Over the last five years, there have been several content promoter channels which have grown rabid audiences into the millions on YouTube, instagram, or musical.ly.
Some of my favorites are Lyrical Lemonade, MrSuicideSheep, Trap Nation, Monstercat, and Flighthouse.
With their large audiences, these companies can usually gross at least a couple million dollars a year with ease. Cole Bennet and his Lyrical Lemonade are the anomaly and surely have a plethora of high growth opportunities at this point, including the recent festival they put together last week in Chicago.
A successful manager friend of mine referred to Lyrical Lemonade as the modern day MTV because their channel has become the dominant voice of youth culture.
For other promoter channels having great, but not quite meteoric success, there are two ways they can grow their business beyond the glass ceiling of generating a few million dollars a year. Both ways involve creating revenue beyond ad viewership by owning, licensing, or revenue sharing in intellectual property –
- Discover and sign talent via the platform – These channels can sign the individual records and release a lot of them or heavily on a select few artist deals. Both strategies have proven they can work. They can also create shows their audience will be interested in which can grow on platform, and even once successful, scale off platform (i.e Netflix).
- Evolve promotion capabilities beyond just uploading content to the point others are willing or even need to share in the revenue generation of their IP with you. Right now, it’s fairly common for a label to allow these channels to generate the full ad revenue of their upload. But the channels could take it a step further by building out their promotional capabilities to the point labels were willing to cut them in on the record or even the artist as I’m sure Lyrical Lemonade has been offered numerous times at this point.
While most of these channels aspire to have bigger business, some do not. Would you if you were in your 20’s making $1MM a year and able to travel the world operating your business from a laptop getting paid for YouTube views?
Monstercat is one of the only companies in this space who has built their audience solely on songs they license. They only post content to their YouTube channel, which they share in the revenue across all platforms (streaming, sync, etc.).
Despite appearing as a promoter channel at first glance, Monstercat is a full blown record label and have invested into highly advanced automated technology systems for self distribution and accounting, alongside their burgeoning festival partnerships and steady growing publishing business (they’re even opening an LA office).
Many other channels are reliant on generating revenue solely on the platform they’ve built their following. These channels typically have a limited window to evolve their business model. For example, if they start their label in year 6, they won’t own thousands of licenses like Monstercat for quite some time. Furthermore, their fanbase may not be as passionate as year 6 as they were in year 2.
Since Monstercat has licenses for all their content and therefore more than just eyeballs, the company is more valuable than most of the other channels. While not every channel is capable of growing their audience without utilizing content they do not own, there is still a lot to be learned from the Monstercat model.