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This US company has moved into Asia, and hopes to be the go-to place for Asia’s online celebrities to monetise their brands

If you do not know who Ryan Higa is, it is probably a safe bet your 12-year-old daughter, nephew or cousin is aware of the 25-year-old comedian’s gig.

The Japanese-American’s YouTube channel, called nigahiga, boasts over 15 million subscribers and more than 2.4 billion total clicks. Higa posts videos two or three times a week and, from an outsider’s perspective, much of his fame comes from good looks and an undeniable charisma.

“When you have 15 million fans on YouTube, you are not just a YouTube star anymore, you are just a star,” says Tony Zemeczkowski, Vice President and Managing Director of International at Victorious, as he sits me down to explain the product he is now working to expand into Asia.

“Those people deserve to have their own platform.”

Founded in Santa Monica, California in 2014, Victorious is expanding into Asia and recently opened its International Headquarters in Singapore.

Some of the Asian trends Victorious is hoping to leverage are a high (and growing) mobile penetration rate, familiarity with mobile payments (LINE, Kakao) and even the growing cultural impact of Korean pop culture.

Three of the four Founders — Bing Chen (Chief Creative Officer), Dean Gilbert (Executive Chairman) and Michael Todd (CTO) — are former Google executives while CEO Sam Rogoway was the Founder and CEO of TripUp (which was phased by Kayak after a series of acquisitions involving SideStep).

Today, YouTube is as much of a ‘celebrity maker‘ as Virgin Records or Paramount Pictures, and Victorious hopes to become the app of choice when celebrities need to diversify their income.

Also Read: NewsTag wants to be the YouTube of professional video news

The Pain Point

The beauty of YouTube is that talented people can bypass casting agents, talent scouts and production studios to find fame.

Justin Beiber is the most obvious YouTube star to blow up beyond the video-streaming platform. But today’s reality is different from when The Beibs was just a tyke.

The ecosystem of the YouTube and LINE celebrity is developed and diverse, containing dozens of people who won’t necessarily make a leap into international celebrity like Beiber — or Ryan Higa, for that matter.

They need to seriously focus on brand management and eventually leverage their success to diversify income — examples include starting a company, signing big endorsement deals or producing a documentary.

Zemeczkowski says the major complaint these stars have about YouTube is “they are renting fans”. Or, in other words, they cannot directly interact with followers.

For example, most of Victorious’ content is user generated. Higa utilised his Victorious-created app TeeHee last Mother’s Day to create a user-generated video.

Fans made short messages to their mothers, Higa cut up the sequences and posted it online — it has just under 3.6 million hits on YouTube.

The star can get the ball rolling with a few posts and let the fans keep the app active and interesting. The Ryan Higa app gets about one post per minute.

The other pain point is it is difficult to support an income on just a ‘YouTube salary’.

The video platform uses AdSense to place advertisements around the videos, with the more hits generating higher returns. But, in reality, YouTube is a place to build a brand, and leverage the celebrity into something different.

Take Michelle Phan for example. The YouTube makeup-tutorial star turned Martha Stewart is working to leverage her celebrity to start a company called Ipsy, which raised US$100 million in September.

Also Read: Flummoxed about how to boost your videos on YouTube? Try Vidooly

How it works

Victorious is a white-label company that operates behind the scenes, building and deploying individual apps for the star.

“What we give [YouTube stars] is a platform where they can monetise. They can monetise through advertising, subscription or in-app purchases,” says Zemeczkowsi. “We don’t charge any up-front fee to the creator, but we take a cut on future revenues. So, we have skin in the game, so we need the app to do well.”

Additionally, the company raised US$23.2 million in June 2014 from a series of investors, including Kleiner Perkins Caufield & Byers, Lowercase Capital and Redpoint Ventures.

Around 55 apps have gone live. The deployment process takes 14 days, but Zemeczkowski says most of that time is the validation process.

The apps all have a relatively simple UX and include features like recent uploads, discovering other fans, following and filtering favourite accounts, comments and being able to ‘throw’ emoticons at videos.

‘Throwing emoticons’ is like a Facebook Like with a twist. First, there are multiple options of what to throw, and second, it presents an opportunity for making an in-app purchase because some of the emoticons might cost money for a bundle.

If one were to put all the star’s apps side by side, they would discover that he UX is all similar. This was a deliberate strategy, with the goal being to keep retention rate high by making the UX as intuitive as possible.

“Before YouTube, all of the video streaming sites looked different. But once YouTube became successful, all the sites started to look the same,” says Zemeczkowski, explaining that users would click away instead of working to learn a new user experience for every celebrity.

Also Read: Do you know how Angry Birds, YouTube, Lamborghini came about?

The Asia plan

The company is targetting specific countries: Australia, Japan, Korea and Taiwan.

“The reason why we prioritise these markets is Japan is Number One for app revenues on Google Play. Korea is Number Three and Number Five is Taiwan. So, if you look at the Top Five, three are in Asia. So, [we have] a huge opportunity in the northern part of Asia,” says Zemczkowski. (Evidence in support – US is Number Two and Germany is Number Four)

It also is a region used to spending big bucks online. Between LINE, Kakao Talk and WeChat, the idea of in-app purchases and mobile payments is not foreign.

But, of course, it is the stars who make the company run.

Victorious branched out a bit partnering with the K-pop star behind MOMMAE, Jay Park (a traditional K-pop celebrity). But it also has Malaysia’s Jin Lim (creator of JinnyBoyTV with 582,000 subscribers), Japanese language teacher Chika Yoshida’s channel Bilingual Chika (480,000 followers) and Australian beauty vlogger Chloe Morello (almost 1.4 million subscribers).

In Singapore, Victorious is partnered with Tree Potatoes and Night Owl Cinematics.

Mobile app fans may be familiar with are Eat Your Kimchi (Korea), Night Owl Cinematics (Singapore), Tree Potatoes (Singapore), JinyBoyTV (Malaysia) or Being Indian (India).

Also Read: South Korea’s Swizzle streams music with YouTube

The Competition

If Youtube is the Sun and Victorious is a planet, much like our solar system, it is a rather unique planet. It is difficult to find an apt comparison but, there are other planets circling YouTube that are worth a mention.

‘V’

Naver-owned V is like Periscope specifically tailored for K-pop celebrities.

Famous people get online, have a live broadcast and fans can tune in to watch them do their thing. It gives the performer an opportunity to seem down to earth by allowing them to showcase their ‘regular life’.

It’s similar to Victorious in that it gives fans the feeling of a connection with the celebrity, but the interactions are much more of a one-way street on V.

Kamcord

The other company is Kamcord, basically Twitch gone mobile. It has utilised the popularity of gaming Youtube celebrities like Chief Pat, but that is ancillary to its main business model. The similarity is the focus on community, but the markets are different, and Kamcord has a more distant relationship with YouTube.

In our planetary system, what makes Victorious interesting is the people drawn to the service have to care a lot about the person they are hanging out with.

After playing around on the TeeHee app for a few days, it was remarkable how devoid the service is of trolls. The effort to download, set up a profile and build an interesting community base are not worth the energy for people who are not passionate about the celebrity.

“The apps are for the superfans. If you look at it like a funnel, YouTube is at the top end of the funnel targetting the base, while Victorious would be at the bottom end of the funnel. We are targetting the most engaged, the most passionate fans who want to have a unique relationship with the talent,” says Zemczkowski.

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