The Arms Race Fueling the Creator Economy

a decade, even before everyone started calling them influencers. Now he's doing it again as part of a new management firm, Underscore Talent, which gives us a good opportunity to see how this rapidly evolving business continues to change. Welcome back to Strictly Business with Dan Weinstein, co founder of Underscore Talent, which represents some pretty big names in the influencer world.

Maybe you've heard of the kid duo of Lad and Nikki here in the top ten among total subscribers by some counts, or the Royalty family or the Labrand family. Like I mentioned, Dan, you've been active in this space for a long time, so tell me what is it about this business that you've stuck with all this time, is the opportunity here bigger than it's ever been? And why yes, thanks Andy, and I you know, even more so than I think around you know, five or six

years ago. The opportunity for creators to build meaningful businesses and be sort of entrepreneurial is exponential to where it was. You look at, you know, somewhere like three or four years ago, when the top creators in the space maybe five years ago, you know, we're lucky if they were earning a million dollars a year, two million dollars a year. That was the top half of one percent, and it

was generally driven by brands. Now you've got the top half of that same one percent earning twenty thirty forty million dollars in building companies that you know, I think arguably could be the next unicorns in the in the coming you know, coming decade. And that's just a really exciting place to be. And you know, I love being sort of a very disruptive um, you know industry. So

what changed here? Because I remember those days where it was all about, you know, get the brand deal and you know the rest is gravy, and now it seems like it's the gravy where the money is made. Yeah, it's so it's interesting, I think, um, you know, a while ago, it was the thesis around the whole company, even started two thousand seven, was that access to an audience was going to drive meaningful value. Right. It was disintermediation.

You could circumvent the gatekeepers, go direct to your audience, and you know, the heavens will open up and money will write down upon you. Um. And I think some of that was true, right, And a lot of it,

again was was driven by advertising. But the technology, the plat forms, the companies that have been built even in the last two years to further strengthen that relationship with an audience and provide a low barrier entry to monetize that audience in myriad ways has allowed creators that that aren't even in that top half of one percent to

build sustainable and real businesses. You know, I call it sort of that middle class of creators are now able to leverage their audience, price people's passion or fandom in meaningful ways provide whether it's exclusivity or content or memberships or all these other things that are coming about to drive real revenue and and and brands and advertising is

becoming less and less of an important piece. When I would first talk to you about this back in in two thousand seven, when you were dealing with names like and I wonder, who's going to remember the likes of Annoying Orange. Um, you know Lucas, Uh, what is this Lucas cruchank right? And back then it was I remember you telling me it was all about you get your start on the platform, but then you've got to graduate that.

I pe so that you know, Lucas gets his TV show, Annoying Orange gets his movie, and you guys you were great at that. Um did some real pioneering work there. Um. Is that no longer the case because that's you know, my from my Hollywood vantage point. Uh, that was the be all and end all ten years ago. Yeah, that I that's definitely not the case anymore. Um. And and I think back then, you know, we we made we were still innovative in the way that we made these movies. Right.

We leveraged our access to the audience. We put in our own capital to drive a better economic outcome, which I think was really interesting at the time. But the goal was get on TV, get in movies. Seldom music do do the traditional sort of Hollywood thing. Um now, I think you know it's almost TV and film are still important, but it's one spoke of that wheel right and it and it has to be under the right set of circumstances. In terms take a property like like

uh good Mythical Morning with the Mythical Entertainment Crew. Years ago, I would have said, that is a late night TV show. We need to go to MTV or NBC or one of these places and and sell this into into late night. We'll drive the audience, it will be it'll be great. That's gonna be the win. And the reality is today when you look at it, britten Link would say, well, why would we do that? We own the show, we are super profitable, we have a media company that has

eighty year ninety executives in it. We've built products around it, We've built other vehicles and other talent around it. This is the asset that we're going to continue to sort of build. Why would we let MTV own that that asset for a much less economic upside? And I think you're seeing a lot of that today. I think it's gone.

There are definitely people you know and creators that want to be in movies and television and where that will drive real value, But it's certainly not the only opportunity, um, and it has to be a part of the right sort of overall strategy. What you're saying actually reminds me of another former client of yours, Lily Singh, who I think, after you represented her, went on to late night TV at NBC for I think just a few years. And I don't know that that was necessarily a successful experiment.

Not not that anyone's worried about her. I think I think she's gonna do just fine. Yeah, I think I think, Look, Lily is an incredibly talented creative and she'll be and she'll be you know, great and whatever she sort of does.

I think it was an interesting experiment. I mean, I think part of the thesis was that can you know, can she drive her audience to you know, television, And I think the reality is is that, you know, primarily her audience is not going to stay up and watch you know, late night television at two in the morning on on NBC, and and the format was not what was sort of, um the crux of what drew that audience to her in the first place, and so it was kind of trying to bring the Internet to television

and it wasn't separate, and I just think it wasn't, you know, a bit of a failed experiment. And I'm sure there were a lot of reasons why, including NBC and and you know, in Lily's camp, um, you know, but yeah, I don't. I don't think was was the home run that it was anticipating. So influencers don't need

Hollywood anymore. Give me, as a point of contrast, walk me through an existing client of yours and the spokes of the wheel and the many ways they're making money, which I would assume are is very heavy on, you know, merchandise licensing. Yeah, so I think there's a lot of different ways. So so we'll take the Royalty Family by example. Right, So they've got you know, north of twelve or thirteen million subscribers on YouTube. They produced content, you know, on

a daily basis. They generate a tremendous amount of revenue passively from advertising on on YouTube, the ad sense revenue. Right. We then also have partnered with them to take their content into other other platforms that are also monetizing, like Facebook, like Snapchat, where we're sort of repurposing their their sort of really robust library of content and and driving incremental

and passive and recurring revenue from other platforms. We also sort of partnered with them on their will call it merchandise, but I think it goes beyond that. It's it's less hats and t shirts. UM. You know, the mother of the mom of the group is very into fitness, and we started sort of in a very bespoke way to create a line of at leisure where that we're in the middle of developing. We think that's going to be

hugely successful. There's a couple of other consumer product categories that we're looking around in the in the kids space that we're just starting starting to to sort of develop UM and we and the and obviously brand still at that scale, still play a big piece of it. I think you know, once or you know, once a week or so, there's a there's a branded entertainment piece that

comes out through some really robust partnerships with brand advertisers. UM. We've also created i P that we're launching on all these different platforms Snapchat, Instagram, UM and and and the like. And so at the moment, TV is not a thought. Um, will it? Will it be at some point in time? Possibly Is there a larger show that that requires the distribution of the Netflix or or that kind of a

budget level. Maybe, but only if it makes sense. It's certainly not a necessity at the moment, and they're in control of their own destiny. So it sounds like the brand advertiser though it is still an important spoke in all this. And I recall a few years ago having your colleague, the the shy retiring rezazad Uh describing with great candor the difficulties of working with brands in the space, you know, the customization that just kind of the wild

wild west of it all. Has it gotten any better in terms of working with brands and bringing them into this kind of work. I think it. I think it has. I think um, I think brands, I mean, look, there's a natural maturation that that that that happens, right, Um. I think you go through all your trials and tribulations, both on the agency side on the talent side, there's harder brands to work with, there's harder influencers to work with.

I think, so threading that needle sometimes can still be still be challenging, but I think that advertisers for the most part have understood the value of where uh, you know, influencers play in their in their chain of activities. I think that they've learned how to really understand efficacy as it relates to the performance of the of the videos or the content or the influencer, and they started to learn like, look, we don't need to reinvent the wheel.

There's some really great bespoke, custom branded content out there, but not everything needs to to be that and to go viral on if you want to reach a very specific audience, you can very easily say, you know, like in podcasting, here's the brand we're powering this piece of content. You know, here's your here's your your value as the listener or the fan, whether it be a discount or

this or that ideality, and you can track that. And I think you see a lot more performance based marketing today than you do general awareness, super custom you know, branded content which was wrought with all sorts of challenges. Dana, I want to also talk about the relationship with the platforms, which you know, as we've talked about it here, it's been sort of a very YouTube centric conversation. But of course there's plenty of platforms out there that are seemed

to be actively courting influencers. So again, in terms of a contrast from five, ten years ago, how different is there in terms of the multiplicity of viable platforms to play with. Yeah, um, I think you were in the middle or maybe in the beginning of you know, proverbial

arms race for for influencers. UM. I think with with the you know, exponential growth of TikTok and all the value that TikTok is providing to creators and influencers, you see a lot of the you know, more established platforms that may have been behind the eight ball in that regard starting to try to play catch up. So you've got TikTok, You've got all the Facebook companies, Instagram, Facebook, etcetera. You've got Snapchat, who has really leaned in in recent

years to um supporting and innovating around creators. Um. Twitter has come out of the woodwork and started creating a tool sets and monetization opportunities for for for them. You had you had an insurgence of very small, smaller but specific platforms like clubhouse or this or that or the other thing, and so there's a lot of opportunities to build audience and people leaning into developed specifically for creators so that they can you know, better monetize their their

their their wares um. And I think that's reflective in how how creators and companies like us are engaging with these platforms. And so what does this mean strategically? In other words, do you tell your clients, hey, you know, pick one platform and really focus there, or you know, spread yourself as thin as you can across ten different platforms, or or is it just every client takes a different strategy. Yeah, I think it's a little it's a little ladder, right.

I think it depends on the client and the audience that you're trying to reach and where those audiences are. Um, I think there are still some differences, right, you know, TikTok tends to be a little on the younger side versus where Instagram is today versus where you know, Facebook proper is, for example. So I think understanding where your audiences and playing to your strength is important. But content ubiquity in this world and consistency and and and being

top of mind all the time is super important. Even leaning into new platforms like YouTube shorts, for example, which came out you know a month or two ago, has has given creators a whole new opportunity to grow an audience.

We we had creators that have been operating on YouTube and other platforms for you know a year or two years, you know, getting thousands of views that have really leaned into YouTube shorts and overnight seemingly have started to get hundreds of millions of views um and so you've got to be on top of what what people are responding to, where the eyeballs are um and and look, I think a lot of different opportunities because there's a war for

for influencers at the moment, and and and frankly because of you know, the new Apple update where where privacy is becoming more of an issue and ad targeting is going to be more challenging people it have very specific audiences that can communicate with them directly are going to become more valuable. So so you know, there's an opportunity to I don't want to say, play them off of

each other, but leverage each for their strengths. And really the creator is in the driver's seat at the moment, and you know, I want to get back to TikTok because in the scheme of this arms race, it seems like TikTok is sort of sucking all the oxygen out of the room. Uh, there's just so much attention, so much heat. Um. But does that mean you necessarily I mean, for your say, more family oriented clients, do they not necessarily belong on TikTok, which, as you put it, is

sort of more young skewing. Um. No. I look, I think TikTok is really captured, you know, a very large audience in a very short amount of time. And I think there's rooms for room for a lot of things and a lot of specific niches. I'll address the families in a second, but look at something like, you know, the phenomenon going on with book talk right now, um,

which is a very specific niche around around literature. And and I think if you search the hashtag book talk, twelve point six billion views in the last month or two have been around that topic. And it is actually catapulted essentially non existent or dormant you know, books to the top of the best seller list. Like how influential that is in that world? Um, is sort of incredible.

So and I think you find that you find culinary on TikTok, you find uh you know, books and movies and and and all sorts of very specific niches are emanating from that platform. So I do think it's important to be there. It's it is the platform of the moment. It's capturing a lot of the zy guys. Our family channels are there. For example, the Labrandt family, uh, Cole and Savannah are some of the largest TikTok creators out there, and what they do on TikTok, while it's still family oriented,

is not necessarily what they do on YouTube. I think that's an opportunity for Savanna that, for example, but mother to be more herself and around her lifestyle and this and that. The other thing where is what happens on YouTube is much more around the family dynamic, Everley the kid, and things along that along the line. We're gonna take a quick break, but will be right back with more

with Dan Weinstein, co founder of Underscore Talent. And we're back with Dan Weinstein, co founder Underscore Talent, a longtime expert in the influencers space. I'm gonna ask a question that it may sound like I'm joking, but maybe I'm not which is does a business like yours have to be managing a TikTok house? Do you do you need to have you know, uh, ten twentysomething's in a mansion in bel Air at this point? Or is that optional? I think that's optional. I think Look, I think there's

there's opportunity there. I think some have done well with it, and I think others have, you know, sort of not done so well to be, to put it nicely, um, I think that just the idea of getting people together and creating in a house is you know, isn't enough. I think there needs to be a business raph around around that. I think there needs to be adults in

the room. I mean, I think that, you know, part of the reason we started Underscore was that we looked around the creator space and like you said at the beginning, you know, my partners and I have been doing is a combine thirty plus years in both traditional and digital. Um, we saw a lot of disparate representation, a lot of young,

inexperienced people, oftentimes a little unsophisticated. Not not everybody, I'm not casting versions generally, but there, but there really wasn't you know, that sort of preeminent place where people could go to and feel guided, right and and and safe. Um. And I think that was what we were hoping to sort of bring to this kind of space that not only the entrepreneurial spirit that we have and ability to execute,

but but some real guidance and some real you know, representation. Well, but on the flip side of that, I gotta wonder whether you've got to have a real stomach to be in this space. I you know, you read the headlines about you know, certain influence or misbehaviors, and you know, also you're working with children, people who you know their parents are working with them, and it just seems to me like there's so many different ways this could get

kind of hairry. So how do you deal with all that? Yeah? I mean, look, you you've got to be um, you know, a guiding principle, you know, guiding point in any one of these creators lives, right, you have to make sure that they're surrounding themselves with the right people and the

right teammates. And look, you can't plan for everything, and and stuff certainly does happen, and people in this space tend to push the envelope a little bit, which has its consequences, but I don't think it's that dissimilar from the traditional space. UM. Today, I think the the platforms, and I think that the speed at which news and information and all this sort of stuff can can go

viral and haywire is more substantive. But I think there's a there's plenty of sort of celebrities, TV stars, movie stars that are capable of the same, you know, anxiety driven stuff. UM. Fair point, but but yeah, you do. You have to. You're working generally with a younger audience that haven't done this before. They haven't cut their teeth for years and years in the hone to craft necessarily, and that comes with its own set of challenges. But I think I like the opportunity though. I think the

opportunity with that white canvas is worth it. But how do you know who to work with? Again, in this creator economy of tens and tens of millions? You know, I assume it's not as simple as you're just looking for someone who has the highest subscriber count. No, I think I think, look there, you know, it's always been I think equal arts, you know, art and science. I think you've got to have a belief. You've got to have a feeling. You've got to look at something and go,

I like that content. I think there's something here. I know why the audiences is engaged with it. Right even even way back in the early days with with Fred, you know, you most people could take a look at what he was doing on YouTube, look at it for about three seconds and go, oh my god, what is this annoying thing? And what am I watching? But you know, for those select few of those kids, when you really got into that content, there was something there. There was

a creative storyline. It wasn't just a kid vlogging his life. He created characters in a world and this this whole thing, and and if you could help him amplify that, which you know we did. Um, there was a lot of opportunity there, a lot of a lot of value. And I think it's it's the same you know, I think, look, they're you're always gonna have your flavor of the month, and that's uh, you know, that is what it is.

But trying to find something that that has residents, that people are engaged with and you can kind of put your finger on why people respond to it and that it and it can sustain you know, it's a bit of an art and that's what you tend to look for. And not everybody's gonna make it, but you know, I'd like our chances to to help cultivate some of the

next generation, you know, biggest celebrities out there. Well, I'm sure when you're pitching the clients, you're you're showing them the track record that you've racked up and and your partners have racked up. I do want to talk about you know, you've got this new venture in place, but

this goes back. Now. I've been talking to you for for over a decade when the Collective was the name of the company, and you had come out of the Firm, which was sort of a big classic Hollywood management company, and then the Collective in turn was was brought up by Studio seventy one, And I just kinda want to understand what happened to the last iteration of the company that you had with res azad and and Michael Green.

Why are we sort of at this new place. Yeah, I mean, so it's interesting we sort of we sort of did a full one eight. I mean, the Collective back in the day was sort of a pure play management business, although with a different thesis that I sort of mentioned earlier, which is that and this is two thousand six, mind you, which was that technology was going to enable artists to go direct to their consumers and and be able to extract value from that relationship directly.

And we didn't know how that was going to play out, but if we could help artists aggregate audience communicate with them, that we would be in a position to ultimately partner with them potentially on their on their endeavors UM and it would be a win win for everybody UM and you know, essentially putting the economic power back in the artists hands versus the distributor or whatever whatever that third

party was UM. And we did that really successfully for a long time, and as we scaled, where the opportunity had led us was to sort of becoming more of a scaled publisher of content UM. And I think the Collective and its iterations over the last ten years, going from collective to collect the Digital Studio, which was really a management focused company too when it really became Studio sev one was was was just driven by the opportunity in the marketplace. I think YouTube would come to us

and said we need help, uh working with this creator class. UM. We needed to start to build and provide services for these creators. We needed to build a sales organization, we needed to build a distribution apparatus in order to drive that. That value and scale was really important to being you know effective, you know in that space and at that time, UM.

The downside of that UM was that that we really sort of over the years migrated away from being a pure played management business and fiduciary to talent and being more of a a service provider and a and a media player. We were essentially one of the largest social video distributors you know out there, UM and and it was hard to serve both you know, both bosses, I guess right, on the one side advertising which drove the business,

and on the other side of the talent UM. And so last year residentis obligation to the to the company had come come up and we had we had gotten into where we you know, wanted to get it. We're very proud of it. We left it in good hands

and it's still a very good company. But in our d n A resident I have always been talent people UM to going back to U t A even before the collective and again going back to sort of what we were discussing about the opportunity for creators today being better, you know, much more significant than it was, you know a couple of years ago. We thought pivoting back towards our roots and being real UH managers again and representatives, UM was was a really interesting opportunity that we couldn't

pass up. So you've gone back to the roots. And I'm curious what the dynamic is like because you well, I was gonna say search for clients, but maybe the clients are searching for you. Or is it the kind of thing where you're like looking for needles in a haystack or is this really just a stack of needles, because you know, there's lots of people with millions of followers. Yeah, I mean there's there's a there's a lot of needles out there for sure, UM, And I think it's both. Look.

I think in a very short amount of time, we've got about uh we're zeroing in and out thirty on the team UM. Having just launched in January, We've got a very solid list of clients that are at the top of their platforms, and you know, across all the different platforms from TikTok to YouTube, etcetera. Um, we've we've started to execute and I think we've gotten some some some good notoriety and press around some of our executions.

And so we're we're getting incoming opportunities. We're looking for other opportunities. I think our our our past history, our reputation is certainly helpful in in navigating this this world. Um, but we're not building an m C. And again we're not. We're not we're not looking for thousands of clients. We're not. We're not just a pure place scale thing, and we're not just throwing stuff at a wall and seeing what sticks.

We're really focused on trying to cultivate the right talent, you know, doing the right thing, and and and doing it in a space where we know that we can add value and we can help them build real enterprise value around what it is that that they're doing. Just Um, yeah, you just mentioned mc N, which was of course the multi channel network business model that in the early days of online video platforms is a big deal. Um, here's another acronym to throw at you that I'm curious figures

into your business. And f T S I would imagine that could be a place where your clients will apply. Yes, I you know, to be honest, I'm still trying to wrap my head around. And look, I think the underlying technology, the blockchain, smart contract, that whole thing is going to be here to stay. It's super valued. It's got a tremendous amount of applications. I think some of this stuff has just been um hyper inflated and and and and hasn't really worked the way that it's supposed to work.

I don't think it's right for every application, but I do think that there's gonna be some real, real value there um in particular around a specific you know, sort of audience demographic. And I actually think of it, you know, because I remember back in the day when we were representing Lincoln Park and starting to build out their their fan club from from a very sort of you know,

bespoke standpoint on websites and etcetera. The n f T has tremendous implication in the music business in particular and around what I think are our fan clubs. Right, how do how do you create exclusive experiences exclusive value where the wold the value of the token or whatever it is, can can actually live on and and and be sold. And it's not sort of a one off um sort of novelty. I think it's kind of where I I

want to play. And we're sort of steering our clients first is hey, let's partner with an artist and just see what we can sell um and and you know, so that we're trying to figure that we've got a couple of irons in the fire. Um and and in particular, I do like a company like you know, rally Io, which is much more around social tokens and you know, versus the actual n F T s UM. But there's a there's a lot more to learn, and it's an

exciting space to play for sure. And by the way, you mentioned you know, established talent like Lincoln Park and you guys have represented another established talent many years ago, Kanye Prince, Martin Lawrence. Is there any piece of this new business that could be playing in the so called

you know, established talent space. Yeah, I think that. You know, when when we started the company, our our thesis was we want to work with any talent that has the ability to cultivate and communicate directly with an audience at some level of meaningful scale. And I think we're agnostic too. Are they a quote unquote digitally native or or sort of emanate out of the TV, film or celebrity space.

And so I think we absolutely wanna Look if I could be representing the Kardashians, for example, that would be a home run it were uniquely situated to to help them execute in this world. Um and and that would be that would be an interesting opportunity. We already have some crossover talent, you know, again I'm using air quotes that you can't see, but um and you know like Twitch and Alison Boss who you know, Twitch was the co host of The Ellen Show and so you think

you can dance. And I would say they're like they're equal parts, you know, traditional celebrity TV host kind of talent as well as um digital influencers. Right, they have huge followings, they're creating content consistently on their own, They're working a tremendous amount with brands and advertisers, and there's a lot of opportunity there, and I think we want to get much more heavy in that in that space.

You know, I can't believe we've gone this far into the conversation without touching on what must be the number one in fluenz Er monetization tool boxing. When when are your child clients canna be lacing it up for you know, prime time about a note pay per view? Yeah, children boxing, that's gonna be the next one. I read that Tante Mojo is gonna start boxing now too. Um. I mean, look, it's you know, it's interesting, it's it's you know, you

can we can kinda laugh about it. But it goes back to if you have an audience and you have a vehicle to create something unique and monetize it, that there's there's real value there. I mean, I you know, on the one hand, you know, am I a fan of their content and their persona, you know, referencing you know, the Paul Brothers. Not necessarily, um am. I hugely impressed with what they've been able to do and how they've been able to do it, and they're they're sort of

business acumen and and and all that sort of stuff. Hugely. It's really really incredible what he was able to accomplish, you know, in particular with the Floyd Mayweather stuff. Um. And I think some people are going to do it better than others, and someone will be a joke and they you know, tried and whipped and some will be a grand slam well, from boxing to book talk. That's why I love following this space. Very unpredictable, very interesting.

That's why I always like talking to you because you've been on top of this space long before it was cool and so happy to take the time to talk to you today. Appreciate you sharing your insights. Thanks again. This has been another episode of Strictly Business. Tune in next week for another helping of scintillating conversation with media movers and shakers, and please make sure you subscribe to

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