Why Viral Views Don’t Equal a Business (And What Does) | Fortune Daily

0:02Fortune Daily: The deal-making process got really complicated and he was like, what do we think? Why don't we just go do it on YouTube? And it was the easiest yes.

0:14Adam Faze: Hello from New York. I'm Ellie Austin and this is Fortune Daily. What if the future of television isn't actually on TV at all? The producer Adam Faze is betting that the next great shows will be built for YouTube, not just cut into clips for TikTok. After producing iShowSpeed's 35-day live tour, he saw how one piece of long-form programming could generate billions of organic views across the internet. Now, FaZe is helping turn creator-led formats into real entertainment businesses, from the hugely popular Keep the Meter Running with Kareem Rama to Amazon-backed series such as Boy Room. Faiz joins me to talk about why viral views don't automatically equal a legitimate business, how the lines between the creator economy and TV are increasingly blurred, and who gets to own the next generation of entertainment IP.

1:16Adam Faze: Adam, hello. Thank you for joining us here on this beautiful day in Southampton at Faying to Fortune. We've got a lot of background noise, but we're going to proceed regardless.

1:25Fortune Daily: We're going to get the best time.

1:26Adam Faze: So you spent years really proving that TikTok was the new television in many ways. And in May of this year, you relaunched the much less series, Keep the Meter Running with Kareem Rama as a long form YouTube series. And at the time you said, I think it's time to make big TV. So tell me why that was your opinion at that moment. And has the business model changed?

1:47Fortune Daily: Completely. To be honest, it actually dates back to a very strange experience I had back in September, which is I worked with a live streamer by the name of iShowSpeed. And he was doing a 35-day live stream tour of the United States where he did not turn the camera off for 35 days straight and even filmed himself sleeping. I was a producer on the tour. And what I watched happen was even though we had 100 ,000 live viewers in any given moment, you'd have about a billion views in clips every single day, completely organically. And I remembered watching these clips just happen on accounts that he was not managing from people he did not know.

2:19Fortune Daily: And all of a sudden, I have this sense of like spending all of this time perfecting the one clip versus thinking about the longer piece of programmings that can be clipped up in a lot more ways and kind of dominate all these different platforms that were ensuing entertainment on might be a better use time. it was a phone call from kareem back in december last year it was like what do you think about us going and doing this show on youtube he had been pitching keep the meter running around to cnn and a lot of those sort of traditional networks and the deal making process got really complicated and he was like what do we think but why don't we just go do it on youtube and it was the easiest

2:53Adam Faze: yes i've ever said in my end tell us a bit about what you can that deal making process being complicated what was you know a company like cnn offering and not offering what they were offering

3:03Fortune Daily: was a lot of money in terms of the budget to actually go produce a show like this. And I think that's where you realize like the power of traditional media still has budgets that we just cannot ask for and form in terms of a brand new show on YouTube. But in terms of the deal making process, what I do know is that it was it was a traditional network trying to figure out how to work with a creator that has many different formats and mediums and trying to figure out what, you know, what they could force him to do and not do in terms of controls and other programming. And it just started to seem like a whole lot more red tape than was really necessary.

3:35Fortune Daily: And to be honest, I think the question started becoming on Kareem's mind of like, if we go do all of this and it ends up on a CNN floss, is anyone even going to watch this?

3:43Adam Faze: Is there still a prestige element to a creator like Kareem being on a network like CNN?

3:49Fortune Daily: I think it has to be alluring, especially you've always wanted those phone calls. So when those places start calling, it's hard to turn them down. But I think that Kareem and I both have careers that are very much as the result of being on these completely free to watch platforms that we see as up the modern day network television. And for us, it's much more worth the immediate financial hit of building on these platforms for just the long term goal of reaching as many people as will be possible.

4:11Adam Faze: And I want to pick up on that financial side of things. So you funded Boy Room, which was one of your first series, if not your first series, where you went inside boys' incredibly messy bedrooms by making Amazon a creative partner. So tell us a bit about what that buys you, having a company like Amazon, actually our Fortune 500 number one this year behind you. And what does it cost you?

4:32Fortune Daily: So it's a great question. I mean, to go into like what the original version of Boy Room was that we made on our own, cost about$42 ,000 to make 16 episodes of that show. So really inexpensive. The problem with that is you also make no money doing it either. And for as many hundreds of millions of views that we've gotten on TikTok, we've probably in our lifespan made like$15 ,000 from a TikTok creator. But that's not a business model. It's a really early on. We knew that we were going to need to bring a partner into the show in order for us to monetize it, caressing. And there was this opportunity because we were truly looking at the most disgusting bedroom celebration in my entire life, where a lot of the comments were people saying like, you can't let these men live like this.

5:09Fortune Daily: And so we would just screenshot those comments and send it to every big furniture partner we could pick from Ikea, you know, to Amazon. But and they were the ones that were the most interested in seeing a such a format that they could buy into and be our partner for the long wall. And so funnily enough, we literally just went and got more episodes two weeks ago in New Orleans and Miami to come out this fall. We have a new show with Amazon as well, Bud Girl Room with Owen Peele. That's a spin off of the boy ring format. And for us, it's like it allows us to go make a better version of the show.

5:38Fortune Daily: It is now a full renovation format where every time we go to one of these rooms, we give a full$5 ,000 renovation that looks so much better than what we found in our first split. So having a partner like Amazon makes it not have to question the process of how do we get to make a show like this. It makes it also for us that we can actually have a business behind something that otherwise makes no money in a pocket.

5:56Adam Faze: But is it creatively stifling in any way? Do you worry about that?

5:59Fortune Daily: I think it depends on the project. And I think we've learned a lot over the years in terms of when would we want to bring a partner and when would we not.

6:06Adam Faze: So tell me a bit about that. What's the distinction?

6:08Fortune Daily: I think for us, it's like on a show like Keep the Meter Running, right now we would never want to find an exclusive partner for that show because for us, it's most important that we start traveling the world and get to tell stories of all these people that we feel their stories haven't been told.

6:19Adam Faze: You just got back from Syria?

6:20Fortune Daily: We just got back from Syria two months ago. We're getting ready to get back on a plane and go international again. So for us, I think it's about what is the long-term vision of this piece of IP that we're building and when does it make sense to find that long-term partner and when does it not?

6:32Adam Faze: You mentioned about tick detoxing views not translating into much money at all. what's your advice to creators starting out on how to translate followers and views into money

6:43Fortune Daily: it's it's really challenging it's also never been harder and will only get harder for here on out because every single person on earth wants to be a content creator you know and so as everyone starts uploading to youtube and tiktok and instagram you know it might the short form algorithms will still make it just as easy to have a viral moment but the sustainability of that virality is the hardest possible part. I think that YouTube is a really interesting place to build a long-term audience on because you have a much stickier audience low-term. And I think what we've learned even in the process of doing this long-form version of Keith the Meter running is sort of the sense of as quickly as these followers and views come is as quickly as they can be removed from you.

7:22Fortune Daily: And sometimes the humbling part of building view by view means you're going to have a much more long-term relationship with your audience.

7:28Adam Faze: That's really interesting. On that point about everyone wanting to be a great. So I read a quote that you said, which is today, I think you said, we've never had more famous people, but we've never had fewer stars. What does that mean for the entertainment industry?

7:41Fortune Daily: I think part of it is, I mean, I think what I said was, I think we've had just as many stars as we've ever had, you know, but I do believe that a platform like TikTok overnight created more famous people than we ever had been used to have it. You know, so you have all these people now that are the this person guy or the this person girl. And it might just be that like, they made a latte in a certain way in 2020. And now they They have a million followers and they don't really know what to do with them. That's as the result of the sort of democratized short-form media algorithms. I think star making is a whole other part of the puzzle.

8:14Fortune Daily: And I do believe that being a star, it's this innate thing that you are just born with. You meet someone and you're just like, wow, you've got something. And I think that's what's always alluring to people like Kareem. When I met Kareem, there was just this feeling of, I want to keep spending time with this person. I could just spend the rest of my life around this person. And if I feel that way, surely a whole lot other people feel that way as well. in terms of what does it actually mean for the business of Hollywood I think Hollywood always took pride in finding talent and developing them and I think that something happened in 2020 where we all got very insecure about this algorithm finding a lot more famous people the people just ran towards the people that had the most followers as the people to build around and then started complaining one that couldn't monetize it in the way that they thought was possible the makeup brand that they launched with someone with 20 million followers wasn't as big as it should have been my big perspective has been for a long time that a lot of these creators maybe have the following that they do because they were the first ones doing it and they were filling a need that at the time no one else was filling um but i really do believe that the bar for quality is still really low on most of these platforms if you make the best possible thing and are consistent with that output you're gonna have the bigger audience in the line where do you think the best white space

9:32Adam Faze: What's not being done?

9:34Fortune Daily: Making amazing television.

9:36Adam Faze: Making amazing television.

9:37Fortune Daily: Making amazing television. Again, I think the bar is still fairly low. And I think the hardest part about being in a space where we don't have network executives is you have to be your own boss and you have to push yourself to keep making something better than you've ever made in your entire life. It's not easy to always push yourself to do that. And I think that a lot of people are still playing the content game. How do I get a viral video? How do I get on the front page of YouTube, which doesn't actually really exist? What's the best thumbnail and title that you can do to a science and engineer so that the$1 cheeseburger video versus million dollar cheeseburger gets 5 million views?

10:09Fortune Daily: I've seen a million of those videos and I'm a sucker for clicking on that video just like everybody else. I don't think I could tell you the creator that made that video nine times out of 10. And so I think really the hardest thing is to constantly remind yourself that like you're supposed to be impressing yourself. And the best way that you're going to build an audience long term is doing the thing that nobody else is doing.

10:27Adam Faze: You build these series around personalities like Kareem, like Rachel Koster. Tell us about who owns the IP in these situations. How are the deals cut?

10:36Fortune Daily: It's honestly a case-by-case basis. I think something that we're really passionate about on both the talent side and on the crew side is finding ways where our talent are co-owners of the IP itself and our crews have equity in the project they're working on as well. I think, again, it goes to the nature of being in a very new industry where we have to kind of answer these questions ourselves is it's on us to figure out what are the deals of the future that are best for every single person involved and not just a company that's trying to create these things.

11:03Adam Faze: All legacy institutions, whether it be studios, networks, media companies like us are trying to get into the creative business in some way. Are there any better doing it well?

11:14Fortune Daily: To be honest, I actually think he's doing it best right now. It's the New York Times. I'm very impressed with their ability to stand at show. Like they have that new program, The Interview, which I think is rivaling 60 Minutes in terms of its quality of interviews themselves. And I think the way that they package the show in a way that you know it comes out every weekend, there's a beautiful teaser that comes along with it, there's this photo spread that ends up going in the newspaper, and it just feels like a premium product that's worth your time. And I think that that's the part that's missing the most from this space, is you have a lot of people that are trying to throw ideas out the wall without even answering the question of, would they watch this themselves?

11:49Fortune Daily: And I think we have to make things that we would want to watch before we ask anybody else to watch themselves.

11:53Adam Faze: I'm sure you get asked this a lot. What's the future of the movie theater in this?

11:57Fortune Daily: I still think it's an incredible form of distribution. I was really happy to see what happened with Obsession this year, Ian and Backrooms. I think they actually have less to do with each other than people think. I don't think it's a coincidence that these creators were on YouTube, but I don't think it's that they were YouTubers with a YouTube following, and that's why they made as much money as they did. I think it's two separate things. With Obsession, you know, because the movie ended up making more money in Weekend 2 than Weekend 1, It's just a proof of great word of mouth and the adventizing that came out of it.

12:25Fortune Daily: And what an amazing way to be part of a moment to go to a theater with your friends and see a scary movie and be freaked out and go talk to everybody about it. Backrooms, I think, is one of the first cases of truly original online internet IP. And I think people took the wrong lesson out of its success. I think a lot of people went there and said, OK, what's the other Reddit thread we can find that we're going to go find this next piece of IP without realizing that, like, hey, actually, some 20 year old for literally$500. what created this IP five years ago. And maybe it's proof that you can also create that next IP from scratch on these platforms yourself.

12:57Adam Faze: You mentioned a few minutes ago that there's a lot of creators out there who have massive followings because they do incredible things and others who maybe don't have such original ideas. Do you think it's net positive that we're living in a world where power and influence correlate to the number of people you have following you on a social media platform?

13:13Fortune Daily: No, I think it's a deeply dystopian lands fit. And I think that we all hated the idea of globalism and we found ourselves in a world where free companies own the entire television market for the entire planet. And the thing that worries me the most, not to get too political, is just we think of the worst authoritarian leaders of history. And we think about the media landscape that they existed in. We found out about these people from radio and from newspapers and we couldn't even understand the language they were speaking. And on Instagram right now, I could post a video of myself talking and it's automatically translated into five biggest languages around the world.

13:44Fortune Daily: It not just translated, it changes my mouth to make it look like I'm speeding the native tongue of the country that it's been consumed in. I worry about what happens when bad leaders with great charisma are able to use that for power around the world. And I think that there's a lot of questions that we need to answer on a regulation standpoint to protect the future of our lives.

14:04Adam Faze: Adam Faye, this is so fascinating. Thank you for joining us.

14:06Fortune Daily: Thank you so much.

14:07Adam Faze: Next up, we're staying in the Hamptons at Fame to Fortune to discuss the value of cultural influence and how on earth you measure it. Helene Flowers is a self-described cultural engineer and he built an index to help artists and athletes understand their true worth. I sat down with Flowers, the founder of Artonomics for Anatomy of a Deal. Helene, thank you so much for joining us. Thank you for having me. today um you describe yourself as a cultural engineer and you also say you're building weapons of mass construction which is an amazing phrase tell me what those two things mean in business terms in business terms cultural engineering can go from you know multi-disciplinary practice of fine art it can go from documentary film to music to spoken word poetry i published 11, 18 books.

15:02Adam Faze: And so, and then I have my own, you know, curriculum that I created that I also license and sell as well. Your curriculum, tell me a bit about that. What does that involve? So Autonomics is an initiative to help creatives, athletes, entertainers, artists to protect scale and estate plan, their intellectual property, image and likeness. And so we were picked up by the Obama Foundation for our curriculum. And right now we also have our our autonomics cultural capital index where we measure the cultural value of cultural engineers so that public private sector entities can know what's cultural engineers to work with how can you measure the cultural value in that in that sense that that feels like a great thing to do it also feels very abstract and nebulous talk you through what that looks like it's the same thing when you understand like financial engineering is a form of art and so i can ask you like how can you measure someone's net worth?

15:56Adam Faze: But we have a US dollar fiat currency metric to measure it, right? The measurements of a house, a car, a painting. But we never really measure what is the cultural value of engineers. So we can look at Dolly Parton who just passed her asset liability net worth evaluation. But with our index, we measure cultural influence, cultural adoption rate, cultural longevity, originality, attribution, commercial conversion, global reach, and other measures that we developed to measure outside of any fiat currency measurements because we believe that cultural capital is intrinsic value. Tell me a bit about your story, how you grew up.

16:36Adam Faze: I know there was also a very significant event in your life that has kind of brought you to where you are. Tell me more about you. Yeah, I was born in 1980, so I always like to say my siblings are Reaganomics, rap, hip-hop, and crack cocaine. So that choice led for me taking my PSATs at the age of 11. taking courses at Harvard University at the age of 11, but seeing my mom struggle as a single parent and started to sell crack cocaine at the age of 12. At the age of 16, falsely accused, incarcerated, received two life sentences for something I didn't do. And it gave me 22 years to figure out a way out of, to use storytelling, literature, and the arts to get out of prison, but not just to free myself, but to change legislation to get other juvenile lifers who received life sentences under the age of 18 like I did, an opportunity for legislative and judicial relief to return back to society.

17:32Adam Faze: Did you ever struggle mentally during that time? And if so, how did you combat that? How did you stay so focused? For me, no matter what circumstance I went through at a young age, before I even understood economic vernacular, I understood the importance of defining oneself and defining one's value. And so when a judge told me life twice and the government said I was a minister society and professors at Princeton University labeled my generation of children as super predators, I never bought into that definition and I never accepted that value. And I've always, even at a young age, had the audacity to define myself and to dictate my own appraisal of my human potential and value.

18:18Adam Faze: That's a very inspirational note to end off. Thank you so much for joining. Thank you for the interview. US SailGP CEO Mike Buckley wants to bring racing fans to the water and he shared his plan with Fortune Executive Editorial Director Diane Brady in the business of sports. So we are here at the Fame to Fortune Summit with Mike Buckley. Hey, it's been three years since you bought the US SailGP team. Let's start with a little bit of how is it going.

18:50Fortune Daily: Yeah, it's been just about three years. It's gone by like that. We've learned a ton. We've done some things really well. We've done some things really poorly. We've learned a ton. Every day is a new obstacle, but that's part of kind of startup culture and really just any business.

19:09Adam Faze: I love that you're saying startup culture because like basically you are in essence trying to build a league, not just a team. This was started by Larry Ellison. What was it that attracted you to this and where do you see the opportunity?

19:24Fortune Daily: Yeah, I mean, you'd never think that SailGP is only six years old with the growth where we are now. And that's due to, you know, Larry's commitment and his belief that he and his team could grow this into one of the best sports properties in the world. You know, for us, we, you know, we want to build something on and off the water that's special, right? Something that connects with fans 24-7. the hardest challenge is educating people you know what is SailGP because sailing forever used to be out of sight out of mind and what Larry created was he brought that really cool racing that was happening that people couldn't see America's got he brought it he brought it into these iconic cities he put a cost cap so you know how much you have to spend all the teams have the same exact boats and it's an investable business but it's more like a bit more like F1

20:18Adam Faze: And you've got David Ellison now. Do you have your own drive to survive? I mean, what's the ecosystem that you're building around the sport to try and make it popular?

20:28Fortune Daily: Yeah, but we need to create true fandom. We need to create a true connection. There has to be, my belief is that there has to be a value exchange. If you're going to be a fan of me or my teammate or whatever it is, and that could be, you know, you buy a shirt, you buy a hat, you love us, you hate us. Either of it is a fan, but there has to be some sort of value exchange. You can't just expect it. We've got to introduce ourselves. Drive to Survive is obviously incredibly successful. It turned Formula One, you know, from a thing that Americans didn't spend a lot of time thinking about to, you know, right in our face.

21:05Fortune Daily: We learned about these drivers, these team principals, who they're dating, what makes them tick.

21:10Adam Faze: personalities yeah so as CEO you set the vision and strategy of the company I mean give me a sense of the vision I mean we're talking about F1 did you see it as much as an entertainment property you know what differentiates your sport two at a time when we are seeing other sports pro and popularity what makes it unique to have a sailing I mean our you know our races our playing field

21:35Fortune Daily: is the ocean uh and you know I like to think everything by the water we're sitting here by the water right now is a little bit better uh and and i think that's you know that's our superpower we we get to bring people to the water to watch our races uh there's a hundred other amazing sports properties including formula one um but i think we have that unique sauce of of mother nature that

21:59Adam Faze: that the others you know don't quite have yet so the role of sponsors you know i think about the business of sports what kind of partners are you looking for you've attracted quite a few high you know, Tommy Hilbig or others so far. What do you want there?

22:14Fortune Daily: It's got to start with authenticity. You know, we, we want to build, you know, the best group of partners in sport. That that's, that's our goal as a, as a business. We're on our, on our way to doing that. But it's got to start with authenticity. You know, we wear Tommy's clothes on and off the water. There's a performance element. There's a lifestyle element, you know, with Marriott luxury and the Rich Carlton. Hotels are, you know, I'd like to say my second home, but really probably my first home for all of us that are racing around the world.

22:52Adam Faze: A lot of man like you lives on a boat, but I digress. What's next? Give us a taste of what's around the corner for...

22:58Fortune Daily: Yeah, so Monday we fly to Valencia. we've got four races left we are sitting fourth on the season championship top three teams make the finals so we're right in the mix so we gotta put our heads down, we gotta work and yeah, we're in the playoffs and we got a shot to win this

23:17Adam Faze: Great, thanks for joining us Mike

23:19Fortune Daily: Thank you so much

23:30Adam Faze: We'll see you tomorrow.