Sometimes, digital publishers swear they love big platforms like Facebook and Google. Oftentimes, they gripe about them. But either way, they can’t live without them.
Figuring out how to live with them is the challenge. Ask Rich Antoniello, the CEO of Complex Networks.
For years, Antoniello insisted that his company — which publishes stuff aimed at young, mostly male audiences who love hip hop, sneaker culture, or food — would make its way in the world without YouTube’s help. He didn’t want to put his videos on Google’s site because he didn’t want Google to take 45 percent of the revenue those videos generated.
Instead, he figured, he’d put small samples of his stuff on YouTube and hope that would-be consumers would find the teasers and come to his sites, where he’d keep all the money.
No dice. YouTube wants full videos, not bits of videos. And if you don’t give YouTube what it wants, it doesn’t give you what you want, Antoniello found. So Antoniello complied, and his audience grew, and he made money. Not as much as he wanted, but better than no money.
Antoniello explained his reluctant but lucrative about-face on a recent episode of Recode Media:
One of the reasons I made the big mistake when we went into video hardcore, I was like, I couldn’t swallow YouTube’s 45 percent tax. And I was like, I have a gigantic network, I have a distribution platform. I don’t need that.
I’m making videos, why should I give YouTube half my money?
That’s right. I don’t need them. I could build a player, I’ll get Brightcove to do us a custom player for nothing, or virtually nothing … we’ll run it across our network, I don’t need them. And that’s because we were so successful in never going all-in on a platform before. I quickly realized video is different. Even in 2012 and ’13, just by that time, basically anybody under 25 years old had been conditioned that this is your new TV.
YouTube specifically. And we had to figure out how to work with them and I had to swallow and figure out how to do that, make that 45 percent. That was probably one of the bigger mistakes we’ve made at Complex, but that was a big one.
And how do you fix that?
We were never going to be able to just put teasers up and then point them back to our player because that’s not the way it works, like they will tamp you down if you’re not using …
If you want to try to hack it by just giving little samples and saying, “for more [click over to our site],” YouTube will not …
Forget it. You’re not going to make their right bar [of YouTube’s site, where it recommends videos]. You have to use their player on your site.
And by the way, that makes sense. … If you’re a YouTube consumer, you don’t want to click on a video that’s a teaser for something on Complex, you want to watch the video.
Look, disproportionately our consumers are on mobile, and the bottom line is YouTube’s player works. It just works. And I know that’s nothing in this day and age, but a couple of years ago, most players didn’t. … We were like, “Okay, if we’re going to go [on YouTube and other platforms], let’s build franchises. It’s not just about the short-term view and it can’t be you chase the viral hit that everybody else is doing. Let’s create series, let’s treat it like it’s TV. If the kids realize that that’s their TV, then let’s build it the way a network would.” We went after series very early, and again this sounds “duh” now, but not a lot of people were doing that.
People weren’t building series and franchises, they were going for the volume of views and one-offs and a viral hit, because that’s what agencies or PR or media reporters [would] like. Let’s go build something foundational and a community because you saw people like PewDiePie and others build massive subscriber bases. And it wasn’t because they were doing viral content, it was just a normal person in front. They were building conversations in communities and those were the people who are breaking out. So why not apply that to our brand?
How Complex built an empire
Now YouTube helps him with breakout hits like “Hot Ones,” an interview show where celebrity guests answer questions while eating progressively spicy chicken wings. Very often the chicken wings win. It’s an incredibly simple concept that anyone could have thought of but didn’t. Now it generates consistently big audiences, like the 44 million people who watched this Gordon Ramsay episode:
And it has allowed Antoniello to run a business that’s reportedly on track to generate more than $200 million this year.
A decent chunk of that revenue, though, comes from Verizon, which co-owns his business along with Hearst. Which could be a problem: Verizon invested in Complex back when it thought it wanted to push very hard into the media business, and thought Complex would be a good asset as it built out properties like Go90, an attempt to convince young audiences to turn to Verizon for short-form videos. Now Go90 is dead and Verizon is retreating from media (though it still owns the properties formerly known as AOL and Yahoo). So Antoniello will need to find a new source of revenue to replace the telco money.
We talked about all of that, along with Antoniello’s critique of bigger media companies with higher profiles, larger investment rounds, and significant headaches. He’s an entertaining and interesting media boss. You can listen to him chat, for free, right here.