Where you been at Big Dog where I've been at I had Christmas bro in 2012 Ray William Johnson was the number one most subscribed YouTuber on the platform, which sounds like a great accomplishment, but it made him a Target Ray was in a feud with a merciless, greedy, and borderline evil company that was actively trying to leech every last dollar from big and small YouTubers all over the world. some of your favorite creators were victims PewDiePie Moist Critical Philip Def Franco just a name a few. The ironic part is that this company dubbed Maker Studios was founded by other popular YouTubers It really be your own people However, the true king uh I don't know these people. Pin of the Maker Studios mob was a man called Danny Zappin, a federal convict who got out of prison and exploited the untapped Gold Mine of YouTube money.

However, despite Ry's Valiant efforts of exposing the evil tactics of Zappin Company, it wasn't enough. Maker Studios would go on to sell to Disney for over half a billion dollars. This dream team Guided by the vision of a federal convict, got filthy stinking Rich at the expense of hardworking YouTubers around the world. This is how they did it YouTube Launched in May of 2005 Danny Zappen AKA Danny Diamonds was one of their early users because he was on house arrest with nothing to do but browse the internet all day in 2000 Danny moved to Los Angeles to be an actor but failed.

He claimed it's because he confronted Hollywood's Gatekeepers after being denied multiple roles and they black because of this Zapp needed money so smuggled easy, got caught and was sentenced to 2 years in prison Danny began uploading videos to sites like crap TV before he was arrested. so YouTube was like a shiny new toy when he got out. YouTube gained 30,000 unique users a day after its Beta release in May 2005 and by the time it officially released in December of that year, it would reach a combined 2 million total views a day and by the following month 25 million. Then YouTube reached its first 1 million viewed video which was Brazilian soccer player Ronaldinho receiving his golden boots in a feat of marketing genius Nike uploaded the video under the Alias Joe B as if it was any other YouTube user instead of the multinational sneaker conglomerate.

The advertising potential was looking extremely promising. Purch: YouTube for 1.65 billion within a year of their launch. With such potential for money to be made, not only did established companies get involved, but opportunistic creators as well. It's no secret that creators always have and always will be the foundation the backbone of what makes this site amazing.

YouTube Content in the early days consisted mostly of just things related to Club Penguin classical music masterpieces, really bad tutorials, more memes, and Soulja Boy but sprinkled in there were creators who made skits, storytime videos, theories of the universe, news channels, and the First YouTube influencers were starting to gain millions of views on their videos. YouTube then launched their partner program that pays a percentage of the advertising Revenue when ads are shown on their videos. Most creators at this time treated YouTube like a fun hobby and not a career path. However, people like Danny Zappin saw an opportunity that he knew he could exploit.

Danny told a few other creators about his vision his girlfriend Lisa Donovan her brother Ben Donovan as well as Shay Carl and CM G who were all YouTubers One night they all got together for a brainstorm session and laid the foundation for what would become Maker Studio I think Originally the idea we were all content creators and there are few others and and the idea was if we could come together and share audience and build an infrastructure we could all scale and build you to what it is to I made videos but I didn't know how to do other things like I wasn't a great editor and I didn't know how to like you know, shoot things and and Maker gave me a place where all that was handled and all I had to do was just try and be funny and that working together you know you can help one another you know and I think driving audience to one another and helping new talent that hadn't been established grow in audience I think was really exciting. They essentially came up with the idea for a studio to share resources and talent similar IL to Hollywood Studios that have been around for a hundred years. Danny Thought this was revolutionary, but the idea was nothing special. Most people didn't know why we were founding Maker and we couldn't get any of our actor friends to participate.

The most popular YouTube content was lowquality webcam videos of people with simple ideas and a lot of Personality Why do they need a professional studio? Well, the answer was they didn't and even 15 years later, many of your favorite creators today are just people in their room coming up with stuff. But Danny had a plan and step one was to create a success story to prove this could work. Danny and the group launched a collaborative Channel called The Station which even included Shane Dawson Philip DeFranco and Hi I'm Ron. Maker believed each of those Stars could be used to direct fans to new artists, which inspired the company to build a network of Affiliated channels.

And they were right! They had immediate success with hot Girls on Teen Cribs amassing 60 million views. Yo yo y what's up M my name's Arel Welcome to My Crib oh I Remember this actually I Watch meet my less attractive friend Jasmine She's super ugly, but don't hold it against her. The Station established an office space where they would connect during work days to plan, shoot, and edit the content. They recruited more people to be a part of the team.

Andrea's Choice What a Day Derek CES Fine Bros Who changed their channel to react Michael Gallagher From Totally Sketch Timothy Deetto the list goes on and on. Their main type of content were comedy sketches similar to college humor but way worse. I've been working at this bar for two months now and I got to say these people are really into their craft beers. Can I get a pooch daddy? say song? you guys got any blue caboose barley wne one doppelganger Doppel Box hey teach do you do I Want do you splooge I Would never you should Splooge is the new cool thing.

Most of their humor was extremely loow hanging fruit, men dressing up as women, playing on racial stereotypes and trying to make anything as sexual as possible. 99% of this content aged terribly, but this was a time where the edgier you were on YouTube the more views you could get. guys I got chat guys early day YouTube it all aged poorly. There isn't a lot of things that aged well.

chat because skits were people haven't seen that before. So people did like the really basic skits or whatever and it was really good at the time because that's all we had. So now skits kind of evolve. Now they're really good.

and they're They're more like you know, but at the time it's on. AB Kenny to see what they think about what's happening with the recession. Danny's Zen was pretty much the only person at the station who wasn't on camera. That's because he was too busy figuring out how to get r Danny realized they had a money problem.

They had a group of 20 or so creators with millions of subscribers and they were generating tens of millions of views per month. but the ad revenue from the partner program wasn't enough. You see, the partner program in 2010 was not even close to what it is today. It was only available to a select group of very popular creators who had to apply and be accepted, but even those people weren't making significant money because the percentage split was terrible.

The only way to make more money was to get more creators involved, but the studio only had so much space and employees to provide services to creators. Maker Studios For so there's MC yes, I say MCN there's MCN Chad but Machinima was different. I I Think they acted like an MCN but even more than that, they were also like in control that it was a little bit more than MCN. I think a multi- Channel network or MCN instead of only working with the in-house creators at the station maker would try to discover Talent all over the world and sign them to the network in exchange for 20, 30, sometimes 40, or 50% of the Creator ad.

Revenue Keep in mind YouTube would send the entire Su of the Creator Revenue to the MCN. The MCN would take their cutout and send the rest back to the YouTuber. That's like your paycheck going directly to your landlord. He pays your rent and then sends you the rest.

It's hard to understand why anyone would be willing to give up such a large percentage and control of their income because if they're in a network with all these millions of subscriber massive view, YouTubers they could get like some residual and they think guys, if I'm a small Creator I have no opportunity, right? if I'm with these guys, yeah, I'm losing 50% but I'm going to get more views I'm with these now I'm with these guys. We're part of the team. That's the dream they're selling to them. Most creators just didn't know how this business worked and that's where Danny knew he could exploit it.

However, Maker did provide some real value. First of all, Maker could get any channel who signed with them instantly monetized. The partner program was still limited access at this time and Maker had Direct connections with YouTube Since it was comprised of the most popular creators. you also couldn't monetize gaming videos unless you had a partner.

Network Because video game companies would copyright claim videos using game footage, Maker even had music label connections and music creators could use copyright music or make covers without getting claimed. YouTube Support was notoriously terrible and still kind of is, but Maker would provide you with a dedicated team member to help you with all of your YouTube related issues. You even needed to sign to an MCN just to make custom video thumbnails. By April Of 2011, Maker signed 150 channels that generated 325 million views per month.

One of their signes was the number is the basic Services work the way they're meant to. You wouldn't need to any of the services. you wouldn't need to have thumbnails because you should be able allow for everybody. You shouldn't need a company to talk to them because they should respond to your emails and but you just had to because company's it was sh one most subscribed YouTuber on the platform Ray William Johnson Their roster was very impressive with Ray and many other top creators, but Maker still didn't have enough money.

So Danny raised 1,524 1999 from a venture capital firm called Greay Croft Partners and if at this point, fans still had no idea how serious this operation was, because the station's content was still just as unhinged as ever. All of the creators that signed to Maker were free to be as creative as possible, so you couldn't really tell there was an infrastructure around it. That's probably because it was still operated by creators who genuinely were interested in making videos rather than making money, but Danny was not operating in the interest of fans. Maker Studios was not taken seriously by the entertainment industry.

They weren't respected and that bothered him. He needed to legitimize the company YouTube was known for lowquality Content which didn't excite investors. I think the next stage that that YouTube will eventually go to is what Netflix is doing I think they'll step up and they'll start doing quality content and programming. um in the same manner.

that's not you knowre Annoying Orange is huge and it's great. but you know the production value in a lot of and I'm not knocking them. but the production value everybody the majority you everybody was wrong. they were wrong the whole time, still wrong and even after that still you guys say they did okay okay okay they did a YouTube uh pre.

what is it guys is is that the YouTube exclusive series creators YouTube Originals that that is garbage bro YouTube red or whatever or YouTube bro this shit's garbage. nobody watched that what are you talk about videos is not there but I think once they step up to to that next level and I don't know what your plans are but good OWN Network Just like Netflix and all these others that you're going to see popping up. So Danny wanted to make their company as big and legit as possible. By mid 2012, they signed over 2,000 new channels and had viewership in the hundreds of millions they leveled up from their previous makeshift office space to a now 40,000 ft series of buildings.

in Culver City they grew to 260 employees, a group that includes advertising sales Business Development and tech people. Maker tried to create animated series and shows that could be formed into movies, traditional television shows merchandise Etc but their most popular signes were still just regular. YouTubers created what looked like a very successful Production Studio with multiple different departments servicing their C when in reality it wasn't being put to use and out of desperation Danny Zappin made a critical error. most of Maker's money was coming from their top few creators.

Ray William Johnson This guy okay, maybe he going explain approached Ray and said Maker needed a bigger cut of revenue from his online show equals three. He asked Ry to renegotiate their existing contract eight months prior to its expiration. Ry said the terms were incredibly aggressive. They wanted 40% of my YouTube Channel's AdSense Revenue after production costs and more importantly, they wanted 50% of the show's intellectual property.

in perpetuity and perpetuity means forever. He refused the new terms of the contract maker Studio took offense to his refusal so they threatened to shut down his projects when I politely refused their deal as it was brother, they the company attempted to renegotiate their own deals with him eight months ahead. CH Guys I've never heard that Anyway, Insane. Not in my best interest.

They became increasingly aggressive. Negotiations quickly became a bizarre pissing contest between the heads at Maker Studios and myself and I wouldn't hand over my intellectual property and they wouldn't stop aggressively trying to get me to sign it over to them. On top of that, Ray claimed that they would not give him any of his AdSense money because remember, it all goes to the MCN before the Creator. Now in the near future, Equals 3 will no longer be part of the Maker Studios Network So I'm going to film here for a while, even if I don't have the proper equipment at home.

You know, even if I have to film butt naked in a back alley, you guys are getting a episode. Godamn it. After Ray William Johnson announced his departure, Maker Studios released a petty public statement Ray is still part of the Maker Network However, with the recent decline in viewership on Equals 3, it made sense for him to go back to producing the show himself. Maker providing a full production staff of 12 people, including a team of writers was no longer a viable option for Equals 3.

Ray Vly denies that he ever had 12 people and writers working on his show, nor was his viewer declining. Yeah, I was about to say yo CH his didn't decline. it was always. It was always high, it plateaued and it was like this but like super high up it.

it didn't decline. It deined way way way way way after when he offloaded the project entirely. I Think to a meeting to resolve the issue where the CEO promised to return Ray's YouTube AdSense account to him. However, that never happened.

They haven't made reasonable attempts to give it back to me. They are now even trying to leverage my own AdSense account against me so that I will sign over all your favorite Martian intellectual property. Avoid my stock options in the company and sign a confidentiality agreement to never tell the truth. We wouldn't know about this hostage situation if Ray didn't post all of the information in an article published by New Media Rock Stars.

The other thing that he revealed to the world was that Danny Zappin was a convicted felon and that he was waiting for his criminal record to be expunged so that he could officially become CEO of maker. The excon texted Ray at 1:00 a.m. and said your lack of integrity and character are sad you prepare for war B Ray tweeted that nasty text that Danny sent to him and then Shane Dawson replied with I got the same text three years ago. That makes no sense.

they're the company They made the contract they tailored for him. They went out of their way to get him part of their project. Why the why is he mding? It makes no sense, which is interesting since Shane Dawson was a part of the original. The studio crew then seemingly disappeared Philip DeFranco said there's a theme Here seemingly hinting that he has had the same beef with Danny Zappen.

Then the final Bros also implied the same thing CM G seemed annoyed at Phil for speaking up. Philly D You feeling okay CM G Just wondering how you and your guys can sweep this one under the rug. This was one of the first big pieces of drama that YouTube had seen. Shay Carl immediately defended Danny We're not the type of people that is going to try to like keep money from somebody or hold Ray William Johnson's AdSense account hostage.

Um, that is definitely not our intention and that's not not Danny Diamond's intention and that's not Maker Studios Intention I am proud to be part of Maker Studios Maker Studios has done a lot for a lot of YouTubers They have made it possible for over 350 people to earn a living if something is a reality. what the if it's the intention you can fix a problem, say oh ex the intention then then that that that's worth that's worth nothing in this YouTube space. People like my brother and my sister have medical benefits because of Maker Studios because of people like Danny Diamond and Lisa Nova and uh, a lot of YouTubers countless YouTubers would not be where they're at today. Me included me, especially if it wasn't for Danny Diamond's idea and passion for this company.

It's no surprise that Cassum and Shay rushed to defend Dany as they were two original Founders who were set to make a ton of money during the sale of Maker whereas Ray Shane Philli and the Fine Bros were not Founders But the people who had the most clout that made Maker famous and at that time were bringing in the views to boost the company's portfolio fans didn't know if they should support the that's why they wanted to avoid his stock options just before they would sell it because they wanted to get more money so he wouldn't get uh money out of his stock, right? The creators who had nothing to gain by outing Danny or support the creators who founded the company set to make millions of dollars because in the middle of this drama Time Warner acquired a percent stake in the company for $36 million in December of 2012 and other contributors like Canal Plus and Singel have also provided 26 million for a combined total of $61.44 million. Danny Zappen successfully built his company to be the corporate Enterprise he envisioned on house arrest. Now he wanted to take his money and run in April of 2013. Danny Zappen asked to leave the company, cash out his stocks and received 6 months of pay, but he was willing to stay on as an adviser.

The board had a meeting and authorized his departure, planning to replace him with Enan Ch, a successful businessman. However, Danny very quickly changed his mind, demanding a senior executive role in order to save the company when it was denied. That's when Maker board member Mark Suster claimed Zappen became hostile. Zappin would file a lawsuit against Maker and claim the now CEO Christ and the board hatched a plan to take away Zapp's power and shut him out of the company.

I Guess Karma got the ex-convict badly. They gave him the same treatment that he gave Ray William Johnson 4 months earlier. but Danny made the right choice. He learned from his mistake as a failed drug dealer.

you need to quit while you're at the top Danny Knew the MCN industry as a whole became worthless on April 12th, 2012. YouTube opened their partner program to anyone in the top 20 countries that use the site. Now you no longer needed an MCN to be monetized. You didn't need an MCN to make custom thumbnails.

They would not protect you from copyright claims even though they said they could. You don't need unfortunate the time you you still need an MCN. Even with all this, most still want MCN but MCN became less aggressive. Okay CH I I was part of MCN and they took 0% Uh wait, how much was it I think it was Zero I Did I get scammed? No, they they took nothing.

I I I was with curse how muchis need a fancy multi-million dollar Studio to produce videos in your bedroom? Maker had way too many creators signed to their Network to provide services and support to all of them individually. So why would a Creator sign to them? Well, because they were really good. good at lying. Today, we have the benefit of hindsight.

We know how many independent creators have built legitimate businesses through. YouTube We Now Know that YouTube is somewhat of a stable career path. It's not just some wacky hobby that only Fringe kids do. In 2012, the future of YouTube was still unknown, so it was very easy for sales representatives at a big company like Maker to convince little old Patrick that he needs the backing of a major corporation.

But they even convinced large creators to join in December 2012. Maker was able to acquire the new number One most subscribed and viewed YouTuber on the platform. PewDiePie Once that happened, they acquired most of the YouTube Giants Epic Rap Battles of History Tobuscus Markiplier Jack Septic Guy to name a few. They quickly became the number one.

MCN By early 2014, they had over 55,000 signed creators to their network, but big creators like PewDiePie likely were not giving 10 to 40% of their ad revener, especially amidst their bad press. Some creators gave Makers 0% of their ad Revenue and the reason Maker took 0% was more devious than you could imagine. The fact that MCN received the entire ad Revenue check from YouTube then took a small percent or 0% before sending it to the Creator was crucial for their business model. It makes their cash flow look insane.

Hold on I was with full screen for a while I think they shut down I that was another company they shut down ibody shut down. Sending it to the Creator was crucial for their business model. It makes their cash flow look insane. Maker bank accounts were holding tens of hundreds of millions in cash.

MCN Used these numbers to convince investors that YouTube was an untapped gold mine and it was because of their content strategies. The other number they used to trick investors was views. By signing top talent, they were able to show how many views AKA advertisement potential they were generating every All Hands meeting was led off with the number of views they were doing. 10 billion views, 11 billion 12 billion.

But the reason the views were growing was because the network kept growing and we were just adding more and more channels. Also, Maker did not technically own the content that creators like Markiplier and PewDiePie put out. It was riddled with copyright material and couldn't be sold to other platforms. Investors did not understand YouTube at all, but they couldn't ignore the money.

In 2013, Maker generated $370 million in Ad revenue and 70 million of that was in direct sales. If you watch my previous video on Disney then you know that in the mid-2010s they were on fire. with every aspect of their business. Looking to take full control of every content medium in existence, they wanted to buy their way into YouTube and in March of 2014 Disney acquired maker Studios for $500 million with the promise of up to 950 million if they met their targets.

The final number ended up being $650 million. Original: Founders Like CM G, Lisa Nova and Shay Carl made a fortune. This is going to change our lives and the lives of my children forever forever. This will change my kids kids life.

The reason why I'm saying it's worth nothing is that is that technically if if the creators didn't actually like it and they were all going to either renot, negotiate or or or get out of their deals right and not resign right. all the money that they think the company is going to make, it's going to collapse because there was a lot of changes with the MCN Overall and things were changing people. People didn't need this anymore. People were going to get out so people knew it.

It was predictable that this wasn't worth that amount of money because it was going to go way down and and they did by trusting the vision of Danny's happen. Shay Carl got Filthy Rich He bought a multi-million dollar compound in Idaho and still uploads consistent vlog of him and his family enjoying extraordinary wealth. When the original Founders made this business, it was a humble idea, but it quickly turned into a system to make the business way more successful than it was so the stockholders could sell it and cash out, leaving someone else to handle the pile of trash and Disney had to take out the trash. They quickly realized they bought a business built off lies Disney didn't really do anything with Maker Studios they thought all YouTube creators would just become Disney Marvel and Pixar marketing puppets shoving Disney ads in young kids faces and a YouTube video and they honestly could have forced that, but they didn't Maker Executives complained of the slow integration process and that they didn't receive access to Disney's brand and intellectual property they probably didn't want.

YouTubers Destroying their IP Out of desperation, Maker tried to introduce new channels such as Polaris by Maker, a gaming channel. They tried to revive the station YouTube channel with shows like Casual Sketch, Song, Voyage, and Time Machine starring Timothy Deetto and Ricky Shu but these shows lack the personal connection needed to survive on. YouTube It felt corporate and soulless despite the downward. Trend They kept signing creators into predatory contracts, forcing them to be trapped in a failing business.

There are countless examples of creators expressing their resentment towards Maker and all other MCN that have scammed them, but the best example can be explained by none other than Moist. critical. And then Maker came along and said, hey, we'll offer you this contract It was a 60/40 split and at the time that sounded great to me. I Have never had any way of contacting Maker.

Their support line does absolutely nothing and if you don't have your channel manager there to be that bridge, then you just have no way of getting in touch with Maker. It would sometimes take up to 3 months to get one check from Maker was last year when my channel got disabled due to false copyright strikes I Could not contact Maker no matter what I did everything possible to get in contact with him. a contract shouldn't Auto renew. You should have to sign off on it each time it tries to renew.

Maker Studios is just so lazy, so unorganized and just doesn't give a about any of the people in their Network insanely UNF Money splits Oh guys I told you this before. Okay guys guys, maybe this is stand guys. Maybe this is standard practice. Okay and I'm I'm I'm just I just don't know.

Okay, but at Bro Bro Twitch is auto renew right? and um, if you want to, if at the time like this time want to renegotiate it, you have to. You have to give the intention 90 day ahead of time. So chat before. I Got my Twitch contract chat.

Hey, we were close to resigning it. We were close to the the line which it automatically renews right and I was like October 18th is coming Guys Twitch! Hey yo, it's time to negotiate Guys, Hey guys, it's time to negotiate right? And CH we were not even in October at that point, right? We're like in August Whatever. and they were like yo dude. Hey Listen, you have to tell us a 90 day ahead of time.

Okay, so uh, try again next year and I had to wait I had to wait a full year on the same contract dude bro I was on the grind brother on the same thing bro on it to Maker Studios is just so lazy, so unorganized and just doesn't give a about any of the people in their Network insanely unfair money splits, terrible communication, no assistance with copyright, and automatically renewing contracts that creators cannot get out of in a silver lining to a terrible situation PewDiePie stepped in and saved the entirety of YouTube his anti-semitic joke and Nazi imagery had Maker immediately drop him from the network Disney decided they could not take a risk on unpredictable YouTubers Any they cut support from over 60,000 YouTubers down to just 300. they rebranded Maker to Disney Digital Network and now the MCN business is pretty much dead. It's hard to know if Danny knew this business would be a scam from the very beginning. It initially started out as a humble group of creators working together to achieve a common dream, and within a short few years they were stronghold thousands of creators in evil contracts, forging their books to make themselves look successful and almost destroyed YouTube as a whole.

but I guess a few YouTubers got filthy rid so it's all good, right? I mean okay, might be a hot. It's still nice that Disney released them because Disney could have chat. they could have just said okay, um, we're just going to let this ride out and we're just going to write out the contracts right and then you can get out of your contract when your contract is over and people would G Getting scammed. Releasing them at least gives them a new option to get some to go somewhere else and do other which is I but respectable at least All right.

What what happened.