CDS CEO Reza Izad on Going Long-Form on the Web

With MIPTV and the second annual MIP Digital Fronts around the corner (you can register here!), VideoInk reached out to a diverse lineup of influential video industry executives scheduled to present or appear at the event. Our conversations covered their individual businesses, plans for MIPTV and the Fronts, and the video business as a whole. You can access them all here. Enjoy!

Collective Digital Studio is one of the more prominent multi-channel network operators on YouTube — but as its CEO Reza Izad would be the first to tell you, his company is different. With a few exceptions, many YouTube MCNs have yet to venture

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into long-form productions — whether it’s a series or a feature-length film. CDS has done that with shows such as “Video Game High School” and “Epic Meal Empire,” and it will continue to do so with projects like “Natural Born Pranksters.”

As one of the presenting partners at the second annual MIP Digital Fronts, we spoke with Izad about what his company plans to showcase there.

What are you presenting at the MIP Digital Fronts?

In the past 12 months, we have really stepped up our original content efforts. We have a number of projects we are presenting including “Natural Born Pranksters” and “Cyanide & Happiness.”

CDS is no stranger to long-form content; you have “Natural Born Pranksters” in the works, and have produced multiple seasons of “Video Game High School,” among other projects. With long form, is the ultimate goal still to get that on television or television-like services (for example: Netflix)?

Our model is to partner with our creative talent to produce long-form content with a specific audience in mind. The goal is to create franchises that will monetize over multiple seasons and create a library of content we can license. Broadcast, EST, and SVOD clearly play a valuable role in monetizing long-form content.

“Cyanide & Happiness” is a good example of this. The Explosm team is really talented and has a very dedicated audience. Their animation is distinctive and the humor is spot on. Season one was crowd funded and averaged over 3,000,000 views an episode on YouTube. They produced 11 minute episodes, which format well for TV. Now, we are taking the concept to the international marketplace with 10 half-hour episodes.

In your opinion, how does the international market differ from the US market when it comes to buyers seeking original, digital content?

The same audience and advertising trends we have been seeing over the last couple of years in the US are starting to appear globally. We are seeing a lot of broadcasters and other international media companies look at ways to enter the digital video market. International content buyers are just waking up to the power of influencer-based content to help achieve these goals.

CDS has previously employed many different models for producing its content, from crowdfunding to brand sponsorship/integration deals. Is there one-model for making the type of high-end programming your company is attempting to?

There is no one model to creating long-form content on the web. One of the big challenges in the space is that pre-roll on its own isn’t enough to support long-form productions. This isn’t YouTube’s fault; the math just doesn’t work. It doesn’t work on Hulu or anywhere else for that matter. Let’s take a dream scenario, your series generates 50,000,000 views earning an average of $20 per thousand views. That is only $1,000,000 in revenue. The reality is that 50,000,000 views on platforms outside of YouTube is rarely (never) achieved and that monetization on YouTube is just a fraction of $20 per thousand. Either way you can’t produce much without other means. So brand sponsorships, content licensing, merchandising. and electronic sell-through all have a significant a role in the economics of long-form content creation on the web.

There are a lot more digital platforms for creators, producers, and networks to distribute their content to than there were even a few years ago. Which platform(s) do you find to be

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the most intriguing for the type of content that CDS seeks to produce, and why?

There are 10 video platforms launching in the next six months that we know about. We want to service them all and grow the pie for our content partners.

In terms of innovation, I think the five-second spot that Vessel developed is very interesting. Facebook’s scale is obviously very intriguing.

MCNs are increasingly looking to diversify their revenue streams. How is CDS attempting to grow its business beyond the walls of YouTube?

YouTube is a very important partner to our business. They are the only partner that has consistently nurtured and grown this ecosystem. However, it is has never been more than 50% of our revenue mix. That is not the case for most of our competitors. We don’t have the same anxiety to prove that we can diversify off YouTube. We don’t even think about it that way. We look to do what is right for our content creators and maximize value where we can.