The Business of YouTube: An Interview with Roberto Blake

by | Mar 8, 2017 | EduSocial Blog, Strategy, Tools | 0 comments

When YouTube’s biggest star gets dropped by not one, but two, major affiliates, social media strategists around the world are wondering what this means for us – our brands, our videos, and the freedom we’re afforded on social media platforms.

In case you missed, the short version of the story is this:

  • On Tuesday, February 14th, Disney and YouTube severed ties with Felix Kjelberg (known to his fans as PewDiePie) after the Wall Street Journal reported he had posted nine anti-Semitic videos since August.
  • Kjelberg responded with an apology, an explanation (the posts were meant to highlight the absurdity of websites like Fiverr, through which you can pay people $5 to do almost anything), and a claim that the Wall Street Journal has taken his work out of context.
  • PewDiePie fans, YouTubers, social media strategists, and…the rest of the world are split on their feelings. Did the Wall Street Journal unfairly target PewDiePie? Are Kjelberg’s intentions meaningless because – finally – he went too far?

As social media strategists, we work across all platforms, but video is undeniably on the rise. We here at the National Institute for Social Media wanted to find out what the experts thought about PewDiePie’s situation and how it would affect the wider social media community. We reached out to multiple experts – each with different areas of expertise, opinions, and ideas – in an attempt to understand how this incident may affect our work. We started by talking to none other than the awesome Roberto Blake.

Why Roberto Blake?

On February 15th, Blake released his response to Disney and YouTube’s decision on his YouTube channel, blogged about the controversy, and has been contributing to conversations across all platforms.

The essence of his message is what interested us the most. Like everyone, he has shared his personal opinion. But he’s also provided tremendous insight into how this incident affects the business of YouTube – a topic we know our strategists are interested in.

The Basics: What do you think about PewDiePie’s situation?

My perspective and my opinion is an unpopular one, and maybe it should be, but my first instinct was that the versions of the story didn’t matter to me. My first instinct emotionally was, ‘I feel so bad for Felix right now.’

But my second instinct was that this was going to blow back on so many people in the YouTube community, and businesses, and not everyone is going to realize the impact until later, and they’re still going to feel those echoes later whether they realize it or not. I worked in corporate America. I was a mid-level marketing manager before, the creative side, I’ve worked at an ad agency before. I’m a business owner and entrepreneur. I have clients. I have spoken with people that influence for marketing. I’ve done brand deals and I’ve helped other creators negotiate their brand deals. I’ve recommended people to brands to use for sponsorships before. So when you look at all those pieces of the puzzle instead of being just a casual YouTube watcher, or being a PewDiePie fanboy, when you look at it from that perspective, the version of the story becomes irrelevant. I know a lot of people immediately are disgusted by me saying that because the truth should matter, but truth and reality are very different things, and for many people perception is reality.

My comments section is filled with people who say, ‘That’s sell-out talk,’ and that’s, ‘crony corporate capitalist talk.’ That’s you giving mainstream media a pass and you buying into the ‘PC culture’. Those are the arguments and comments that I’m seeing that aren’t focusing on the fact that the Wall Street Journal essentially slandered him and wrote a hit piece. If it was something a lawyer felt was slander, and I’ve seen lawyers weigh in on this on social media, then believe me there would be much more commentary on that, there would be much more, ‘Oh this is going to be a big lawsuit,’ and YouTube itself would’ve responded differently, and I’m pretty sure Disney and Maker Studios, given their vast legal teams and resources.

I think the first thing people have to do when they’re talking about this is eliminate the word ‘blame’ from their vocabulary and replace it with the word ‘consequences’. I think that’s the first thing, and I think there are consequences all around. So let’s talk about first the consequences for Felix in this and what happens. One of the major consequences in this, that I think most people don’t understand, and I’ll have to make a video that’s not specific about PewDiePie and Felix for this video that I’m going to do called, ‘What is Google Preferred?’ because that’s a situation that most people don’t understand the gravity of.

What can you tell YouTubers and social media strategists about Google Preferred – just one example of revenue affected by this incident with PewDiePie?

To get to that top 1% you also have to buy ads against the top 5%, which is why you can’t exclusively buy out PewDiePie’s channel, because of how much you’d have to spend on channels that aren’t that, to get at that, if you take my meaning. It also, however, is not only for the biggest content creators, but also encourages and gives advance media buys for content and creators on the rise, or, content that you want to niche down on. Meaning that maybe you don’t want specifically to get the biggest tech YouTuber because that’s really expensive, but you want the YouTubers who have done the most views talking about laptops, and have ‘X’ amount of potential subscribers, well this premium ad tier could mean that if you’re buying in as an advertiser you could get more distribution opportunities against those channels. So in the auction, because again, most people don’t know in how the Google Ad network in general works. You go to a website and sometimes there’s banner ad ‘A’, and sometimes there’s banner ad ‘B’ or ‘C’. That’s called inventory, that’s called placement, and it’s also level of distribution, and that’s competitive. It’s based on an auction just like E-Bay, alright. So that’s a little complicated and again, I’ll have to make a whole video explaining all this, but what it means is that, if you are a YouTuber that is in Google Preferred, more ads show up on your videos, which means more money. More ads from the highest paying advertisers show up on your YouTube channel. It also means that unlike most YouTubers who maybe get 30% of their views have ads on them, maybe you get closer to 40, 50, 60%, or 80% of your views having ads on them all the time, from the people who pay the most money for ads. Which means this could be not just double revenue, it could be exponentially more revenue for you if you’re in this premium advertising tier. Being in this premium advertiser tier means that you’re either getting massive views or your channel is considered to be very advertiser friendly. Advertiser friendly could mean family friendly, but it could also mean that you get the views and have the right traction, or your content is considered safe enough, but obviously a certain amount of views and engagement can overrule all that, and it can just be that. So again, getting in and what qualifies you is vague. What we know is that Felix is no longer on that list. So, when you take what I just said into context, that’s a lot of consequences. That’s a lot of money that could be walking away. Now, again, for scale, he makes so much money that it’s not as if he’s going to go homeless or anything, it’s not as if he’s not going to be able to pay his bills, but it is very significant. It also means that he’s not going to be in the exclusive catalog that they directly market to brands, anymore, even though he’s the biggest one. This also affects YouTube and Google as a parent company though because by not having the biggest YouTuber in this program it immediately impacts their revenue because YouTube splits its revenue with its creators, which means those parties lost on that. That’s just the Google Preferred. That’s just one consequence. One punch. That’s just one.

How will this affect YouTube Red?

This impacts both Felix and Youtube/Google because as you know Youtube Red is a subscription service that YouTube has where you pay $9.99 a month, you get some exclusive content but you also get to watch videos with advertising on it. Well, when this happens, here’s the other thing: YouTube Red’s overall subscription base, that revenue is split between -all- YouTube creators, based on how much watch time their channel has. I make maybe $80-$120 extra, not a lot, not even a fraction of my revenue, but still, it’s nice, buys a couple steaks and beers, from YouTube Red earnings from that collective pool. A lot of people subscribed to YouTube Red specifically because they wanted to watch ‘Scare PewDiePie’. With them leaving, because that’s not available and season 2 has been cancelled, or because they want to #standwithfelix #standwithPewDiePie. Their #boycottyoutubered, that hurts all content creators. One of the criticisms that I get from PewDiePie fans in my comments on this video and on my commentary is, ‘This will not affect all YouTubers. This does not impact and hurt all YouTubers. Everything’s going to be fine, you’re blowing it out of proportion.’ If people are boycotting and abandoning YouTube Red this affects a lot of YouTubers big and small. Everyone loses an extra 5, 10, 50 100, 500 bucks a month as YouTube Red subscriptions leave because of this, and on top of that YouTube loses all of the money that they sunk into producing season 1 of ‘Scare PewdiePie’ and season 2, which was already in production and already in development. Which means any money they sunk into the production of a YouTube show. Any money they sunk into promoting season 2 of ‘Scare PewDiePie’, which they would, because he’s the biggest YouTuber on the platform. All of that money is down the drain now. All of that money is forfeit, and all the YouTube Red subscriptions driven in by PewDiePie are forfeit. All the PewDiePie supporters who are pushing for a boycott on YouTube Red, those revenues are gone. So YouTube, in making what they felt they had to from a brand protection standpoint, long-term, not normalizing or legitimizing certain things in the eyes of people that they have fiduciary responsibility to. Whether that’s shareholders, or business partners, or themselves. On principle, whether you agree with their principles or not, they’re losing money. When someone decides to lose money to be principled, on some level you have to understand what that means. Even if you disagree.

Do you think people – YouTubers, strategists, and even the general public – will learn from what happened to PewDiePie?

Only if they have an educated response to it or a desire for one, and to have nuanced conversations instead of trying to win a debate or an argument, or trying to defend their point of view. Many people, unfortunately, want to defend internet culture instead of analyzing and deconstructing and learning that the current culture of the internet may not be sustainable from the standpoint of the people who have to write the checks and keep the lights on.

Roberto Blake is a Creative Entrepreneur helping businesses, brands and individuals market themselves effectively with engaging visuals and effective messages. Roberto has over 10 years of experience commercially in design and marketing and has helped brands, both large and small achieve their goals and reach their audiences. His work has been recognized by Forbes, HuffingtonPost, Adobe and Photoshop Creative Magazines. He is a HOW Design Live Speaker and contributor to several publications.


amy-in-hatDr. Amy Jauman, SMS, is the Chief Learning Officer at the National Institute for Social Media and author of the Comprehensive Field Guide for Social Media Strategists. Amy is also one of 58 members representing 12 countries in the inaugural class of the Prezi Educator Society. Previously she was the Social Media Director for Women Entrepreneurs of Minnesota (WeMN) and she currently serves as the marketing director for the Minnesota Chapter of the National Speakers Association. She is also an adjunct professor in the St. Catherine University Business Department and the St. Mary’s University of Minnesota MBA program.


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