Felicia Day, YouTube and the Rise of New Media

Felicia Day, YouTube and the Rise of New Media

Google is shaking up cable TV. Instead of bundling shows, is a la carte the future?

“In the future, not one woman over 40 is in charge in this world? How can that happen?”

Felicia Day is venting on her blog about the latest “Star Trek” movie. In an alternate universe, she might have played a strong female scientist in the film. But instead, she’s an Internet phenom, creating, producing and staring in her YouTube-hit show, “The Guild.” If you missed her on Fox’s “Buffy the Vampire Slayer,” Syfy’s “Eureka” or even the big screen’s “Bring it On,” you won’t miss her online. The pipelines of new media are growing. And YouTube’s reach, paired with her rabid fanbase, willing to tattoo avatars on themselves, are disrupting the old-guard broadcast and cable model.

Like other Hollywood hopefuls, Day was bit by the acting bug early. Born Kathryn Felicia Day in 1979 in Huntsville, Ala., her father, a doctor in the military, moved the family around. Home-schooled and self-motivated, she spent mornings alternating between homework and television — “Lost in Space” was an early favorite — before practicing the violin and topping off the day reading and playing video games.

But as the ’80s came to an end and a generation of teens looked to the Internet to ease its boredom, she found comfort in an online community of 40 or so gamers. She also participated in theater, starring in a local production of “To Kill a Mockingbird” before studying operatic singing and ballet. When she left for the University of Texas at Austin to study mathematics and violin in the late-90s, she stayed in touch. “It’s really funny that my career has become the melding of Internet technology and acting,” she told the Los Angeles Times.

Upon graduation, she moved to Hollywood, making ends meet by taking bit-parts — like “the quirky secretary or that loony girl that had the ceramic bird collection” — in largely forgettable productions. Pigeonholed into dead-end roles, she looked to the then-emerging medium of Web TV.

Creating “The Guild”

She wrote some scripts about a young woman addicted to gaming — loosely based on her admittedly nerdy life — and, with the help of friends, turned it into a Web-based comedy series about online fantasy gamers. “We had all been sitting around Hollywood waiting for someone to give us what we thought we wanted,” she added.

The real-time feedback on YouTube honed her work. “I never felt more fulfilled than when I uploaded that first video and I saw comments starting to appear,” she continued. The allure was immediate, but success was not. With producer Kim Evey, they’d interact with fans, grow their social media and even sell DVDs they’d make to help pay the bills. The first year was paid “with bagels,” she told the Wall Street Journal.

They never focused on becoming the next breakthrough; they just wanted to build a community. The show didn’t attract instant buzz, like “Ask a Ninja,” but it was a gradual, tapping into the mainstream shift of “nerd culture.” Being nerdy herself, the show struck a perfectly-timed chord with a dedicated and growing audience.

Momentum built, and Day grew in popularity — snaring 10 million viewers and sponsorship from Sprint. Microsoft then offered a distribution deal, similar to one it formed with NBC for “30 Rock.” Last October, The Guild kicked off its sixth season, distributed not just through YouTube, but also Hulu, Netflix and Xbox Live, along with its own website, becoming one of the first Web TV franchises around.

“For better or worse — the Internet definitely makes you realize that whatever bubble you put around yourself,” she said to the Los Angeles Times. She made the most of that bubble, entertaining millions along the way. So when YouTube called about a new idea, she was ready to expand her empire.

The Geek & Sundry Experiment

Day is a frontrunner in digital media, but others also sensed the shift in the landscape. More and more, people binge-watch shows online, going through multiple seasons over weekend marathon sessions. Networks also took notice. Its stranglehold rule on television — NBC’s Thursday night Seinfeld and Friends line-up, anyone? — loosened as old loyalties changed.

YouTube, saw the tide shift as well, and approached Day, asking, “What kind of show would you create if you had a — I don’t know — a premium platform?” Her response: Geek & Sundry.

The show brings out the best of indie geek culture, with videos from the community’s foremost voices — Wil Wheaton, Jordan Allen-Dutton of Robot Chicken, Canadians and NASA scientists, and more. Day describes it as “just asking my friends to come play,” but the experiment is anything but. “I think Web video is finally reaching a tipping point this year for sure,” she told Wired. “People are getting used to consuming video on all of their devices, and they want it whenever they feel like watching it.”

Geek & Sundry is just part of a larger YouTube push into premium content. Its subscription line-up ranges from full episodes of Sesame Street to mixed martial arts fighting from UFC. In fact, Ashton Kutcher, Shaquille O’Neal and The Wall Street Journal have all signed on for premium channels. So, if you have any interest in movies, basketball or business, among others, YouTube has you covered.

“This is just the beginning,” YouTube wrote in a blog post. “We’ll be rolling paid channels out more broadly in the coming weeks as a self-service feature for qualifying partners.” Google, YouTube’s parent, is pushing content in a big way, teaming up with big stars for added branding and visibility. Earlier this month, it put up $100 million for the first set of premium channels, and pledged another $200 million for marketing across various ad networks.

“If you want to lead, join us now for the next seven years,” said Robert Kyncl, YouTube’s head of content, according to Advertising Age. “We can build audiences together. We can build brands together.”

You can watch from a PC, smartphone or tablet — anything Internet-connected — for a monthly fee starting at $1. You buy only what you like, instead of paying more for bundled programs. So you save by not buying shows you’ll never watch.

That a la carte model flies in the face of the cable’s sacred cow: the subscription. Back in the late ’40s, media execs feared the rise in television would cannibalize the movie industry. So they came up with an idea: bundle channels to survive. But regulators prevented networks from acting on the idea on a large scale.

Meanwhile, far from Hollywood, in rural Pennsylvania, John Walson, an appliance store owner started the first cable-TV subscription in 1948. Providing TV signals to customers who bought his sets, he charged $100 for installation and $2 a month for service. In 1972, when the government deregulated the industry, cable companies, like HBO and Showtime, prospered by creating original programming.

Subscriptions skyrocketed, and cable became hugely profitable from the high — but more importantly, stable — revenues. Consumers, all the while, fought for unbundled programming, but providers, fat from gorging on those meaty subscription margins, fought tooth-and-nail to keep the system intact — and so, the model stayed the same.

Google’s Challenge

Of course, the era of digital entertainment is here. And, once again, executives are leery of the impact of technology on their industry. This time, though, upstarts like YouTube, Netflix and Hulu are offering what consumers ultimately want: pick what you want to watch.

But unlike the past, the Internet has democratized the distribution of content. Cable no longer has an ironclad grip on what you watch and how you watch. Cable executives know times have changed, so they’re jumping on the a la carte bandwagon. Entertainment Studios Networks, a group of seven cable networks, for example, now offers a YouTube package, called SmartTV.com. For $10 a month, you can watch award-winning shows on Cars.tv, Comedy.tv, JusticeCentral.tv, MyDestination.tv, Pets.tv and Recipe.tv.

Cable powerhouse HBO, meanwhile, is mulling a broadband-only subscription, instead of billing it with cable. But the idea is still only in CEO Richard Plepler’s mind. Eventually, cable will need to unbundle, or it’ll risk losing customers to other outlets.

Google, of course, wants to get there first. The question is: will YouTube produce enough high-quality content to lure subscribers? Cute baby and puppy videos have fueled its growth to date, but few are willing to pay to watch home videos. By lining up A-list talent and working with grassroots phenoms like Day, YouTube hopes to leverage those loyal fanbases and jumpstart its pay model.

Day wears many hats — a gamer, producer and comedian. Similarly, we aren’t just sports fans, sit-com devotees or science fiction enthusiasts. So why hasn’t our entertainment options reflected that? The collective resistance against the “all or nothing” package creates a big opportunity, not just for business, but for creatives looking to find a voice and audience as well.

“Just being the head of a network and working on such a big scale, sometimes you think about the marketing first,” Day told Forbes. “External people are looking for things to monetize and exploit.” To avoid those pitfalls, she plans to focus Geek & Sundry on content that connects with, and expands, its core community.

Day is just part of the mosaic of factors that will decide YouTube success. But if her story proves anything, it’s that people are looking for better business models, ideas and options in entertainment. YouTube’s gamble will challenge the traditional way we consume content — and show us what’s possible for a new era.


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