Welcome to Strictly Business Varieties, weekly podcast featuring conversations with industry leaders about the business of media and entertainment. I'm Cynthia Lyttleton, co editor in chief of Variety Today. My guest is Sean Atkins, president of Jellysmack. Jellysmack is a prime example of a company that is active in an emerging business sector that I have been watching with great interest.
The creator economy, the wild West of social media personalities, is really starting to take shape as a content marketplace unto itself. With market structure comes support and administrative services like those offered by Jellysmack. I'll let Atkins explain in detail what Jellysmack offers its creator clients. It's a mix
of talent scouting, marketing and content distribution services. Atkins brings good perspective on how the creator economy is maturing thanks to his long resume as a digital leader in traditional media. Before joining Jellysmack in twenty twenty one, he worked as Chief Digital Officer for Discovery Communications and served a hitch as president of MTV. He was also CEO of RTL's Digital Video Group and senior vice president of New Media Programming for HBO. That's a title that signals how long
ago he held that job. Atkins and I spoke at Varieties Offices in late August, just a few days after we both attended the Streamy Awards that recognize influencers and digital creators. That event proved to be a jumping off point for the conversation coming up right after this break, and we're back with a conversation about the creator economy with Sean Atkins, president of jif Smack.
What did you see on stage?
What did you see in the caliber of talent that was at the event that said that tells you something larger about the creator economy and where it stands right now in twenty twenty three.
Yeah. I think the first thing, as someone who's been in both the creator economy and the traditional side of business, is an indication of how much the industry is exploding matures. It felt like I'd gone to the Emmys or the Golden Globes or to the OSCAR that felt like a traditional award show with the red carpets and people mingling and sometimes too much alcohol given at the tables, alcohol
and cosplay. What could go on to say, you know the same amount of like insider jokes that was happening there. You saw, you saw talent that would have had huge businesses for decades in the business and emerging ones. I think the thing that was a little bit differentiated is
the absolute diversity of that talent base. Right. We talk about in the traditional side of business with the desire for diversity and the struggles we're having as an industry, but you look at the streamings, they don't have that problem at all. Right, Like, there was absolutely by type of creators that were there, how seasoned they were, how
senior they were, they were new, they were old. You had the entire operation kind of outlined there, and it was really impressive to see now the whole industry come together and get celebrated, but sort of the indication of the level of maturity that's happening in the market.
You could not you'd have to be blind not to notice that the creator economy is creating all kinds of lanes for all kinds of diverse talents.
Some of the big.
Winners were totally new names to me, I will completely acknowledged, but you know, groups like AMP and RDC World were very very clear that this is you know, truly grassroots content that is being wheeled up by fandom and that you could really see, you know, very writ large there, you know, like like a traditional word show.
There were cheering sections.
But you could sense that in the way that you know, the streams again just as a microcosm has evolved, and talent is getting up there and thanking their teams right and their manager and it's you know, we can see from our vantage point of variety covering the content business in the last call it you know, probably accelerated by the pandemic, like most everything else in our lives these days, but the emergence of social media not just as a platform for people to come out and then translate to
books and TV shows, but truly making serious a significant living and a significant impact unto in social media, unto themselves. How is that emergence of that economy? How is that an opportunity for jellysmack Well.
I think the thing that first people need to understand is that the scale of what's going on with talent and with the businesses they're building and the career economy is most people generally don't really understand it. Right, If you think about the headline you might see in a writing magazine like the Rock signs twenty million dollars deal to be interfeated. That's a front page news that happens like every day in the creator space with creators that
people have never heard of it. You know, you talk about mister Peace, who's does very well, but there's you look at the dude perfect team that has not only a great digital business, they have a huge touring business. You can look at other ones like Charlotte Doebray representives a comedian who's not doing so on the platform. She's actually self funding her own pilots in series to develop
for television. So there's this immense amount of kind of success in capital for creators who actually completely control the entire means of production and the means of distribution, which really doesn't happen in the traditional media. So that's the most fascinating thing you see. But the level below and where Jellysmack comes in is with that explosion of talent
and the maturing of that business. Like any great entrepreneurial ecosystem, whether you look at restaurants being minted, or you look at real estate or anything that has a large entrepreneuri closs, there's an infrastructure layer that has to exist so those entrepreneurs can skip, because then the challenge for the creator class.
And I was actually having this conversation last night with some people who are both actors and creators, and they were talking about the difference between they started in the acting side of the world and they were used to like there as a DP, as an editor and all this infrastructure, and then they became a creator and there's none.
I'm setting up my ring line, They're sitting everything, And they were talking about how it's probably easier to start as a creator because you don't know that infrastructure exists, so you sort of build this DNA and you own all the means of production. But the contrary to that is creators who grow up in that ECOSYSM have a
tendency to confuse the mean of production as the creative itself. Right, So if you think you have to edit and write and do everything to scale to multiple platforms, it's very complicated. Just like if you and I started a restaurant decided we were also going to build an organic farm and make silverware and build we would have a trouble scaling. Right.
That's where Jellysmack comes because creators are in that moment right now where they're realizing like, oh, I got to hire editors, or I need capital to build a studio, or I want to build a merchandise line, or I want to build a touring business. They need partners who understand that scale, what that infrastructure needs to look like.
As what Jilly Smack does. We use all of our AI and technology to develop services that identify these creators at an early stage and then support them so they can grow into real, viable businesses across multiple areas.
And where are you seeing outside of like you know, signing a book deal, signing a TV show development pact or something. Where where are you seeing those big, those big twenty million level or you know, commensurate dollars.
Where are you seeing those deals?
So the detail is so it's interesting. So this is the thing I think gets a little bit confusing when we look at the creator economy from a traditional media lens, right, because we look at it from an entertainment perspective, and there is a sizeable amount of that. They're making videos, so that makes sense, But the other things you have to realize the creator economy is actually transversally impacting a
lot of different communities. And so when you talk about a creator, they might be on YouTube and they get ad revenue from YouTube, or they might get brand revenues, right, so they dual stream like they have a direct relationship with brands. But then they might come from not like an entertainment vertical, like for example, we have people who are in the legal space and they make a ton
of money from referrals into their law firm. Or you might have creators who for example, one creator who Blacaltes, who has such a big business that she's got a giant target retail partnership. Now, if you're looking for anything in the yoga space, but you can go through almost every vertical you can think about, and there's a creator with a very dominant position, whether it's real estate, you're looking at legal, you're looking at retail. We have creators
like Patrick Starr who have big beauty lines. We have creators like, for example, Karen Nate. They are creators who do travel. Now, travel and traditional doesn't work that well anymore, right, travel channel doesn't really do travel anymore. No, we don't have people running around doing travel logs anymore. But in
there for their ecosystem and their audience. Not only do they really have an audience who follows them for the information of pro but they're so well now they have an app and a business that helps people book travel at a discounted rate. There's like something you wouldn't see in a traditional meaning is where they use the power of their distribution actually build whole business credibility and credibility
in those areas. And so it's really hard to find actually a vertical that doesn't have creators pretty dominant in almost any industry, Which is what the thing when people I don't think they understand the size of the impact that's happening is it's not just in the media business, literally happening to every industry at the same time.
So it sounds I mean, it's clearly it's clearly star driven at the very top. You've got to have millions of followers and it's got it. You've got to have that personality. But it sounds like what you're saying is you can make a kind of a call it a middle class living, you know, a load to mid six figures with some savvy and obviously some success and some luck.
But that does exist, or you can.
If you look at it from a pure media business. Right, Media is media, Right, it has a power a lotl dynamic. There is ten percent five percent depending which VERTICALI like a thing as it correct has an outside control of what's going on. The difference in the creator space is that you can, to your point, you can build a middle class lifestyle. I mean just even in Jellysmack, I think it's about eighty percent of our clients have made over two hundred and fifty thousand dollars, and we're an
ancillary business to them. We're not their core business. You think about that like that, I think something like five times the size of the media and US income, So it's not small dollars. And again as an emerging market, right with ever growing consumption, ever growing creators coming into it. The thing we know that happens as markets like the middle class just starts to scale, right. I often tell
people like it's kind of like China. People used to question twenty years ago, is China ever going to get past the power al of the concentration on top? And clearly we know the answer to that. The answer is yes,
is there middle class the size of the US middle class. No, but will it be yes, And the same thing will happen in the creator space over time, just because it isn't only playing in the media space, right, because if you're playing in the larger economies, know, ultimately you're talking about essentially the creator space will impact everything in the GDP. So it's hard to argue that that's not going to have a pretty tremendous mid market impact over time. Yeah, there's correct.
Let me ask you, and just to boil it down, Jelly Smack fundamentally offers people like crucial marketing and distribution support.
Would that be a fair character? Yeah? O.
The way to think about it is that we are a detection engine on AURA that finds creators who are most likely to have their content either distribute to another form of monetization or another platform. We got our beginning because we're actually founded by three creators who are huge fans. I always have to clarify this from my American ads,
but football European not American. And you know, back in twenty sixteen when they founded a company and social video isn't what we knew it today, they had antypothesis it would become what it would be today low those many years ago.
Business moves fast.
When we were both twenty the they thought to like, oh, I think this is going to be a big opportunity, but I also think that technology will be a big way to grow it. And so they built to about four billion streams in multiple verticals. So they started in football, which I always said, and so the next logical one they went into his beauty because that's what sports guys do with the video gaming entertainment. So they really figured out how to build content by identifying the type of
talent most likely to resonate across these platforms. That technology is what other creators started coming to. Initially for Jelly'smack go like, Hey, I'm struggling as an entrepreneur. I have I'm completely dedicated to the algorithm and distribution of one platform. I spend every waking moment trying to speak to my
audience developed this business. Can you give me time, effort and efficiency And so the big thing that Jelly Smack ultimately says when we partner with our creators, like, look, it's a big back end in terms of the tech we can bring it. At the end of the day when we give you is ability to de risk and move your content to multiple platforms and ultimately expand your business so that you can be not dependent on just one source of income.
Yeah, which versification is the standard? Is the standard business across me?
So let me ask you, is there there's a selectivity on your part. So there's also a talent almost a talent scouting it's correct part on the part of Jelly Smack.
The way to sort of think about it is that, you know, I always like to use analogies that our own creators have used for me when they explain our own business, and like, oh, that makes sense, I'm going to use that. You know. One of them said is like, look, you're a little bit like universal music. Right at the end of the day. You sometimes find them when they're
busking in a subway, right. And we have creators we found and we had like five fifty thousand subs and we turn them into multimillion revenue companies in a matter
of like months. And then we have other creators like mister Beasts or who have such scale or called the Taylor Swift as is the universal music, that have such scale that they could kind of do if they wanted to the complexity of what we do for them, but they're like, I need a partner who has scale expertise, and so that's really the best way of talking about Our detection systems are kind of like an A and R group that are trying to find the talent, to
identify where they're most likely to be successful, and then provide them to services to help them scale.
What I'm hearing you're saying is that you do a lot of matchmaking. If you somebody that's big in the beauty space, you find the beauty people and try to try to bring that right.
Now, you want to identify what the most likely thing is because is interesting is that people ask us a lot like what genre should I be in? And there's actually kind of not an answer to that because it's like, well, it depends on.
What you can ask that question.
You may not be built to be a social media.
The thing is all artists have a spark of something they want to communicate. So I say, start there, what are you? What do you want to do? I said, Because again, the thing that's fascining about the creator space,
like we have we have creators. Charlottever is a great example of thin unbelievable talented community and absolutely talented writer, absolutely incredible on camera, and but it's so successful in our creator space, she's literally funding her own sitcom, right, But you think about that from an empowerment of the creative and an attachment to the autist with that sort
of changes in the dynamic. But at the same time, we also have people in our thing and actually one of the one the stream is right who do Invisible People People is a five h three C charity and just by passionately communicating about homelessness, which you would think is not something I if I went to flon I want to do a series on homelessness, they can be like, yeah, no, no,
it's going to watch it. But yet this person's found a way to use the storytelling about the impact of homelessness around the nation to build a large viewership that is powering a business that's solving the problems that is covering, but you wouldn't necessarily think about it as an entertainment vehicle.
Right right. That's interesting.
Can I drill down a little bit in terms of Jellysmax business. Do you work on like a commission basis? Do you work on a fee basis.
With yes the answer because we play in so many different lines of business and so many different verticals. So you think about it, we go from helping you identify an ID eight to all the way to distribution, marketing, promotion, infrastructure, financing, so we basically play in the whole value chain. For some of our creators, most of our products we have a shared revels new model where we take the capital risk on their behalf and then sharing the upside so
that we keep our interests alive. But all the cases will take like a rev share of some sort of split that we do. It's typically, I would say the model it looks more like is probably like consumer products, where essentially we have a relationship over a period of time, where we have a licensing relationship up to some of their intellectual profit or period of time, and then we help them monetize it.
How many people do you have with jelly'smack now? How many employees?
We have about five hundred people in our major centers are Paris, where the founders are originally from London, New York, Las Vegas, and.
La Don't even think of scrolling away. We'll be right back after this break and we're back with more from JELLY'SMAC president Sean Atkins.
There's so much right now you know in the ether about the about the biggest of social media platforms.
Obviously the you.
Know, the site formerly known as Twitter x has been making a lot of moves. Where do you feel the Google's, the Facebook's Youtubes? Where are they right now in this moment of the creator economy? Do you feel like there's an understanding that this is really starting to become its own big thing unto itself.
I don't think they're really having a sudden epivity. They've known for a long time, and you thinking about face, I guess YouTube. They've been paying out billions and billions of dollars to creators on an annual basis for over a decade. Right now, you know, Facebook is on a pace in a uh you just last announcedlash your reels as a products is a year old and Mark just said it makes ten billion dollars in revenue. That's like
it's a pretty incredible ramp in one year. So it's more that they know they have a significant dependency or symbiotic relationship depending on whose side you're asking you what day in that dynamic and trying to figure out look their business. They're trying to figure out how to maximize their margins by leveraging creator content, and creators are always trying to figure out how to sort of maximize their margins against platforms who have a little bit more power
than they do in the dynamic. I think that for creators, their biggest concern in the grand scheme of thing is we sort of pain we saw. I was like, how do I manage multiple platforms at one time? And then sort of what is always platform uncertainty right that they their equivalent of in the television business or feature film business, like your film doesn't work? Is a platform changes this algorithm? One day? You were making success one day and the
next day you don't. Saw this happened with YouTube actually did it to its own business this year, where it's like, I'm so worried about TikTok, I want to move a significant amount of my traffic to short form. Right, So you saw very significant players who are making millions of dollars a year be like I just lost thirty percent to my bottom line. This is a period of time. This is a sequence of time. So I think more of the debt it's creators are trying to navigate platforms. Well,
platforms are mostly trying to figure out two problems. One is how do we manage in a world where we have a lot of like competition from other platforms because people always assume they're like once YouTube, Facebook control things,
nothing that's going to be around again. And the TikTok exploded, right seven years another platform comes are right, it comes, it comes along, so right now, I'd say the video platforms are all trying to figure out what do they do about short form, right, and they're all doing different levels of experimentation. I think that obviously TikTok TikTok is doing with its systemic issues of like, well we're going to be banned, are we're not going to be banned? Or what's happening with us?
How do you see the kind of the dials going between the amount of time people are spending on social media on TikTok just purely watching on creator platform you know, creator friendly platforms.
There was a day where ninety percent of ad revenue into newspapers. Yeah, yeah, because that's where attention was, right and so it is in our that attention is moving to social and to the creators, right. I think the last thing is not like if you look at the number one television network on televisions today and I'm closing like the spots is YouTube television, not YouTube television the cable. It's like YouTube the app is the number one television
network in the world. Right, And you're start to get TikTok and avods and spots and fashionannels and all that stuff. So that's only going to continue. The second thing is, and this is what we have a generational shift in consumption. And that's one thing. But we're not at a one gen We're now two generations into the shift. Right, So people like me who are early adopters of digital consumption, I have four teenagers, right, they only lived in a
world with totalitarian control. And if you looked at the interests of my four kids of what they watch, they have like nothing in common. Right, Like, sure, we'll sit down where you know, we have a tradition as a family we love Survivor. We sit down when it's why do we watch Survivor? But the other ninety percent of the time I picked up my phone and I showed
you what my kids are watching. Right, you'd be like when kid's watching video game playthroughs, another one is watching beauty hacks, another one just watches funny memes on TikTok. That means that the that it always lags the advertiser dollars always lag, but they always end up where attention is. And so that is and is we're only debating what
the timeline is. And it reminds me I suspect you recall this, remember when cable first started and they would talk about most of the attention is moving every year to cable more cable, but you see how much the monetization was, like yo, but like, oh, the super Bowl is getting you know, you're like why is And cable to this day still cable systn't fully monetized at the level of attention that it had versus broadcast. But it's like ninety sid of the way there, and so the same thing.
Just going down and starting to on that other side.
Yeah, cable is the one I might argue might have one of the heaviest morphs in the space versus a lot of the other industries.
Yeah, it is, and it's such a it's you know, it's almost been whiplashing in terms of it was you know, it was the way for the.
The greatest, the greatest cash machine, like by the way I started my career espace.
But I think I think there's an like around nineteen eighty to twenty twenty is a bookend of of an earnings machine that we will probably not see the likes very soon. But but you know, even as we sit here and speak it, in twelve twenty four months time, somebody could have come up with something that you know, blazes a trail that we can't even that we can't even conceive of.
Now that's how fast look and innovative this space is.
People talk about the machine or Cable, right we really break it down into a financial person. They're talking about the amazing margins that cable kicked off. Are you talking about forty percent margins? Right where it's a production company might t fifteen twenty percent. The thing is like, if you look at creators, I look at creators doing forty fifty, sixty, seventy percent margins. It's incredible what these businesses are doing
is why I always find it interesting. Look when I was at MTV and people come in pips like I found this new creator. Let's let's have them pitch a show, and they picked unbelievably wonderful creative and then you'd show them the economics of the deal you want to do with them. I'm like, let me get this straight. I do whatever I want creatively every single day. Yes, and
all the money accrues to me. Yes. But if I come work for you, I got twenty people giving me notes every single thing I do, Yes, and you're gonna pay me like one one hundredth and I own none of the rights. Yes, why would I do that? And so that's the other thing I think people don't understand about their creators space. It's like, yes, there's creators who want to do a traditional thing and this is part
of their story one hundred percent, I said. But I think the other thing that people don't understand as a lot in fact, you remember the person who won that Show of the Year. What she talked about is like, I am making something that would never be green lip. That is an audience bigger than something that's never been green lit. Yes, with seven people.
Michelle Kane of Challenge expected.
Correct, and she's right, that is a minimum at least a cable caliber quality show.
Yeah, it's right. Dare show which would have not been.
Green lit, and she owns all the rights, had all creative control as full relationship with So that's what I think is really empowering to the creative class is that you have this incredible thing that I don't think it's an or. I think it's an ad. You can have an ant. Yeah, you can have your creative passion and be monetized and have a middle class lifestyle, and you
can do the traditional route at the same time. It doesn't have to be you have to be one or the other, or one is dependent on the other.
And in a world where streaming licensing deals are changing quite a bit, they're not quite as rigid as they have been. Somebody coming in with I own the format. I own every stitch of every minute of content, every frame. That person coming in, if they do want to do a more traditional TV deal, is going to have a lot more clout at the negotiating table than somebody that only you know is only a star in their own show.
Well, also, you have to transition that I still remember when I was first started working and lef when reality TV started, right, people are like, Uh, that's never going to be thinking it's not going to be thing. Right, But that was the explosion of case production companies. So which and again it is roll up of those cable production companies. They're the biggest television production companies today, right, Fremantle, ITV, whatnot.
I said, but all of those companies were built in a world where a broadcast hour was like four to six million dollars and then cable companies like I'll pay three hundred thousand bus and people like that's impossible, you can't do it. But you saw like a ten times the same thing's happening in digital. Right, You're just saying the cost of production is coming down, but they'll to lack the ability of having creative talent on a global
basis to be able to service that. And so what I think one of the interesting opportunities for the traditional channels that are getting squeezed on the cost side is you're going to have like a nut like the cable class came in, can produce what became the reality burned and sort of help with that cost structure. The digital teams are going to come in and have that same thing. I was like, okay, well I could call a creator to your point and like I can get eight what
looks like one of my primetime shows. I'm not paying five hundred thousand an hour anymore, I'm paying one hundred thousand and so I think it also the creator ecosystem, and they're that class has an ability to help the traditional side to make sure that the kind of volume of production is not going to go away.
Yeah, I mean you're seeing there, you know, pulling a lot of personalities are coming there. Do you sometimes advise people on you know, how that they shouldn't spend too much on this piece of content? Do you do you advise people sometimes on the margins, like if you you know, if you do this to make it look good, you're going to have to put in this much.
Yea product justice, we.
Have tire again, an entire tech team that's analyzing, uh, what works, what formats, what lengths, what time on period? And it all goes down to even you know. One of our most frequent acquisitions, Network Media, is an entire entity focused around us where they actually focus on finding
what I call entertainers. So not like not necessarily a kid, I was playing video games and I became a Twitch creator, but someone's like, oh, I was a a circus entertainer or was a musicians like I want to get into digital thing. And what they do is we teach them and train them using all of our data, all the best ways to make sure to make content that entertains for the platform that you're on. And it's all completely data.
I mean, they literally get a training update every single day of literally what's working.
Thank you so much, John, I really appreciate you letting you know, letting me lob questions at you and telling us about your business.
And it's a very fascinating.
Space and we definitely I definitely prize I call my tour guides to helping me understand this. I know it's important and I know it's important that Variety be on top of it.
So thank you for helping me do that.
Appreciate it.
Thanks for listening. Be sure to leave us a review at Apple Podcasts and Amazon Music. We love to hear from listeners. Please go to Variety dot com and sign up for the free weekly Strictly Business newsletter, and don't forget to tune in next week for another episode of Strictly Business.
M M
M HM