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PERSPECTIVE

Felix feels the heat

By Jonathan Webdale 16-02-2017

When Felix Baumgartner, with the aid of Red Bull, stepped out of a steel alloy capsule more than 24 miles above the earth on 14 October 2012, he broke both the world record for highest-ever altitude jump and – with eight million people watching via YouTube – the online video platform’s record for its biggest concurrent audience.

This week, another Felix whose exploits have attracted millions of YouTube viewers must have come close to breaking records for spectacular falls from grace. Felix Kjellberg, better known as PewDiePie, was last year once again ranked the highest-paid YouTube star on the planet by Forbes magazine, earning an estimated US$15m from his comedic home videos.

Felix 'PewDiePie' Kjellberg in YouTube Red show

Felix ‘PewDiePie’ Kjellberg in YouTube Red show Scare PewDiePie

Having amassed in excess of 50 million YouTube followers and billions of monthly video views, Kjellberg found his contract with management firm, Maker Studios, terminated by Maker owner Disney when posts deemed anti-Semitic came to light.

In one, which has now been deleted from his channel, Kjellberg used global online marketplace Fiverr to get two Indians to hold up a sign that read ‘Death to all Jews.’ The 27-year-old Swede said this was part of a prank to highlight what people were prepared to do for small amounts of money and that he in no way supported such hateful views.

But Disney saw things differently after a report by The Wall Street Journal (WSJ) claimed nine PewDiePie videos in the last six months contained anti-Semitic jokes or Nazi imagery.

The Mouse House’s decision to end Maker’s Revelmode joint venture with Kjellberg was followed quickly by YouTube pulling the plug on a second season of its premium YouTube Red comedy-horror Scare PewDiePie, coproduced by The Walking Dead creator Robert Kirkman’s Skybound Entertainment.

The Google-owned site also removed Kjellberg’s channel from its premium advertising programme and ads from his videos.

PewDiePie fans have taken to social media to disparage the WSJ report and highlight the use of Nazi imagery for the purposes of satire in a number of historical Disney cartoons.

Whether Kjellberg’s intentions really were to “incite violence or hatred” is down to the viewer to decide, but his fall from grace comes as Disney reportedly looks to scale back the number of YouTube stars Maker works with from thousands to just a few hundred.

Having acquired the multi-channel network (MCN) in 2014 for US$500m, plus a further US$450m in performance-related earn-outs, the total ultimately paid is thought to have been around US$675m. Some streamlining and staff cutbacks have taken place as the company has become integrated within Disney’s core content operations.

The degree to which this represents a bellwether for the general state of the YouTube channels sector is perhaps also a matter of perception, but there are rumbles elsewhere that the flurry of investment seen in this space several years ago may not be yielding anticipated returns.

European broadcast giant RTL Group recently decided not to buy out the remaining share in Canadian MCN BroadbandTV, having paid €27m (US$36m) for a 51% stake in June 2013, and is instead exploring strategic options including a possible sell-off.

Planet of the Apps

Planet of the Apps will be Apple TV’s first original series

Meanwhile, Brave Bison, the business that emerged out of Rightster’s £50m (US$85.6m) takeover of UK-based Peter Chernin-backed MCN Base79 in 2014, has this year witnessed the exit of its CEO and a nosedive in share price.

Elsewhere, Endemol Shine Group is said to be scaling back its UK digital operation and putting its network of YouTube channels in the territory on ice.

But, again, perception is everything. As Richard Broughton, research director at Ampere Analysis points out in regards to the BroadbandTV development, even assuming declines since RTL’s original buy-in, the venture still has a potential valuation of US$1.3bn – meaning a sell-off merely represents sound business.

There is little denying that rationalisation of this space is occurring and some who accepted sizeable chunks of venture capital or corporate investment are making concerted efforts to ‘professionalise’ their output and generate revenue beyond YouTube’s predominantly ad-supported avenues.

Take for example the launch of Fullscreen’s US$5.99 subscription VoD service on Amazon this week, or the recent debut of AwesomenessTV’s two-hour programming block on UK broadcast net ITV2 – this as the firm ditches plans, however, for its own premium video outlet together with major shareholder Verizon.

YouTube is continuing to develop its SVoD service, YouTube Red, and this week unveiled plans to extend this initiative into original children’s programming.

But despite all this – beyond the furore surrounding PewDiePie and the growing pains of YouTube talent – attention is now surely focused on Facebook and Apple.

The former this week confirmed the launch of its own video app following months of speculation and – in parallel with significant strides in live streaming – is in discussions about licensing and developing professional longform content, hiring an MTV exec to oversee some of these efforts.

Meanwhile, Apple – for so long a company that has toyed with its Apple TV ‘hobby’ and the possibility of its own internet TV service – has released a trailer for its first original series, Planet of the Apps.

The move comes with the rumour mill already whirring that the iPhone 8 – the company’s 10-year anniversary iteration of its game-changing device – will arrive later this year loaded with advanced augmented-reality capabilities.

This is amid ongoing speculation about the launch of Magic Leap’s highly anticipated mixed-reality technology and an expected US$25bn flotation of social messaging service Snapchat.

2017 is well on the way to being another fascinating year in media, if not one Felix Kjellberg may want to remember.

today's correspondent

Jonathan Webdale Editor, FutureMedia & C21Media.net

Jonathan Webdale has been reporting on the digital media business and international entertainment sector for more than a decade, joining C21Media in 2004 after four years at New Media Age.

He runs C21’s daily news operation and also edits the FutureMedia strand online and its associated magazine brand.

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