YouTube Star Phil DeFranco Talks Revision3 Deal

Plans to launch a new channel roughly every 3 months

If you don't know who Phil DeFranco is, you probably should. DeFranco is huge on YouTube—like 2.6-million-subscribers-1-billion-views huge. His channel SourceFed, which blends news, politics and humor, is often cited as the most successful of the much-hyped YouTube funded channels. DeFranco recently expanded, launching SourceFed Nerd two weeks ago (it's already over 1.3 million views).

On Thursday, it was announced that Discovery Communications' Revision3 (a pioneer in Web video programming) fully acquired DeFranco's collection of channels, along with his merchandising business. He'll stay on as a programming exec. 

DeFranco spoke to Adweek about the changes:

Revision3 had already been selling some of your ads since last year. What's the motivation for a full-fledged acquisition?

The ad sales relationship had been fantastic. But there are a lot of things I want to work on and start. We’ve only been launching channels on YouTube. We just launched SourceFed Nerd. And for a space that moves so fast, that doesn't seem nearly fast enough. I'd like to move four times as fast. I'd like to launch a new channel every three months and give it all the love it deserves.

You really want to launch four channels a year?

All I have is … ideas. Money is the limiting factor. These guys understand how to integrate ads properly. With Revision3, i’ve made more money than ever before. They've built a YouTube net that i really wish had been around since I’ve started. They have the back end. I have merchandise and production.

Does that imply that other MCNs (multi-channel networks) on YouTube don't work well?

My thing is, if you have 10,000 people in your network, how can you actually help them? The focus, it’s not there. With Revision3, you don't have to go to a third party and [risk] getting ripped.

What is it that Revision3 knows?

They are great at brand integration, and just giving us resources. For example, with SourceFed Nerd, we've been able to produce good content, get fantastic hosts, get early access to things, and they have a great ad sales team. Besides traffic, I always say that money is the hardest thing to get a hold of on the Internet. And they can help us monetize niches really well.

Is this a validation of the YouTube funded channels strategy?

I think the $100 million or whatever YouTube spent was spaghetti against the wall. Now there were actually channels they built that resulted in fantastic shows. Like Redbull and Vice. But the thing is, what worked was already existing personalities from the Internet and those were expanded. One thing I learned is to get great people. People [in the audience] are going to crave you if you hit. But you can’t scale.

Why did SourceFed work so well?

I think it’s just … there’s an appetite out there. It's still pretty close to my original content. Just more hosts and the length of videos was bigger. We've been trying to figure out, how long does someone want to want the Internet. Now we’re doing 30 minutes a day. The best advertising on YouTube is to continue making videos.

Is translating what you do to advertisers who don't really watch a lot of YouTube still your toughest challenge?

Education is always the game these days. I went to some of the NewFronts. At YouTube's event last year, it was "look at our celebrities." This year, it was "look at the home-grown talent." That was a smarter move. But it's hard to sell that as "this is the next big thing." You're asking advertisers to give us their baby, and that can be scary. It probably will be for at least another two years. And for most part we get it. Our audience understands that these people are helping the show. Our biggest successes have actually been starting brands out in cost-per-acquisition deals. It's a low-risk way for them to get to know us.

Will we see more of you on TV?

I think the big thing there is, not necessarily aiming from get to to make a Web show that is meant to go to TV. We have to figure out what that marriage is. It's slightly different content. I think the relationship is there.