0:00 Yo, did you guys ever like get an email in your inbox that like literally made your stomach drop? >> Yeah. >> What? >> So, we got this email. This is back uh during the uh MCN days, which is like multi-channel network. So, for people that don't know, like I would say maybe like a decade a little bit more ago, YouTube channels uh they would be signed to almost like a record label-esque type of system where like, you know, there's Columbia, Warner, whatever. And back then it'd be like Maker, Machinima, um >> uh the collective, bunch of all those companies. And what they did is they're the middleman that would uh be between your channels and then like the big ad agencies and brand companies. So, they would buy your views, your content, and then they would be able to sell that to the ads and directly like plug in um
0:50 commercials and stuff for the mid-rolls, whatever. So, a bunch of like kind of like very niche mumbo jumbo. Uh but we had a really, really good deal with Machinima back then. And >> I forgot what like the average CPM was, but ours was maybe like two or three times that amount. They gave us a really, really good CPM. So, we're like, "Oh, this is super sick." And then so, back then it was like when me and Joe were in our super entrepreneurial phase and really trying to like build out more of a company rather than just a channel. So, we're like, "Hey, can we extend this to a lot of these other upcoming YouTubers that um that that we know?" Cuz at that time, like I guess there'd be like the second, third, fourth, like the next generation would be like Jason Chan or David or even uh Fousey at the time. Like they were the next generation following up after us. And they're like, "Yeah, we could extend this whole arrangement to you guys. So,
1:41 it would be like a win-win scenario where um by signing with, I guess, let's call it the JK Network, these guys would make a dollar more on their CPMs than they would if they were just a regular YouTube partner. And then we would be able to make an extra dollar on top of their views. So it's like everyone wins and Machinima gets to grow their numbers. And we started building out this whole system so that we can now, instead of selling like, "Oh, this channel gets 1 million views a month because we have all these people, we get collectively 30 million views a month. Let's get the best CPMs possible, spread it all around." So it was like this really cool big initiative. And as we were building this out and it was going to be looked like something that was going to be pretty lucrative, we get an email from Machinima and this was just like out of nowhere, they have to pull the plug on the whole thing and they couldn't honor
2:31 any of the CPMs to any of the creators that they signed. And so now people are left scrambling cuz there's this kind of like uh no man's land period where if you're not plugged in with the MCN and if you're not directly tied to AdSense, you're just not going to make money on any of the content that you put up. But if you're like JK and you have like 20 people staff, where's the money going to come from? So you're like scrambling like a ████ Like how are we going to make rent? How are we going to make payroll? All that stuff. So when we got that email, it was a blessing in disguise where we didn't get that whole thing set up because we would have had to answer to a lot of people, but um it was pretty scary to get an email like that where you can see had we went through with this, our company would have went down, all of our friends would have went down and then we would
3:21 have had like a really bad name in the entire industry. >> Mhm. So like you didn't get paid at all like even once? >> No, no, we got paid. >> Oh, like you guys started yourself first so you guys had your CPM. >> Yeah, and we're we're crushing it and we're like, "Oh, you know, this is awesome. Like we're getting paid double, triple what regular YouTube people are getting paid." So now let's try to spread it out to our friends. So now our buddy who has like 50,000 followers at the time where YouTube AdSense might not even look at them, "Hey, I can get you signed on and you could already get money right away." >> then had to actually like be invited to the partner program. It was a whole process. Not everyone was monetized. A lot of people were just making videos for free. So, like that was a that was one one reason why these um like MCNs came to play because as soon as you join one, you could start getting
4:11 paid. Another one is we were getting guaranteed CPM. So, that's the big part of it is like if you if you go on YouTube right now, let's say you you know, you get monetized and you post a video, depending on what your niche is, you could have 90 cents CPM or you could have $20 CPM. So, that's that's the fluctuation here. But, at the time when you joined when they guaranteed paying you out like $3 or whatever it was, regardless of what they sold the ad for. So, I think where they went under is they made hell of promises. They had to pay out all of these ████ you know, you know, um promises, right? But, then they might have not sold the ads for what they thought they were going to be doing. And a lot of these ████ agencies, they get screwed like this cuz recently Cast Media was the big scandal
5:02 on podcasts where Theo Von like was it Whitney Cummings or some ████ like that? I don't know. There's like a bunch of ████ podcasters. They had a guaranteed contract with Cast Media. It was similar where they're like, "Hey, I want to secure you, so I'm going to guarantee you regardless if you get ads or not, I'm going to pay you X amount of dollars." So, what happens if the agency can't keep getting these ad contracts, right? They have to pay out of pocket because they're on contract. And then I guess like Brendan Schaub and all these guys were just like, "Yo, man, they were owing me money for like 4 or 5 months. It just kept racking up." And then they just stopped. They ghosted me. So, I'm like, I think these kind of things happen. >> Well, also too, the advertisers kind of got conned for a long time because like for example, you would be watching
5:52 say kids content, but they don't know that it's kids content. They just buy, you know, ads against this video expecting a certain amount of views. But then they're running a mid roll of a Jeep Cherokee ad to a bunch of kids. So they don't know they're not getting any bang for their buck at all and it took them a long time to catch up on ████ like that. So like, you know, YouTube scumbags like got to really get paid hard like before that all hit the wall. >> That's what I remember with Freddy W, his whole video game high school. I think Dodge Ram had a eight-figure contract with him. And I remember going, is Freddy W fans, are they Dodge Ram people? >> [laughter] >> Exactly. >> I was like, good for him though, that's ████ sick. >> Nobody got wise to it yet. It was >> How could they possibly profit? How many How many Dodge Rams do you have to sell
6:42 them recoup eight million? >> So what they did was they packaged the views, right? They packaged the views cuz they weren't exactly thinking about who they're reaching. >> of the views. >> Cuz it's usually like a fan of Freddy W that works at Dodge marketing. >> And then they get really bold and they pull the whole package together. >> Yeah. >> It was a huge con job for a long time. >> I feel like it only just now started wising up like recently cuz they they did this thing now where they won't do short-term partnerships. Have you seen that? >> Yeah. >> Or like they started to do this thing where like finally companies are smart now and they know that when they do a one-off with somebody, none of their fans are going to give a ████ about the brand. So now they're trying to do long-term partnerships of like years. >> Yeah, build rapport. >> Yeah, so as he grows, so does your like love for the brand. Which is better for creators. >> Yeah, it's better for everyone.
7:33 Yeah. >> Cuz it takes time to even build rapport. >> And it's better for creators who are not so big cuz you know like all these people that have like like 10 mil, 20 mil and then all of a sudden they're talking about some new product they've never mentioned before. People ████ know. They they just go, "Ah, whatever." >> Yeah, versus like the scouting for somebody that you know is going to blow up, so you sign them when they're like kind of small. >> believe in you, so it's like it's like they're actually in the I guess like in the trenches with you. They're like, "Hey, we're going to start now." And then as you grow, yeah, it's great. >> I mean, think about JK fans, they ride with our advertisers all the time. Yeah. They're all They're always They go out of their way to be like, "I'm going to go buy this to save JK and all this stuff." >> us chairs even though they were breaking while we were filming. >> [laughter] >> You guys are the best. >> Dude, that's my favorite one. >> Yeah. >> Those chairs were so weird. >> [laughter] >> We all fell on the on them. Every single one of us.
8:23 >> We needed to have a standby mallet just to put the wheel back in. >> [laughter] >> That was crazy. >> And they would still be like, "Hey, where can I get those chairs?" Cuz they thought it was funny. >> Can't do this anymore. >> I know, I MISS IT. >> YOU KNOW, I ACTUALLY HAVE ONE OF THOSE chairs for my actual office. >> Yeah. Do you need a standby hammer? >> No, no. It it just The difference is we're abusing those chairs every single day. That's a completely You know, and the way we're doing it, too, like you never know when somebody's just going to start going crazy. >> it for like like commercial use type of >> Jitsu-ing with each other. >> And the carpet had cut ditches where the wheel would get stressed. >> just be no flatness in the room for no reason. >> No reason. But honestly, I really miss those chairs. >> I miss just going like that, dude. >> [laughter] >> I We still do it. >> I straight up miss like what kind of
9:14 random comedic cue is that in a in a talk show? >> Yeah, we don't do physical comedy anymore. >> Yeah. >> The slapstick nature of the chair breaking mid-sentence was so funny. >> it was a bit. >> I know, especially when you're like so serious trying to get a point across. >> And then you just start falling over. >> [laughter] >> He's the best, man. >> Falling out of the chairs is hilarious. [laughter] >> Dude, they just started just slumping cuz the wheel popped out. >> Dude. >> Whereas in this freaking setup, there's only comfortable seats in the whole room. >> [laughter] >> That's true. Which one of these two? >> This is the best one. >> This is not bad. I like this one. >> Dude, this is >> This one's fine. Eating my shorts already. I pulled it down before the take. It was down to my knees and then it's like all the way up here already. >> Bro, stop coming with ████ shorts for it to eat then. How about that? >> Oh, shorts turn into like boxer briefs quick in here. >> I know. I know. This one screenshot me in my underwear one time. >> get those suspenders that connect to your socks. >> [laughter] >> Yeah. So instead he sits there and they
10:05 just >> stretch more versus do a job. >> It is cool that people can see the tat all the time now or is it not cool? >> Double tats. >> Or is it not cool? Cuz back in the old setup they couldn't see the tats unless we picked them up. >> Yeah, like we got these 4K cameras for your mosquito bites. >> YES, SIR. >> [screaming] >> NEW VIEWERS ALWAYS POINT IT OUT THOUGH. IF A video goes like beyond our fan base, hella comments are like, "Why do they all have matching tattoos?" >> That's dude, that's hilarious. You got to go look it up, dude. >> Coming in coming into any episode with no context is hilarious. >> I know. >> Who are these guys with matching tattoos? >> There's at least once a month where somebody's just like, "What does that mean?" And I'm like, "F███." That means we're getting a new new people, which is awesome. >> It's like, "Do you have Do you have 10 minutes?" Cuz I can't just say what it means. >> You need some time. You're going to need some time, dude. >> I have a rehearsed story for this now to try and be efficient, but you can't just be like, "What does that mean?" Means
10:55 I'm afraid of everybody and walk away. Like it doesn't work. >> I just want to sometimes be like, "I went to Japan one time and I'm ████ gay." >> [laughter] >> That'd be sick. >> You know what I mean? Like Yeah, just play into it. Like that's what they think I'm doing anyway, so I might as well just play into it. >> [laughter] >> I went to Japan and I'm gay. >> Yeah, cuz you know, you just go one time and then you think you know everything about it. Like that's the ultimate white people thing to do. >> For sure. Yeah, you're definitely going there. You're putting a kimono on taking ████ >> Taking selfies with hella Yeah. Eating Eating Chinese food while I'm wearing a kimono. >> It's even worse if you say you went to Bali and got it. >> Oh, that's pretty bad. >> Even worse. >> And it's like you go there. You should go. You stretch your dollar. >> Sell the worst things. >> Yeah. And then tell them how much it cost, but then name a really high amount. >> [laughter] >> As if you got a good deal. >> It's a great deal.
// end of tape