Samir Chaudry and Colin Rosenblum talking with Smosh founders, Anthony Padilla and Ian Hecox on The Colin and Samir Show:
Samir:
Memberships seem like a big part of your business model. I’m curious specifically around, like, YouTube versus Patreon, and how you guys made that decision. Because I think a lot of creators go through that.
And YouTube memberships, there’s a much larger cut that’s taken from those.
But why — yeah, why YouTube, and why not developing a Patreon, or even like what, you know, Rhett & Link have done with Mythical Society, having memberships live on a separate platform. Why do it on YouTube?
Ian:
We considered — and this was actually, like, a conversation we were having before Anthony — before we ever, like, acquired it. We were considering memberships. We had conversations with Patreon, and we had conversations with YouTube.
And the estimations that Patreon were giving us were like, way lower, like as far as how many users they thought we could convert.
And YouTube was like, ‘We think you can get this amount,’ and we were like, ‘Oh, OK.’ So less — you know, you get less money per user, the cut’s greater, but it’s really just like, it’s — the conversion is much better by not having that person click off the page.
Anthony:
Yeah, keeping people on the same platform, it’s a lot easier for people to imagine being — you know, going through the process of signing up for something if they’re not having to go somewhere else.
And a lot of our member-only content is served just by them opening up the YouTube app, and they see it, and it’s there, rather than getting the email, and then going and checking it out separately.
I’m sure Ian and Anthony will be fine, but I hate to see creators make mistakes like this, no matter how successful they may currently be.
They let the kindly professionals at YouTube talk them into giving away a bigger slice of their membership revenue in exchange for a presumed greater number of member sign-ups.
What I’m sure YouTube left out of their pitch is the fact that this decision wasn’t about slices, at all.
Anthony and Ian just gave away the whole pie, since the YouTube membership isn’t really theirs.
How much they get to taste will be strictly up to YouTube from now on.
On the other hand, Rhett and Link’s membership is entirely theirs since it lives on their own platform. And they hold the email addresses of every loyal fan who has ever liked them enough to sign up — something any real supporter has zero problem doing.
Clearly, both Colin and Samir know this, and I suspect that’s what prompted Samir to politely make this point just a few minutes later in the conversation:
Samir @ 1:56:00:
Like, the more I think about that, the more I’m recognizing, like, your primary client, let’s say, as a creative is your audience. Right?
But it can feel like it’s actually the platform. Or the algorithm. And when you are in, like, an ad-backed revenue model, it kinda is. You need mass distribution to make money.
But when you have a membership model, or direct relationship with the audience who’s saying, ‘I like this. I’ll pay to watch it,’ — now you actually need less people to love it. Right?
Being such deep YouTube OG’s, it sounds like Smosh’s membership platform decision was based more on an earnest, if misplaced, sense of loyalty to the YouTube platform than on the actual business math of the thing.
Here’s hoping the talented Anthony and Ian begin taking a few more cues on platform ownership from Colin, Samir, Rhett, and Link — the latter two of which, it shouldn’t surprise, had the rumored $10 million to rescue Smosh from the Defy fiasco.
— Tang
Smosh’s owned platform is: Smosh Store.
Colin and Samir’s owned platforms are: The Publish Press and ColinandSamir.com.
