Unlocking Value for Creators

At the Creator Economy Summit, The Information hosted a masterclass on the importance of access to capital for creators. In the masterclass, The Information's Sahil Patel spoke with Aaron DeBevoise, CEO & Founder of Spotter, Inc. which provides up-front cash for YouTube creators in exchange for access to their content libraries.

Creators are looking to obtain revenue faster than they are paid by the platform in order to accelerate business growth. DeBevoise says many are hiring support staff such as editors and writers who help elevate their content. The funds are also being used for production facilities including creators purchasing properties for shooting content. More conservative creators are thinking about long term growth and investing in a direct-to-consumer model.

“YouTube allowed creators early on to become full-time creators, but it didn’t allow for much risk-taking," DeBevoise said. "There had to be more cash than would just get you through the next month and it had to be significantly game-changing capital that would allow you to become almost unstoppable.”

Spotter has deployed roughly $250MM in about 150 creators to-date. Some creators have received multiple rounds of deals ranging from $50k - $25-30MM. DeBevoise foresees multiple million-dollar deals in the foreseeable future. Funding is not contingent to scale and viewership, but moreso the kind of revenue generated from channels. Industries of recent focus are children’s programming, sports, travel and fine art. They invest based on consistent channels with monetization strategies that have been running for at least one year. Most contracts are constrained to five year deals in order to protect against industry volatility.

How are creator content libraries valued? While there are no industry-wide metrics, Spotter focuses on engagement such as comments, likes, favorites, recommendation, watch-time, completion rates. DeBevoise finds recommendation traffic especially interesting, rather than just viewership numbers, saying, “Recommendation itself is an indication that YouTube believes the engagement you’re getting is satisfying the viewer so they continue to recommend it.” Other videos being recommended against the creators is also an indicator to them of a successful channel.

Ultimately, the value of these channels is closely tied to their ability to move products. Spotter believes that as they work with more creators who are more niche, the bet is much more directly correlated to direct-to-consumer and e-commerce than advertising. Their number one challenge, however, has been educating the creators themselves.

The Cash for Creators Masterclass was held in partnership with Spotter at The Information's Creator Economy Summit.

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