The biggest TV star in the world isn't on traditional TV.
PewDiePie – aka Brighton-based Swede Felix Kjellberg – has 25.4m subscribers on YouTube, where his gaming videos have been watched more than 3.9bn times.
He's the biggest star from the world of multi-channel networks (MCNs) on YouTube. These companies are part broadcasters, running networks of channels and commissioning shows, and part talent agencies, signing up and developing (often) youthful talent.
PewDiePie is signed to Maker Studios, a Los Angeles MCN that Disney bought earlier this month in a deal worth up to $950m if it hits future performance targets. It's the biggest investment yet in the emerging YouTube content industry.
It's an alternative TV world fuelled by viewers as young as its stars. Research firm GlobalWebIndex found in 2013 that 87% of 16-24-year-old internet users in the UK had visited YouTube in the past month: an audience of 5.22 million people. "Young people live on YouTube, learn on YouTube and share much of their content and lives through YouTube," says Kevin Curran, senior lecturer in computer science at the University of Ulster. "Video viewing and sharing has basically exploded among young people."
One explanation for why even the biggest "YouTubers" (as they're known) remain under the radar within the wider media industry is their content. It's startling how many of the biggest British channels on YouTube are devoted to games, for example – a form of entertainment that large parts of the media industry still doesn't really understand or appreciate.
Seven of the top 10 UK-based channels are games-focused, with Minecraft particularly prominent – while in February, PewDiePie generated two-and-a-half times as many views as One Direction's channel. Kjellberg and channels such as Stampy, the DiamondMinecart, iBallisticSquid and Yogscast are the new influencers in the games industry.
Disney isn't the first big media company to buy an MCN to help it better reach this huge online audience that is turning to YouTube as an alternative to traditional TV, and watching it across its devices: computers, smartphones, tablets and even television. In May 2012, Discovery Communications bought MCN Revision3 for $30m, while in May 2013, DreamWorks Animation bought another, AwesomenessTV, for $117m depending on performance bonuses.
Now Disney has made its move for Maker Studios, with its 55,000 channels, 380m subscribers and 5.5bn monthly views on YouTube – despite recent reports that Maker had been losing up to $3m a month as it struggled to make advertising revenues outweigh the costs of running its network.
YouTube is paying off for Google, and individual YouTubers can make decent money, but the last year has seen persistent speculation that the middleman MCNs have struggled to turn a profit.
Disney buying Maker Studios may be a happy union of old and new media, but sceptics may see it more as a heavily loss-making MCN succeeding in getting bought by a big media firm fretting about its ability to follow its young audience to digital platforms, before the MCN's money ran out.
Disney fretting? "For me, they had not really grasped what's happening with the younger audience on platforms like YouTube," says Patrick Walker, who used to run YouTube's non-US business and is now chief content officer at British MCN Base79. "Disney was never one of the companies that engaged deeply in the platform. They always saw it as more of a promotional channel to get people to watch stuff somewhere else," he says, pointing to Disney's recent layoffs of 700 staff within its existing digital entertainment division as a strategic shift, taken with its decision to buy Maker.
Expect more acquisitions and partnerships between big media and MCNs in what some experts see as a shift in the relationship between viewers and stars. "In the future it will be less about manufactured formats and celebrities and more about genuine, sharable and organic relationships between real, home-grown talent," says Dom Smales, MD of social talent agency Gleam Futures.
Walker agrees. "This is a complete transformation of the industry."
New video stars
The UK's top 10 YouTube channels in February 2014
Swedish gamer now living in the UK, whose playthroughs have 25m subscribers.
More games, including daily Minecraft videos, as well as other console games.
3 One Direction
The official YouTube channel for the world's biggest boyband.
4 The DiamondMinecart
Daily Minecraft videos, spotlighting the burgeoning community around "mods" for the game.
Another Minecraft-focused channel, which has diversified into other Xbox games.
A group of gamers who made their name with videos of World of Warcraft and Minecraft.
The official YouTube channel of the BBC, with clips from key shows across its output.
A channel aimed at young children with a mixture of educational songs and videos.
Twenty-year-old Olajide Olatunji, with videos on FIFA, Grand Theft Auto and other games.
Another 20-year-old, Tom Cassell, whose videos focus on Minecraft and other games.
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