The real reasons why YouTube’s 5 biggest stars became millionaires

The real reasons why YouTube’s 5 biggest stars became millionaires

ANAHEIM, Calif — The top five YouTube stars have more subscribers than the population of Mexico. Followers of their channels are double the number of all U.S. cable television viewers. And some video bloggers, or vloggers, are making as much money as Hollywood’s biggest stars.

That success is no accident. It is an outcome of strategic corporate planning and the commercial interests that are now shaping the modern era of online video, executives and analysts say. Despite the shaky, home-grown feel of the productions, online video has evolved far from its freewheeling origins into a more carefully-crafted launching pad for brand-wielding Internet stars.

This week, an estimated 1,000 companies are flooding the world’s largest online video conference here, up from just a few hundred last year, organizers said. YouTube, which just marked its 10th year, now has 300,000 ad-supported channels compared to 10,000 three years ago, according to OpenSlate, a YouTube analytics firm.

And ad spending on digital video is expected to increase to $9.5 billion this year, up from $7.8 billion last year and $6 billion the year before, according to Terrance Kawaja, a partner at media venture capital firm LUMA Partners.

“This is a huge opportunity,” Kawaja said.

Top online celebrities still constantly churn new content on YouTube, as well as platforms such as Snapchat, Instagram and Vine, cashing in on the advertising dollars that are tied to their video views. But with the quiet backing of production companies, many of these stars now have the clout to establish their brands beyond the digital world, signing deals with television and movie studios as well as merchandisers.

Smosh, for instance, which is one of YouTube’s most-watched channels, was discovered and promoted by former Disney executive Barry Blumberg. In 2006, Blumberg reached out to the duo behind the act, Ian Hecox and Anthony Padilla, and asked if he could fly up to Sacramento to meet with Hecox’s father.

“I told them. . . if we did it right, they would never have to work a regular job in their life,” said Blumberg, chief content officer for Defy Media, a production company.

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