Playlist Live will be in November at the Meadowlands in New Jersey. From now until then, who is a YouTube creator that people in the business should keep an eye on? Charles Lincoln “Link” Neal (Rhett & Link)-“I predict Flula is gonna make an even bigger splash over the next year. Craig Benzine- I think I’ll shoutout my Chicago people, Emily Graslie who does TheBrainScoop, Jake Jarvi who makes the web series I’m in called ‘Platoon of Power Squadron‘ on PineAppleBoyFilms, and genius musician Rob Scallon Grace Helbig- “I have really great feelings about Candace Carrizales. She’s really, really funny.” Mike Falzone-“Andrew Huang and Andrew ‘Gunnarolla‘ Gunadie are two of the most stupidly talented people I’ve ever met in my entire life. I think young YouTubers like MarinaShutUp and Connor Manning have a lot of great things to say and it’s fun to watch them find themselves. Meghan Tonjes has been coming into her own as a woman and as an artist for years now. Sawyer Hartman-there are some great up and coming and also established creators that are just growing out of this world. However, I think people in “the business” should focus more on the content the creator is making rather than solely the fan base they possess.

TheVideoInk.com Power Sixer April 2014

t the heart of every move made in this industry, there’s one unifying thing: The right deal brings together the right people for the right project. And in the content world, it’s the right talent agent whose makes those deals. Talent agencies have had digital departments for years, but their roles have evolved in dramatic ways as Hollywood’s engagement with digital content has shifted from “webisodes” to “House of Cards.” And one of the major dealmakers leading that charge is CAA’s co-head of the Brand Coverage and Digital Content groups, David Freeman. Freeman originally began his career in the digital space by founding the sports and entertainment marketing company Matter, which was acquired by Edelman in 2008. “My business over there was working with advertisers, to make smart investments in sports entertainment,” he says. “The hope was that brands could create real original content.” And as the digital content space began to mature, 12

TheVideoInk.com Power Sixer April 2014

Freeman thus found himself spending time with many different brands on the entertainment front -thus, when the opportunity to move to CAA came up, “This evolution and revolution really drew me to it.” When his department was originally founded, Freeman says, “the partners at CAA knew that we had to build this out, but it was more of a curiosity -- now, so much of that big talent knows they need to have a digital strategy and take advantage of the digital ecosystem.” “What I knew would be constant was great storytelling -- and CAA represents some of the best storytellers in the world,” Freeman adds. “Being at CAA over what has occurred over the last few years has meant unbelievable opportunities for me and for our client base.” Because while CAA does represent several classic YouTubers, including Kevin “KevJumba” Wu, Freeman estimated that only about 20-25% of the people he works with are native to the digital space. The rest? You’ve definitely heard of them.

Since joining CAA, Freeman has been instrumental in bringing A-list talent to the digital space for original content, including Sarah Jessica Parker’s “City.Ballet” for AOL and Tom Hanks’ “Electric City” and Anthony Zuiker’s “Cybergeddon” for Yahoo. AOL On Originals VP Gabriel Lewis, who worked with Freeman on both AOL’s 2013 and 2014 programming slates, says that “David knows what working with digital companies can unlock for his clients. He can speak to the current landscape for content in terms of digital opportunities versus traditional opportunities, but he also has a real sense of where the industry is going and works to get ahead of it.” Where is Freeman’s nose leading him? Original content. Erin McPherson, currently the chief content officer of Maker Studios, met him in 2010, just after he’d joined CAA and she’d taken the position of VP and head of video at Yahoo. “We started to talk -- almost immediately -- about original content,” she says. (By the way, want to buy Freeman a drink? Here’s a pro-tip, via McPherson: “One of our earliest and long interactions was at NATPE over tequila, which is a favorite drink of ours. That’s our drink. Tequila rocks.”) But it’s not just about original content -- it’s about connecting brands with that original content. Which is why last year, Freeman was key in setting up a NewFronts presentation for CAA talent and content, despite the fact that it’s usually

networks, and not talent agencies, that show up to show off during upfront season. “A big part of the growth for our business is on the advertisers’ side,” Freeman said. “And we wanted to take some time out and take advantage of the relationships we have. So [the Newfronts] were a great opportunity to show what we were doing, and remind Madison Avenue that the digital space can provide solutions for the same sort of content. And it was great for our clients to be able to network and learn how brands think.”

That attention to brand relationships makes Freeman a valuable asset to his partners: “Brands are an important player in the space, they are super involved in subsidizing this [online programming], and can be similarly involved in actually developing online content,” says McPherson. “David has that background makes him a very adept strategic partner and I really enjoy working with him. He brings that knowledge and insight to every conversation around opportunities with brands for content. When we try something ambitious, it’s important that we can bring brands on board.” “Direct partnerships with brands are how we’re going to grow our business and potentially even move upstream with securing distribution,” adds Freeman. This means going directly to the platforms -- such as an upcoming

soccer series for Xbox. It’s a detail-oriented approach, one that both McPherson and Lewis reference when asked to describe their interactions with Freeman. “He takes time to understand my strategic goals and get inside of our business,” McPherson says. “He did it with me at Yahoo, and very soon after at Maker Studios, he came in to learn as much about the company as he could. So when he is out and interacting with talent at CAA he is intimately familiar with what Maker Studios is trying to do.” “David has always been incredibly straightforward and solution-oriented in the dealmaking process,” adds Lewis. “He recognizes what it will take to get deals done in the digital space, but also offers creative and realistic solutions when roadblocks pop up.” That said, Freeman wants it known that he doesn’t operate alone. “This is by no means a one-man operation. There are a lot of people working on this. Plus, our amazing clients.” Sure. But, in the end, who do they all look to?

TheVideoInk.com Power Sixer April 2014

hen I put Ran Harnevo, president of video at AOL, on the spot and ask him to describe himself, he says: “I’m an Israeli who is living in New York, and an entrepreneur who is working in the corporate world -- so I’m bipolar by definition... and I like that.”

Harnevo made his entry into the online video game in the mid-2000s, when he partnered with Tal Simantov to launch 5min. “Metacafe was launched by Israelis,” he says. “They were the most-growing startup in Tel Aviv, which I think opened everyone’s eyes and ears to this industry very early in the game. I’m a content person by train. I was a journalist. Tal was an advertiser. And the numbers and scale were so explosive that it was clear to us that this is the industry we wanted to work in. It was almost like the internet was starting over. So we founded 5min.”

Aside from its outright cleverness, the quote reveals something else about the man who’s built AOL into one of the few online video powerhouses around today: He’s not interested in the meaningless corporate-speak that most of us have become accustomed to. We’re not getting a steady diet of words like innovative, creative, or disruptive. Ran Harnevo tells it like it is. By all accounts, though, and Harnevo will be the first one to tell you, “Ran is a zero-BS entrepreneur,” says that the original idea for 5min was Vimeo CEO Kerry Trainor, who first “wrong.” “5min in the beginning was met Harnevo when the latter was supposed to be a video platform for raising money for 5min Media, an do-it-yourself content,” he says. “We early online video startup that later looked at the internet, we looked at became Harnevo’s entry into the AOL YouTube, and we thought the DIY family. (Trainor eventually joined category was not well represented. the 5min advisory board when the So many people have skills, and we startup closed its Series A round thought there was a real opportunity with Spark Capital.) “Ran is able to in creating something like a Wikipesynthesize the macro view on our dia for video.” evolving space into hyper-pragmatic actions that build a business.” Soon after, though, 5min discovered where the real opportunity was. “We In fact, if you trace Harnevo’s career started to realize, that as big as our back to when it began, you’ll notice a own destination would eventually man who can foresee what’s next for be, we had so many competitors in the online video industry, and has the the DIY space that just didn’t have acumen to ensure he and his compa- videos,” he says. ny are ready for it.

If you’re lucky enough to find yourself in such a situation, where you have a clear advantage over your competitors, it has to be a good feeling. After all, it’s a clear indication that you’re doing something right. But I bet most of you wouldn’t consider your next move to be helping those competitors out. That’s what Harnevo and 5min did -- and built an even bigger business for themselves. “We called 25 of our competitors and offered them our content -- we closed 20 deals from those calls,” says Harnevo. “Which led us to understand that the big problem of the internet in early 2008 was not to create a vertical video destination, but to actually connect content creators with publishers at scale.” Seizing the opportunity, 5min shifted into the syndication business. Already knee-deep in DIY content, the startup soon expanded to other verticals, including news and entertainment. “We never stopped scaling,” says Harnevo, as the platform grew from 5 million uniques to 24 million in six months. “It was a real problem we tried to solve,” says Harnevo, the no-BS exec. “A lot of startups assume there’s a problem that they then try to solve, but a lot of times it’s not a real problem.”

TheVideoInk.com Power Sixer April 2014

Today, 5min’s platform is the core of the AOL On Network, which has rapidly become the premier syndication platform for professionally-made video content. The idea was and is, according to Harnevo, premised around the “fact that the internet is open and fragmented, but if you can create a platform that can help a lot of players, and not really get blocked by the effort to market your own unique proposition,

then you can create real value in the marketplace.” How’s that worked out for AOL? Since buying 5min, AOL has gone from 150 million views per month to 1.4 billion. “Our acquisition of 5min in 2010 was as much about its leader as it was the platform,” says Tim Armstrong, CEO of AOL. “Bringing in a visionary in the video space has proven to be instrumental to our growth strategy as the AOL On Network has developed the only open platform for premium content under Ran’s leadership.” “Tim decided to have my back on this space. I give him so much credit because it was so early in the game,” adds Harnevo. “He allowed us to take our startup and play in the big leagues, and not just get aggregated by them.” But Harnevo’s not done yet. A man of opportunity, there are still plenty more that he’s already chasing, from global expansion to the very future of video entertainment. “The whole pipe is being reinvented,” says Harnevo. “What we’re trying to do with AOL On is to really think about how the merged TV and online video business will look like in 5-10 years. I think Adap.tv [Ed. Note: which Harnevo was instrumental in acquiring] is an integral part of that. Beneath content and distribution, you need a strong monetization platform. I look at AOL as tech, distribu-

TheVideoInk.com Power Sixer April 2014

tion, content, and monetization coming together.” “We are trying to connect ecosystems where others are trying to prove why theirs is better.” If that reminds you of AOL’s commentary surrounding the launch of One by AOL, then you can sense just how important Harnevo has been to AOL’s rise in online video. “Ran was in the Israeli air force. And he’s used some of that same skill set -- acute vision, calm-under-pressure, and steady trigger finger -- to turn AOL On into a digital video juggernaut,” says Roy Sekoff, founder and president of HuffPost Live. “It’s been both enlightening and a lot of fun working shoulder-to-shoulder with him over the past three years trying to help figure out what, in the future, people will watch and how they’ll watch it.” In other words, if Ran Harnevo has something to say, maybe you should listen.

TheVideoInk.com Power Sixer April 2014

he overriding theme of Defy Media chief executive officer Matt Diamond’s career? Focus. This Power Sixer has, thanks to a combination of acquisitions and mergers, accumulated a digital media empire that’s evolved to become a major player in the space. Diamond initially broke on to the scene 17 years ago, when he started Alloy, Inc., the company behind major media properties including “Gossip Girl” and “The Vampire Diaries.” Founded in 1996, with Alloy Digital going public in 1999, Alloy successfully survived the 2000 burst of the tech bubble. His interest in delving into the world of media was driven by a desire to connect with consumers on a national level. “You can count on one hand the number of national brands created in one year, touching tens of millions of people,” says Diamond. “And media and retail are the only ones who can create these national brands.” Last fall, though, Diamond traded one brand with another when Alloy merged with Break to become Defy Media. With other properties including Smosh, Defy Media now encompasses a wide swath of the web video world. And as lead by Diamond, the company has built a reputation for targeting a young audience with recognizable brands.

TheVideoInk.com Power Sixer April 2014

Keith Richman, who was CEO of Break Media before the merger with Alloy and now speaks with Diamond “at least 10 times a day,” says that Diamond has “helped drive consolidation — that’s really important, it’s why we’re here today. He’s focused on the right way to build the company, which puts us in the position where [Defy] can run a profitable business on a large scale.” “He comes up with acquisition strategies that make one plus one equal three,” adds Michael Kassan, CEO of MediaLink, which consults with Defy on media strategy. “He has a solid GE background, coupled with an understanding of the nuances of the content space.” A key element to Diamond’s strategy is an intense targeting of a highly sought-after audience: 13- to 34-yearolds — a demographic that he has been focused on since the early days of Alloy. “We’ve been 13 to 34 forever, and have no desire to change,” he says. But then how do you keep up with that age group, given how fast trends can change? “The beauty of this demographic is that they’ll tell you,” Diamond says. “You create an infrastructure where you can respond to that — because the moment the DNA shifts to believing that ‘I know what they’re going to do,’ you’ve crossed a line.” The merger between Alloy and Break is also interest-

ing on another demographic level, for while Alloy’s success stories are largely aimed at young women, Break tends to serve a more male-skewing crowd. But Diamond doesn’t see any conf lict in that. “There’s a lot of crossover — some of our top male brands get as much as 40% female viewers. More importantly, we think it’s important to target both male and female audiences,” he says. “He’s one of the strongest executives in the space — a solid business-person who understands the intersection of content and brands at the highest level,” Kassan says. “Every meeting I have with Matt I come away learning something — he brings a very unique perspective to the table.” Richman also cited Diamond’s abilities as a company leader: “It’s really easy for execs in any industry to react to others rather than their strengths. Matt’s great at not letting what happens today impacting something in the long term. He doesn’t feel the need to react.” One example of this is Defy’s emphasis on owning and operating its own brands, which Richman set up in contrast to the current trend for companies in the digital space moving toward a multi-channel network model — where the business largely revolves around aggregation of other people’s content and audiences. “We’re more focused on building our core brands,” says Richman. And with that comes an attention to what currently works and doesn’t work for the company. When asked what recent business deal he was most proud of, Diamond had an unexpected pick:

The decision to sell off Alloy Entertainment, a subsidiary of Alloy, Inc., to Warner Bros in 2011. The reason? Those properties, including “Vampire Diaries,” “Pretty Little Liars,” and the book publishing business from which those shows were born, no longer fit into the company’s digital strategy. “We were great at creating content [including “Liars” and “Diaries”], and distributing it through a third party, because there was only one way to get it out there nationally,” Diamond says. “That all changed in the late 2000s, when we were able to become a distributor platform and could go into the home directly. We’re creating all our own content now — all digitally. Every-

thing being incubated digital-first is a big move for us.” But on top of that, he’s also noted for having a strong sensibility for content. “Matt’s not the guy in the room writing the script — but he can recognize talent,” Richman adds. Plus, “he’s a really strong deal-maker — he can spot a strategic partner and make that deal work.” This combination of skills makes Diamond not just a mogul who’s brought key digital brands together for a powerhouse media empire, but in general a standout in the industry. Plus, he’s well-liked. “I always laugh when I’m with Matt — if you met him, he comes across as a financial guy, but he’s actually really funny,” says Kassan. But the best way to understand him may be through one of his hobbies: Running. While according to Richman, most of the Defy Media executive team are dedicated runners, Diamond’s the one who’s going 6:20 a mile. “I consider myself reasonably disciplined — I get up and run or something every day. But I never met anyone who wakes up a little earlier and runs a little faster,” Richmond says. Because when you’re as focused as Matt Diamond, everyone else is just playing catch-up.

TheVideoInk.com Power Sixer April 2014

by traditional-media heavyweights DreamWorks Animation and Disney, respectively. It was under her watch and guidance that these companies found their industry-shaking successes, Which is why, when I sit down to talk with Dana Settle about her impact on the world of digital video, I can’t help but address the topic of belief. For the layperson, it must seem like an incredible leap to take when you’re standing on the ground floor of a company/medium that isn’t yet established, committing years and capital to such an endeavor. Yet, this is the cornerstone of Settle’s work, and when I ask her what she needs to see in a company to invest, her answer exposes an individual whose success has been achieved as much with her heart as with her intellect.

s one of the founding partners of Greycroft Partners, Dana Settle knows a thing or two about making a good bet.

Along with fellow founders Alan Patricof and Ian Sigalow, Settle and the team behind Greycroft have already made a significant impact in the world of online video. Just look at who the firm has invested in -- from content giants such as Maker Studios and AwesomenessTV, to technology companies like Fanhattan, Wochit, and Vidible -- all of which are revolutionizing the way businesses and consumers interact with video content. It’s been Settle’s acute awareness of the emerging medium that has put her investments in the position to succeed, and succeed remarkably -- most famously with the acquisitions of AwesomenessTV and Maker Studios

TheVideoInk.com Power Sixer April 2014

“I tend to be a big believer in investing in great people and great entrepreneurs,” Settle says. “Companies morph and change their strategies, and great entrepreneurs are able to identify quickly when changes are occurring on the market. Really, if you back great entrepreneurs and don’t fold when things don’t necessarily go perfectly, that’s key. Of course, you have to believe there are great market possibilities and the inventor or entrepreneur has some sort of differentiation over the long term, but it’s still about backing great people.” Settle, whose involvement with the digital video world dates back to her work on business development with Truveo (later sold to AOL), proves

that a commitment to the individual can be as significant as the belief in his or her idea. In fact, according to her Greycroft colleague, Mark Terbeek, it’s Settle’s commitment to the personal that places her in such high esteem among her colleagues and contemporaries. “At the end of the day, Dana is incredibly well-networked,” says Teerbek. “Executives, heads of large studios, every kind of entrepreneur in town, Dana is always on the shortlist of people they call to consult. Even if it’s not necessarily an opportunity for Greycroft to invest, they want her advice. They know she has broad contacts and they know she’ll be straight with them, and I think that’s a consistent characteristic of Dana’s. She’s almost always the first person people reach out to, which in our business means the world. It’s a hallmark of Dana’s personality and Greycroft’s personality as a result.” Of course, entrepreneurs don’t just seek Settle’s advice due to her knowledge of what they do, but also because she has an incredible foresight and belief in the consumers they serve. In this continued discussion of what one needs to see to believe in an investment, it’s Settle’s understanding of the relationship between content and consumer that is one of

her greatest tools in steering a ship to success. “It has to be great content, and it has to be different in the eye of the beholder,” she says. “But not only does it have to be great content that connects with an audience, but also how that content is distributed and how that content is discovered.”

Using Maker Studios as an example, Settle illustrates exactly how she’s focused on these issues as the entertainment landscape shifts. “In terms of Maker, we looked at a lot of the first-generation video companies, of which there are still a few, and they all had to essentially create the content, pay for the distribution, and then drive the audiences to them. It seemed very difficult to make the economics work,” she says. “That’s when we saw the rise of YouTube as a mass platform. That’s when we decided the time was right to start to invest in video.” “That was really the time we decided to invest in Maker,” she continues. “Anytime there’s a community of people or a company that’s early to a platform, like the founders of Maker and YouTube, they’re going to know how to do things on the platform.

How to exploit little blips. If they keep up the momentum from the beginning, others won’t be able to catch them. I saw that in the early days of Maker, and that’s what got me excited...that opportunity to build technology out of the network and build the next-generation studio.” Settle is notably enthusiastic when discussing this world that she has had a hand in creating, and I can’t really blame her. By combining a firm knowledge of business, drive, and, yes…belief…Dana Settle and her partners at Greycroft have helped contribute to the rise of a new frontier of media that is all the more accessible to consumers at home. In closing, Dana tells me that, looking to the future, we can expect that gap to continue to grow smaller, and that the personal connections will be the most significant investments of them all. “I think networks of any kind, whether traditional or digital, as they start to achieve scale can do really great things for the creators and the consumer. It’s helping consumers discover content in a world of ever-increasing options. It creates this great world where there’s something for everyone. As a network gets to scale, it can really connect the consumer to the right creator.”

TheVideoInk.com Power Sixer April 2014

y his own words, “the best in entertainment are those that take the biggest risks,” and at age 62, Peter Chernin has been attributed with not only ideating one of the biggest risks (as it was seen at the time) for the television industry but shepherding it to success. And while Chernin himself is quick to credit Jason Kilar, Hulu’s former CEO, with much of the business’ growth, “anyone associated with Hulu in the first 2.5 years -- and probably a year or two before and a year or two after -- would have to tell you that that thing does not happen without [Chernin],” according to Jon Cody, who served on the team reporting to Chernin between 2005 and 2008 and as the launch general manager of Hulu. Hulu would mark just the beginning of Peter Chernin’s impact on the “fourth generation of television,” though. The man has succeeded that bet with a series of strategic investments in digital media companies like Fullscreen, Crunchyroll, Scopely, MiTú, and Base 79. A Piracy Question Answered and a Race Against VOD Study the evolution of the entertainment business and it’s not difficult to recognize that, while the “platforms” may change, history certainly repeats itself. It’s those who have the foresight to innovate in anticipation of that change who create the most impact on an industry -- and as marked visionaries 22

do, Peter Chernin had a hawkeye’s view of the future of television on the internet. Following his time at Showtime as EVP of programming and after 15 years serving as the president and chief operating officer of News Corp, Peter Chernin had become intimately acquainted with how aggregation and syndication models had disrupted the early entertainment business. And he’d clearly identified two internet-driven forces that had the potential to seriously shake Hollywood to the core.

Not only did the internet enable piracy and accessibility to content anytime, anywhere, and most importantly, for free, but the inevitability that television was moving online was soon to be a reality. And in search of an answer, Chernin’s vision of the internet and digital distribution began to take shape. “I didn’t want to see a replication of HBO where a third party had built a dominant business on the back of a studio’s content,” Chernin said in a previous interview. “What we needed was a site

TheVideoInk.com Power Sixer April 2014

that aggregated as much television content as possible. Second thing I felt was all these things would be pirated if we didn’t come up with a legitimate way to get those products.” The answer, the disrupter, the model of the future: Hulu (though it would not be named until 2007 when it launched into private beta). And so began Chernin’s personal mission of turning television’s fear of change into an opportunistic battle to beat piracy, monetize higher than personal video recorders, and to ensure that the IPTV generation had more than one distributor next to YouTube, which had just been acquired by Google. On one side were the networks, clawing to keep old systems alive; on the other, a power executive navigating the thick political waters of Hollywood to innovate around business models that were starting to tremor. “Your job is to maximize your business but your real job is to grow new businesses faster than the old ones decay.” “Probably most of the people who worked for me at Fox hated Hulu

and didn’t like the idea,” said Chernin. And that was just the first of Chernin’s hurdles. After getting his own team on board, Chernin was tasked with getting Hollywood on board, one network at a time. With Fox, NBC and Disney-ABC locked in as partners, Hulu opened in private beta in the US in early fall 2007 with f lagship television titles like “The Office,” “The Simpsons,” “Heroes,” “Arrested Development,” “Miami Vice,” and “Buffy the Vampire Slayer,” a limited offering of feature films like “Conan the Barbarian,” “Sideways,” and “The Blues Brothers.” Additional distribution support came from AOL, MSN, Facebook, Comcast, Myspace, and Yahoo, where they also made premium TV and film titles available for a time being. Hulu rapidly found footing on the internet, scaling its library and reach -- proving the model, proving the appetite. “I don’t think Hulu happened today without Peter Chernin. He’s a very savvy executive. He has a very good way of turning no’s into yes’s,” adds Cody. By 2009, the value of a Hulu viewer was roughly 20-30% that of a television viewer with a potential to monetize higher than video on demand, as stated by Chernin in a previous interview. Today, numerous industry executives indicate that potential has been realized, given that viewers can’t fast-forward through Hulu ads like they can with most VOD and recorded content. What’s more, Hulu boasts of having the highest engagement among all ad-supported online video providers. In fact, in Q4 2013, visitors averaged 50 minutes per session, which included watching ads.

Aside from this f lagship innovation that has helped move television into the digital age in a big way, Chernin has also been a marquee investor in companies bucking the original digital video wave. Expanding the Vision, Funding the Fourth Gen – The Chernin Group “I once asked Peter which side of entertainment he prefers more: the business or creative? He immediately replied by saying that it’s all creative,” says George Strompolos, founder and CEO of Fullscreen, one of The Chernin Group’s 2013 investments. Peter is the kind of unique leader who celebrates creativity (shaped in part by his time at Berkeley where he was an english lit major) and excels in inspiring creativity from within corporate systems. Just consider his investments in the emerging media space.

These companies aren’t your normal content companies -- nor are they an upgrade to a stagnant industry, as Hulu was and is with television. The MCNs are the emblems of a content shift that is happening. You’ve heard this before: People, especially kids, no longer watch video the way everyone used to. There are new ways to find content, new types of content to find, and new creators who don’t need a leading role on a broadcast or cable network to garner a massive fanbase. The MCNs sit at the center of this, and as evidenced by Chernin’s multiple investments in the space, it’s clear the man foresees a valuable commodity coming out of this ecosystem. Considering his towering impact on the entertainment industry to date, it’s a pretty safe bet that Peter Chernin’s impact on the Fourth Generation of Television is imminent.

Aside from being an early player in the startup tech scene, sitting on the board for both Twitter and Pandora, Chernin, through TCG, has invested in companies like Flipboard and Tumblr, which have been revolutionizing the way content is distributed and consumed across an increasing number of devices and platforms. And over the last couple years, The Chernin Group has deepened its footing in the online video game, funding MCNs like MiTú, Base79, and Fullscreen, which raised a TCG-led Series A reportedly in the $30M range.

TheVideoInk.com Power Sixer April 2014

Erin McPherson, Chief Content Officer, Maker Studios: Online content will not “overtake” traditional content as much as the two categories will merge into one. Right now, online is proving to be additive to television, since data tells us consumers are watching more television AND more online video than ever. Eventually, we won’t refer to “online” and “traditional” content but rather, content will be simply storytelling delivered over a number of platforms and devices and in any number of formats to best serve both the story and the consumer.. In the next few years, we will continue to see consolidation in the online video space as online producers and distributors seek to create more scale and leverage resources by partnering or merging, as well as from major media players, who will partner or acquire in an effort to accelerate their positions in digital and enhance their connection to consumers.

Dana Settle, Founding Partner, Greycroft: “I think all forms of content, whether it’s art, music, video, etc, will all be available to discover online in open market places. As there are ever increasing amounts of these media forms, there has to be logical curation layers that evolve on top of them. That’s where we’re heading. First you have to get the scale and get consumers comfortable using these platforms, and then the next iteration is really going to be around helping people discover the right kinds of content for the individual. That’s where I think things are going, because it’s the next logical step. They’re already there, so how do you make sure they connect with what they’re interested in?”

TheVideoInk.com Power Sixer April 2014

Matt Diamond, Chief Executive Officer, Defy Media: “I’d predict the legitimacy of short-form video (less than 22 minutes) as a market for the advertiser. Creators are already doing it. What people found since YouTube exploded is that people like a three or seven minute scripted video.”

David Freeman, Co-Head of Brand Coverage and Digital Content Groups, CAA: “I believe more multi-channel networks will get acquired by major tradi-

tional media and entertainment companies, similar to the Maker/ Disney deal. This will immediately capture the young mobile-centric audience and drive their engagement on existing IP, in addition to nurturing emerging talent and incubating new properties.

Advertisers will begin to create content franchises and entertainment properties with top creators to broaden their existing audiences and attract new ones.”

Ran Harnevo, President of Video, AOL: “What I’m most fascinated by is the future of connected TVs. The big turning point in the mobile industry was the move to smartphones and the consolidation of operating systems… I think the same thing is about to happen with TV. I think ‘smart TVs’ will allow entrepreneurs to take over the big screen. Content providers will be able to launch their own apps on the big screen without needing a long business development cycle. I think that’s going to be the next transformative moment for everyone from creators to distributors and advertisers. It’s the most exciting thing since YouTube was launched.”

TheVideoInk.com Power Sixer April 2014

Disney Bets on Maker Studios for $500 Million (Maybe More) Danny Zappin’s attempt to prevent, or at least stall, Disney’s acquisition of Maker Studios has come and gone in vain. In fact, it also appears Relativity Media’s attempt to outbid Disney for Maker Studios was all for nothing.

It’s official and it’s the biggest bet on a YouTube business to date. Maker Studios, the YouTube MCN that consists of 55,000 channels reaching 380 million subscribers and 5.5 billion monthly views, has been acquired by Disney for $500 million, with a performance-based earn-out that could drive up the ultimate price to $950 million (“if the strong performance targets are met,” says Disney in the announcement).

Acquisitions Comcast Buys FreeWheel for $360 Million AwesomenessTV Buys Big Frame for $15 Million The Young Turks Network Raises $4 Million German Broadcaster ProSiebenSat.1 Buys into Collective Digital Studio acquired a 20% stake Machinima Finalizes Warner Bros $18 million

Dreamworks Eyes Stake in Vevo

TheVideoInk.com Power Sixer April 2014

Relativity Media Places a Bid on Maker Studios It seems everyone wants Maker Studios these days. Relativity Media, the studio behind films such as “The Social Network” and “Immortals,” has made a bid to buy the YouTube multi-channel giant — a few weeks after Disney came in with an acquisition offer and a few days before Maker’s shareholders were scheduled vote on the offer.

“If you’re a YouTube creator, you know that a like, comment, annotation, or embed from the right inf luencer, collaborator or publisher can have a huge impact on your views and subscribers,”--Jen Robinson, Big Frame

“For me, the best thing about VidCon is the emotional connection between the creators and the audience. It’s so big.”--Jim Louderback, Revision3

“What I’m excited about is that digital media can allow you to more cost-effectively experiment with concepts and experiments.”--Kiliaen Van Rensselaer, Fox

TheVideoInk.com Power Sixer April 2014

Play list Live and The VaLu e of Mee ting in Meatspa ce new friends, the event becomes far more important to the individual. It becomes a true, personal experience.”

ttending a conference is an investment: It requires time off from work, travel expenses, a hotel room, overpriced conference center food, and a sick day or two when you get home (so that you can recover from the conference). But for those who attend Playlist Live, Vidcon, and other events, it’s an investment that can pay out big down the line.

“For many of our attendees, Playlist Live is the first large-scale entertainment event they’ve been to,” Playlist Live founder Jared Mendelewicz said via email. “When you mix in community engagement activities such as meet-and-greets, and meeting 28

TheVideoInk.com Power Sixer April 2014

And it can also lead to unexpected benefits. Just one example — director Dan Dobi has attended both Playlist Live and Vidcon over the years (plus YouStar Live in Poland), and has found that the conference experience had multiple benefits. “It really puts a face to a name,” he said via phone. “Especially since some people are really hard to get ahold of. And the people you can get one-on-one with means a more personal experience.” “We always say that you get out of Playlist Live what you put into Playlist Live,” said Mendelewicz. “If you’re looking to meet-andgreet with as many creators as you

physically can, we want you to accomplish that.” What’s key to making a conference like Playlist Live work for you? Showing up with something to actually talk about. “Going to a conference with a specific project to promote is ESSENTIAL,” Dobi said. “If you have something to plug and promote, it’s absolutely worth it.” Because it’s also a place where new talent can be discovered. “Playlist Live has always been known for bringing out up-and-comers to appear and perform that often wouldn’t get the opportunity at an event this size. Did you know that Austin Mahone’s first live performance was our first Playlist Live in 2011? Now he’s an unstoppable pop music sensation,” Mendelewicz said. Not only do conferences offer valuable networking experiences for Dobi, but they directly led to him enlisting several YouTubers, including Grace Helbig, to appear in his 2013 documentary “Please Subscribe,” which actually premiered at last year’s Playlist Live.

Because what’s also key is taking the opportunity to expand your circles. “It’s about meeting new people — the mini-networks within smaller groups,” Dobi said. “It’s good to meet new people and find out what they do, because that’s how communities grow.” Jim Louderback, GM of Discovery Digital Networks, remembered his first meeting with Phil DeFranco, which took place at SXSW one year; DeFranco was trying to attend a live “Diggnation” taping (a one-time annual tradition at SXSW) with a mutual acquaintance of Louderback, who asked for his help in getting into the show. “I met Phil and loved him,” Louderback said in a phone interview — which eventually led to DeFranco joining Revision3 as a programming executive, following the company’s acquisition of his YouTube properties. If you really want to meet somebody speaking on a panel, Louderback recommended arriving early: “Lots of times, speakers are just hanging out beforehand,” he said. “Be up to talk to anybody — don’t isolate yourself in a corner,” he added. “Everybody’s pretty friendly, usually.” TheVideoInk.com Power Sixer April 2014