Monday, June 9, 2014
How Jukin Media Is Turning Viral Video Into A Real Business
Story by Benjamin F. Kuo
Viral videos are great -- attracting millions and millions of views, and spreading far and wide--but how do you monetize those viral videos? And, even more, how do you manage to jump on the viral video train, and keep those viral hits coming again and again? Los Angeles-based Jukin Media (www.jukinmedia.com) thinks it has figured that out, and instead of trying to create viral videos, has been buying up the rights to those videos--before they really go viral--to create not just a one-hit, viral video wonder, but a sustainable business. We caught up with Lee Essner, the President and Chief Operating Officer of Jukin Media, to learn more about how the company thinks it has figured out how to make a business around viral videos.
What is Jukin Media?
Lee Essner: Jukin Media starts with the assumption that you can take any video viral. We have a team of people and technology which scours the Internet, and looks for videos we like and think would be a perfect fit for our YouTube channels. We then acquire those videos directly from content owners. We then help push those videos through social media channels, and help them go viral. We also publish them on our YouTube channel, and take videos acquired for our library and string them into compilations, which we also publish into channels that make sense, such as Kids and Pets, FailArmy, our extreme sports channel, or Jukin Video, which is our general interest and trending video channel.
Collectively, we now have a billion and a half viewed minutes per month, and we have nearly six million subscribers to our channels, and 450 million views a month. If you look at the numbers from ComScore, we are doing about half the number of uniques that other large MCNs are doing, but we're doing it with only five channels, versus their 50,000 channels. Those are owned channels, which we own, so we've got some great scale there. We're taking that content, and publishing it on our licensing platform, which is much like a Getty Images for video. That's where the traditional media companies--the morning shows, the news and clips shows, the ad agencies--can see what is viral and trending, and can license it directly from us. When you see a video on the Today Show, or on Anderson Cooper on CNN, or MTV, there's a very good chance that video was licensed from us.
Can you talk about those businesses?
The nice thing about those two businesses, is they feed each other nicely. When the Today Show puts up one of our videos, that drives our YouTube views up. When our YouTube views are driven up, that drives more licensing demand for the video, with other shows then getting interested. These are videos that we find with a thousand or maybe even ten thousand views, and we drive them to one million, ten million, or even twenty million views. A good example of that is Hero Cat, which blew up in two days to millions and millions of views.
The third piece of our business, is we've developed an infrastructure which includes technology, and methodology to discover content, and put it into our own, Salesforce like system, which allows our researchers to pick out videos, track down the content creators, and do all of the contracting through the system. So, you can buy that video through the system, track payments, and invoices, all through our own internal CRM. We can bring in a clip, cleared in about eight hours. That's relevant, because of our third piece, where we have been hired by traditional media companies, to basically provide them a turnkey, outsourced content acquisition team. We did a deal with Ryan Seacrest recently for a show which aired recently on Nickelodeon, and also did a deal with MTV for the show Ain't That America with Lil Duval. We find the content they want, and we use our technology and people to service the show. It's taken the time it takes to acquire content and clear it from two days to two weeks, to eight hours on average.
Finally, since we have these brands blowing up on YouTube, we now have content and original programming. We're developing programming around our brands, such as FailArmy, and we also have a deal with Dick Clark Productions to take FailArmy to the international market. Because we own the library, we're able to put those into ten or twenty different formats. We have 25 ideas on ways to publish or package that content, and put it into clip shows on television or other formats.
Is there a lot of competition for the rights to all of that content?
Lee Essner: That's one of the competitive edges we have. It comes back to the technology we've built, and the team we've built. Our founder came out of the clip show world, and became a producer not doing the old school thing of sitting by the mail and waiting for submissions to come in by tape. Instead, he started by looking on YouTube to find video content. We've taken his methodology, and built a business, people, and technology around that methodology.
How do you decide what content you will license?
Lee Essner: There are three reasons we'll go after content. One of those, is content we know from our licensing customers is the kind of content they are interested in. Another reason, is that we're seeing analytics at a very early stage that show this content could go viral, or has elements that might be able to go viral. We also are now getting hundreds of submissions a day, where we're just buying that content directly, which haven't been posted on YouTube at all, and we've gotten the fresh, first look at the content. In some cases there is competition, and there are other people trying to acquire a video. However, most of those people are buying content only for YouTube monetization, because they're going to put it on their channel on YouTube, or maybe their website platform. However, it turns out that offline licensing of content is a huge, huge opportunity for content creators interested in doing revenue share. Those licensing fees can be pretty amazing. Those are some of the reasons that the competition has not been able to keep up with us, and hasn't been able to acquire that content and that quality of content. It's much more about quality, than quantity. We could be acquiring five to ten times the content we are bringing in, but we're focused on stuff we know we can monetize right away, through licensing, YouTube, or rights management on YouTube. One thing we did, is we became an MCN like Fullscreen and Maker, but, unlike those companies, we're not rolling up other channels. Instead, we became an MCN to manage our own channels, and because so many viral videos get shared and copied, so we can use the YouTube CMS to manage rights around those videos. That's pretty important, on an economic basis.
How did this go from content on a channel to a company?
Lee Essner: It actually started as an off-YouTube business. It really started, because Jon is a clip show producer, and realized that the value was in the ownership of the IP. He had already started to buy the content, and license it off-YouTube, using traditional media licensing. We started thinking, there is an audience for this on YouTube, and we started to program for YouTube, and the audience kept on coming. Those two pieces helped feed each other. Finally, the third piece came about because we had already built a basic CRM for ourselves, to efficiently bring in that content and turn it into something we could leverage, and people then wanted us to do that for them. That's how the third business came about, really recognizing that brands need help on YouTube, and were licensing content for clip shows. That's how each of those pieces evolved.
How did you get involved with the company?
Lee Essner: I was at Idealab as an entrepreneur in residence and met Jon. I began as an advisor, and then started spending a week, then two, then three. Soon, there was so much to do, it became a full time gig. I took the presidency about four months ago, and have been working for the last year working pretty aggressively on building the company from what was here a year ago when it was twelve people, a library of content, and methodology for finding that content. I've now been able to help them understand where the business is, and help structure departments, and make it more into a company where we could identify who was working on what, structure things around departments, and optimize the process. I also brought in a CTO, and brought in a head of product, who is helping to put together our own internal CRM, so that we can be more effective and efficient at discovering viral content before it becomes viral. We're also building out our licensing platform, which we think of as the Getty Images of video. We're now working on version two of that, which will eventually be a place to host other people's content as well. My role has been around the product, and team building, and organization.
What's the biggest thing you have learned about this business so far from this experience?
Lee Essner: That's a great question. I think that one of the most important things I've recognized, is the value of the intellectual property is critical. Once you own that, you can do so many things with it. So far, we've resisted rolling up other channels, and want to stay focused on the core of the company, and we're going to town building great IP, and building out our library. We'll do publishing on YouTube, licensing, turnkey acquisition deals, and also do original programming. All of those revolve around the central thesis that you have to own your own IP. I didn't realize that before, on how important that is.
What's next on your list of things to do?
Lee Essner: There's an incredibly long list of things to do. From a team perspective, it's building out parts of the organization here which need help. On the product side, we're considering a build out of our next generation licensing, and also working on our next generation CRM and owned and operated sites. We just did a deal with Maker, where they will be launching a FailArmy site shortly, and we'll be doing some original programming and effectively selling that on our YouTube and off-YouTube properties. Basically, we're deploying the capital we raised in the smartest way possible, with a lot of it around business development and partnerships. We have a lot of people proposing lots of great ideas, and we're now curating those to find the biggest and best opportunities for the company, and moving forward.
Of all the videos you've licensed, which one sticks most in your mind?
Lee Essner: My absolute favorite is the most recent one, the Hero Cat, the cat that saved the little boy from being attacked by a dog. The dog comes up and pulls the kid off his bike, and the cat throws itself at the dog, and chased the dog away. Then, it stops in its tracks, U-turns, and goes back to check on the little boy. It's an incredible, incredible video, and just highlights the power of caught on film, never-been-seen-moments that would have been lost if there was not a camera there. That was an incredible video, and it went viral very fast, and there have been some great memes that have also followed from it. It's an awesome, awesome video, and I love that cat.