$46.8B Record U.S. agency revenue in 2015
The Conde Nast of old aimed to sign star scribes like Christopher Hitchens and photographers like Annie Lebowitz. The Conde Nast of now has its sights set on YouTube stars.
To meet the content demands of its growing millennial audience, the magazine publisher's digital-video division, Conde Nast Entertainment, has begun signing YouTube stars to wide-reaching agreements that will make the publisher the exclusive representative for the creators' digital deals, including ad sales for their YouTube channels. As part of the deals, the YouTube creators will star in original shows to air on Conde Nast's properties and contribute to its various publications.
The first of these deals is with make-up artist Kandee Johnson, whose main YouTube channel boasts 2.4 million subscribers and has notched 262.9 million views. Ms. Johnson will star in a number of original series to be produced by Conde Nast Entertainment. Those series will run across Conde Nast's YouTube channels, publication sites and its streaming video site, The Scene, as well as on properties that it has syndication deals with, such as AOL, Yahoo, Dailymotion, Roku and Xbox.
Early next year, Conde Nast Entertainment will announce its first series starring Ms. Johnson. Conde Nast Entertainment senior VP-business development and strategy Whitney Howard declined to offer specifics about the series other than to say it will be associated with one of Conde Nast's publishing brands.
Ms. Johnson had teamed with Conde Nast's Glamour magazine earlier this year for a series called "Beauty ReCovered," in which she recreated several of the magazine's covers, including a 1990 Madonna shoot.
Conde Nast will make money by selling sponsorships against the programs it produces starring Ms. Johnson, the TV shows and films it may end up selling to networks and studios, and the ads it will sell against Ms. Johnson's YouTube channels.
The deal with Ms. Johnson "continues to enhance us as a premium audience network for clients. Secondly there's the opportunity to do collaborations with advertisers around content," said Conde Nast Entertainment chief revenue officer Lisa Valentino.
Hear from Fortune 500 brands that have been forced to pivot as consumer preferences evolve, as well as entrepreneurs building brands from scratch to meet new consumer needs. This event peels apart the layers of brand building with a carefully crafted roster of top marketing, technology, and creative leaders.Learn more
Conde Nast Entertainment is looking secure long-term commitments from advertisers because the division views its deals with Ms. Johnson and other YouTube stars "as long-term commitments to being in the premium content space," Ms. Valentino said. She declined to say if any deals have been signed.
"Clients are in the renewal business," Ms. Valentino said. "For us to start creating programming and testing different formats -- longform, different types of genres of content -- those will become renewal assets distributed across multiple screens."
Ms. Valentino said Conde Nast will look to sell standard ads like pre-roll spots against Ms. Johnson's YouTube channels, as well as sign branded-content deals for videos.
The combination of pre-roll ads and branded content is particularly lucrative on YouTube. The Google-owned video service typically takes 45% of any revenue from ads appended to creators' YouTube videos, but doesn't take a cut of branded video deals unless it was involved in the ad sales process. YouTube also changed how it calculates its 45% take last year in a way that should benefit a big ad seller like Conde Nast.
Conde Nast Entertainment's so-called "360-degree" deals with the YouTube stars are similar to those online video networks like Disney's Maker Studios and Fullscreen sign with creators. Ms. Howard said the company has no designs on becoming a full-blown YouTube network that manages thousands of channels.
Instead, the company is looking to sign between five and 10 YouTube stars who will each be the lead contributor of a specific Conde Nast-related category, such as beauty, fashion, fitness, food, music and sports. Ms. Howard said those deals will be announced over the next few months but declined to share specifics, like which stars she is going after and how long the deals will last.