Ray William Johnson Tried to Warn Them

in 2012 Ray William Johnson was the number one most subscribed YouTuber on the platform which sounds like a great accomplishment but it made him a Target Ray was in a feud with a merciless greedy and borderline evil company that was actively trying to leech every last dollar from big and small YouTubers all over the world some of your favorite creators were victims PewDiePie moist critical Philip DeFranco just a name a few the ironic part is that this company dubbed Maker Studios was founded by other popular YouTubers it really be your own people however the true Kingpin of the Maker Studios mob was a man called Danny zappin a federal convict who got out of prison and exploited the untapped Gold Mine of YouTube money however despite Ray's Valiant efforts of exposing the evil tactics of zappin company it wasn't enough Maker Studios would go on to sell to Disney for over half a billion dollars this dream team Guided by the vision of a federal convict got filthy stinking Rich at the expense of hardworking YouTubers around the world this is how they did it YouTube launched in May of 2005 Danny zappen AKA Danny diamonds was one of their early users because he was on house arrest with nothing to do but browse the internet all day in 2000 Danny moved to Los Angeles to be an actor but failed he claimed it's because he confronted Hollywood's Gatekeepers after being denied multiple roles and they blacklisted him because of this zappin needed money so he smuggled ecstasy got caught and was sentenced to 2 years in prison Danny began uploading videos to sites like crap TV before he was arrested so YouTube was like a shiny new toy when he got out YouTube gained 30,000 unique users a day after its Beta release in May 2005 and by the time it officially released in December of that year it would reach a combined 2 million total views a day and by the following month 25 million then YouTube reached its first 1 million viewed video which was Brazilian soccer player Ronaldinho receiving his golden boots in a feat of marketing genius Nike uploaded the video under the Alias Joe B as if it was any other YouTube user instead of the the multinational sneaker conglomerate the advertising potential was looking extremely promising which is why Google purchased YouTube for 1.65 billion within a year of their launch with such potential for money to be made not only did established companies get involved but opportunistic creators as well it's no secret that creators always have and always will be the foundation the backbone of what makes this site amazing YouTube content in the early days consisted mostly of just things related to Club Penguin classical music masterpieces memes really bad tutorials more memes and Soulja Boy but sprinkled in there were creators who made skits storytime videos theories of the universe news channels and the First YouTube influencers were starting to gain millions of views on their videos YouTube then launched their partner program that pays a percentage of the advertising Revenue when ads are shown on their videos most creators at this time treated YouTube like a fun hobby and not a career path however people like Danny zappin saw an opportunity that he knew he could exploit Danny told a few other creators about his vision his girlfriend Lisa donov her brother Ben Donovan as well as Shay Carl and CM G who were all YouTubers one night they all got together for a brainstorm session and laid the foundation for what would become maker Studio think originally the idea we were all content creators and there are a few others and and the idea was if we could come together and share audience and build an infrastructure we could all scale and build build a company you know to what it is today and I made videos but I didn't know how to do other things like I wasn't a great editor and I didn't know how to like you know shoot things and and maker gave me a place where all that was handled and all I had to do was just try and be funny and that working together you know you can help one another you know and I think driving audience to one another and helping new talent that hadn't been established grow in audience I think was really exciting and they essentially came up with the idea for a studio to share resources and talent similar to Hollywood Studios that have been around for a hundred years Danny thought this was revolutionary but the idea was nothing special most people didn't know why we were founding maker and we couldn't get any of our actor friends to participate the most popular YouTube content was lowquality webcam videos of people with simple ideas and a lot of Personality why do they need a professional studio well the answer was they didn't and even 15 years later many of your favorite creators today are just people in their room coming up with stuff but Danny had a plan and step one was to create a success story to prove this could work Danny and the group launched a collaborative Channel called the station which even included Shane Dawson Philip DeFranco and hi I'm Ron maker believed each of those Stars could be used to direct fans to new artists which inspired the company to build a network of Affiliated channels and they were right they had immediate success with hot girls on teen cribs amassing 60 million views what's up MTV my name's Ariel Welcome to My Crib let me show you around meet my less attractive friend Jasmine she's super ugly but don't hold it against her the station established an office space where they would connect during work days to plan shoot and edit the content they recruited more people to be a part of the team team Andrea's Choice what a day Derek cesal the Fine Bros who changed their channel to react Michael Gallagher from totally sketch Timothy deetto the list goes on and on their main type of content were comedy sketches similar to college humor but way worse I've been working at this bar for 2 months now and I got to say these people are really into their crap beers can I get a pooch Daddy Sean you guys got any blue caboose barley one when doppelganger Doppel box hey teach do you do I want do you sp I would never you should splooge is the new cool thing most of their humor was extremely low hanging fruit men dressing up as women playing on racial stereotypes and trying to make anything as sexual as possible 99% of this content aged terribly but this was a time where the edgier you were on YouTube the more views you could get we're here with two Hots on abot Kenny to see what they think about what's happening with the recession Danny's appen was pretty much the only person at the station who wasn't on camera that's because he was too busy figuring out how to get rid Rich Danny realized they had a money problem they had a group of 20 or so creators with millions of subscribers and they were generating tens of millions of views per month but the ad revenue from the partner program wasn't enough you see the partner program in 2010 was not even close to what it is today it was only available to a select group of very popular creators who had to apply and be accepted but even those people weren't making significant money because the percentage split was terrible the only way to make more money was to get more creators involved but the studio only had so much space and employees to provide services to creators this is where Danny's scheme began Maker Studios formed a multi-channel network or MCN instead of only working with the in-house creators at the station maker would try to discover Talent all over the world and sign them to the network in exchange for 20 30 sometimes 40 or 50% of the creators ad Revenue keep in mind YouTube would send the entire sum of the creators Revenue to the MCN the MCN would take their cutout and send the rest back to the YouTuber that's like your paycheck going directly to your landlord he pays your rent and then sends you the rest it's hard to understand why anyone would be willing to give up such a large percentage and control of their income most creators just didn't know how this business worked and that's where Danny knew he could exploit it however maker did provide some real value first of all maker could get any channel who signed with them instantly monetized the partner program was still limited access at this time and maker had Direct connections with YouTube since it was comprised of the most popular creators you also couldn't monetize gaming videos unless you had a partner Network because video game companies would copyright claim videos using game footage maker even had music label connections and music creators could use copyright music or make covers without getting claimed YouTube support was notoriously terrible and still kind of is but maker would provide you with a dedicated team member to help you with all of your YouTube related issues you even needed to sign to an MCN just to make custom video thumbnails by April of 2011 maker signed 150 channels that generated 325 million views per month one of their signes was the number one most subscribed YouTuber on the platform Ray William Johnson their roster was very impressive with Ry and many other top creators but maker still didn't have enough money so Danny raised $1,524 n99 from a venture capital firm called Greg Croft partners and at this point fans still had no idea how serious this operation was because the station's content was still just as unhinged as ever all of the creators that signed to maker were free to be as creative as possible so you couldn't really tell there was an infrastructure around it that's probably because it was still operated by creators who genuinely were interested in making videos rather than making money but Danny was not operating in the interest of fans Maker Studios was not taken seriously by the entertainment industry they weren't respected and that bothered him he needed to legitimize the company YouTube was known for lowquality Content which didn't excite investors I think the next stage that that YouTube will eventually go to is what Netflix is doing I think they'll step up and they'll start doing quality quity content and programming um in the same manner that's not just you know Annoying Orange is huge and it's great but you know the production value in a lot of and I'm not knocking them but the production value on the majority of YouTube videos is not there but I think once they step up to to that next level and I don't know what your plans are but then yeah it becomes it becomes its own network just like Netflix and all these others that you're going to see popping up so Danny wanted to make their company as big and legit as possible by mid 2012 they signed over 2,000 new channels and had viewership in the hundreds of Millions they leveled up from their previous makeshift office space to a now 40,000 ft series of buildings in Culver City they grew to 260 employees a group that includes advertising sales Business Development and tech people maker tried to create animated series and shows that could be formed into movies traditional television shows merchandise Etc but their most popular signes were still just regular YouTubers maker created what looked like a very successful Production Studio with multiple different departments servicing their clients when in reality it wasn't being put to use and out of desperation Danny zappin made a critical error most of Maker's money was coming from their top few creators Ray William Johnson was their Cash Cow Danny approached Ray and said maker needed a bigger cut of revenue from his online show equals 3 he asked Ry to renegotiate their existing contract 8 months prior to its expiration Ry said the terms were incredibly aggressive they wanted 40% of my YouTube Channel's AdSense Revenue after production costs and more importantly they wanted 50% of the show's intellectual property in perpetuity and perpetuity means forever he refused the new terms of the contract maker Studio took offense to his refusal so they threatened to shut down his projects when I politely refused their deal as it was not in my best interest they became increasingly aggressive negotiations quickly became a bizarre pissing contest between the heads at Maker Studios and myself and I wouldn't hand over my intellectual property and they wouldn't stop aggressively trying to get me to sign it over to them on top of that Ray claimed that they would not give him any of his AdSense money because remember it all goes to the MCN before the Creator now in the near future equals 3 will no longer be part of the Maker Studios Network so I'm going to film here for a while even if I don't have the proper equipment at home you know even if I have to film butt naked in a back alley you guys are getting a episode godamn it after Ray William Johnson announced his departure Maker Studios released a petty public statement Ray is still part of the maker Network however with the recent decline in viewership on equals 3 it made sense for him to go back to producing the show himself maker providing a full production staff of 12 people including a team of writers was no longer a viable option for equals 3 Ray vly denies that he ever had 12 people and writers working on his show nor was his viewership declining this led to a meeting to resolve the issue where the CEO promised to return Ray's YouTube AdSense account to him however that never happened they haven't made reasonable attempts to give it back to me they are now even trying to leverage my own AdSense account against me so that I will sign over all your favorite martian intellectual ual property void my stock options in the company and sign a confidentiality agreement to never tell the truth we wouldn't know about this hostage situation if Ray didn't post all of the information in an article published by New Media rockstars the other thing that he revealed to the world was that Danny zappen was a convicted felon and that he was waiting for his criminal record to be expunged so that he could officially become CEO of maker that xcon texted Ry at 1: a.m. and said your lack of integrity and character are sad you prepare for war bit Ray tweeted that nasty text that Danny sent to him and then Shane Dawson replied with I got the same text three years ago oh YouTube which is interesting since Shane Dawson was a part of the original the studio crew then seemingly disappeared Philip DeFranco said there's a theme Here seemingly hinting that he has had the same beef with Danny zappin then the Fine Bros also implied the same thing CM G seemed annoyed at Phil for speaking up Philly D you feeling okay CM G just wondering how you you and your guys can sweep this one under the rug this was one of the first big pieces of drama that YouTube had seen Shay Carl immediately defended Danny we're not the type of people that is going to try to like keep money from somebody or hold Ray William Johnson's AdSense account hostage um that is definitely not our intention and that's not Danny Diamond's intention and that's not Maker Studios intention I am proud to be part of Maker Studios Maker Studios has done a lot for a lot of YouTubers they have made it possible for over 350 people to earn a living in this YouTube space people like my brother and my sister have medical benefits because of Maker Studios because of people like Danny diamond and Lisa Nova and uh a lot of YouTubers countless YouTubers would not be where they're at today me included me especially if it wasn't for Danny Diamond's idea and passion for this company it's no surprise that cassum and Shay rushed to defend and Danny as they were two original Founders who were set to make a ton of money during the sale of maker whereas Ray Shane Philip and the Fine Bros were not Founders but the people who had the most clout that made maker famous and at that time were bringing in the views to boost the company's portfolio fans didn't know if they should support the creators who had nothing to gain by outing Dany or support the creators who founded the company set to make millions of dollars because in the middle of this drama Time Warner acquired a percent stake in the company for $36 million in December of 2012 and other contributors like Canal plus and singel have also provided 26 million for a combined total of 61.4 million in capital raised for maker the company was now valued at a several hundred million Danny zappen successfully built his company to be the corporate Enterprise he envisioned on house arrest now he wanted to take his money and run in April of 2013 Danny zappen asked to leave the company cash out his stocks and received 6 months of pay but he was willing to stay on on as an adviser the board had a meeting and authorized his departure planning to replace him with enan ch a successful businessman in his own right however Danny very quickly changed his mind demanding a senior executive role in order to save the company when it was denied that's when maker board member Mark suster claimed zappen became hostile zappin would file a lawsuit against maker and claimed the now CEO Christ and the board hatched a plan to take away zapp's power and shut him out of the company I guess karma got the ex-convict badly they gave him the same treatment that he gave Ray William Johnson 4 months earlier but Danny made the right choice he learned from his mistake as a failed drug dealer you need to quit while you're at the top Danny knew the MCN industry as a whole became worthless on April 12th 2012 YouTube opened their partner program to anyone in the top 20 countries that used the site now you no longer needed an MCN to be monetized you didn't need an MCN to make custom thumbnails they would not protect you from copyright claims even though they said they could you don't need a fancy multi-million dollar Studio to produce videos in your bedroom maker had way too many creators signed to their Network to provide services and support to all of them individually so why would a Creator sign to them well because they were really good at lying today we have the benefit of hindsight we know how many independent creators have built legitimate businesses through YouTube We Now know that YouTube is somewhat of a stable career path it's not just some wacky hobby that only Fringe kids do in 2012 the future of YouTube was still unknown so it was very easy for sales representatives at a big company like maker to convince little old Patrick that he needs the backing of a major corporation but they even convinced large creators to join in December 2012 maker was able to acquire the new number one most subscribed and viewed YouTuber on the platform PewDiePie once that happened they acquired most of the YouTube Giants Epic Rap Battles of History Tobuscus Markiplier Jack Septic Guy to name a few they quickly became the number one MC n by early 2014 they had over 55,000 signed creators to their network but big creators like PewDiePie likely were not giving 10 to 40% of their ad Revenue to maker especially amidst their bad press some creators gave maker 0% of their ad revenue and the reason maker took 0% was more devious than you could imagine the fact that MCN received the entire ad Revenue check from YouTube then took a small percent or 0% before sending it to the Creator was crucial for their business model it makes their cash flow look insane maker bank accounts were holding tens of hundreds of millions in cash MCN used these numbers to convince investors that YouTube was an untapped gold mine and it was because of their content strategies the other number they used to trick investors was views by signing top talent they were able to show how many views AKA advertisement potential they were generating every All Hands meeting was led off with the number of views they were doing 10 billion views 11 billion 12 billion but the reason the views were growing was because the network kept growing and we were just adding more and more channels also so maker did not technically own the content that creators like Markiplier and Pewdiepie put out it was riddled with copyright material and couldn't be sold to other platforms investors did not understand YouTube at all but they couldn't ignore the money in 2013 maker generated $370 million in ad revenue and 70 million of that was in direct sales if you watch my previous video on Disney then you know that in the mid-2010s they were on fire with every aspect of their business looking to take full control of every content medium in existence they wanted to buy their way into YouTube and in March of 2014 Disney acquired Maker Studios for $500 million with the promise of up to 950 million if they met their targets the final number ended up being 650 million original Founders like CM G Lisa Nova and Shay Carl made a fortune this is going to change our lives and the lives of my children forever forever this will change my kids kids life by trusting the vision of Danny zappen Shay Carl got filthy rich he bought a multi-million dollar compound in Idaho and still uploads consistent Vlogs of him and his family enjoying the extraordinary wealth when the original Founders made this business it was a humble idea but it quickly turned into a system to make the business way more successful than it was so the stockholders could sell it and cash out leaving someone else to handle the pile of trash and Disney had to take out the trash they quickly realized they bought a business built off lies Disney didn't really do anything with Maker Studios they thought all YouTube creators would just become Disney Marvel and Pixar marketing puppets shoving Disney ads in young kids faces in every YouTube video and they honestly could have forced that but they didn't maker Executives complained of the slow integration process and that they didn't receive access to Disney's brand and intellectual property they probably didn't want YouTubers destroying their IP out of desperation maker tried to introduce new channels such as Polaris by maker a gaming channel they tried to revive the station YouTube channel with shows like casual sketch song voyage and time machine starring Timothy deetto and Ricky Shucks but these shows lacked the personal connection needed to survive on YouTube it felt corporate and soulless despite the downward Trend they kept signing creators into predatory contracts forcing them to be trapped in a failing business there are countless examples of creators expressing their resentment towards maker and all other MCN that have scammed them but the best example can be explained by none other than moist critical and then maker came along and said hey we'll offer you this contract it was a 60/40 split and at the time that sounded great to me I have never had any way of contacting maker their support line does absolutely fing nothing and if you don't have your channel manager there to be that bridge then you just have no way of getting in touch with maker it would sometimes take up to 3 months to get one check from maker was last year when my channel got disabled due to false copyright strikes I could not contact maker no matter what I did everything possible to get in contact with him a contract shouldn't Auto renew you should have to sign off on it each time it tries to renew Maker Studios is just so lazy so unorganized and just doesn't give a about any of the people in their Network insanely unfair money splits terrible communication no assistance with copyright and automatically renewing contracts that creators cannot get out of in a silver lining to a terrible situation PewDiePie stepped in and saved the entirety of YouTube his anti-semitic joke and Nazi imagery had maker immediately drop him from the network Disney decided they could not take a risk on unpredictable YouTubers anymore they cut support from over 60,000 YouTubers ERS down to just 300 they rebranded maker to Disney digital Network and now the MCN business is pretty much dead it's hard to know if Danny knew this business would be a scam from the very beginning it initially started out as a humble group of creators working together to achieve a common dream and within a short few years they were stronghold thousands of creators in evil contracts forging their books to make themselves look successful and almost destroyed YouTube as a whole but I guess a few YouTubers got filthy rich so it's all good right

Channel: Patrick Cc:

Views: 3,512,992

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Id: kkr0x21ZISk

Length: 22min 0sec (1320 seconds)

Published: Mon Dec 25 2023