PewDiePie taught YouTube a valuable lesson

YouTube made a big bet in the fall of 2015: Viewers would pay a monthly fee in order to strip adds from the platform's videos and gain access to original shows starring some of the site's biggest personalities.

The idea was to leverage the massive audiences these stars draw into subscribers paying $9.99 per month for exclusive content with a service called YouTube Red.

The strategy is a stark contrast from competing services like Netflix and Amazon that produce polished original shows on par with traditional TV, such as "House of Cards" or "Transparent." If Netflix is the online version of HBO, with its high-quality, scripted programming, then YouTube Red is more like Bravo or MTV with its self-made reality stars.

But this week, YouTube's biggest star Felix Kjellberg, better known as PewDiePie to his more than 50 million subscribers, showed the dangers of YouTube's strategy and serves as proof that if YouTube wants to go against the incumbent paid streaming services, it needs to take a more critical look at the stars it taps to help out.

On Monday, the Wall Street Journal discovered that nine of Kjellberg's videos featured Nazi and anti-Semitic content, forcing both Disney and YouTube to cut business ties with him. YouTube canceled the second season of Kjellberg's original show on Red and removed him from Google's Preferred ad network, which runs ads alongside the free videos he posts on YouTube. And Disney-owned Maker Studios, which publishes videos from popular stars like Kjellberg, will no longer work with him.

The incident was an incredible fall from grace for the biggest star on YouTube. Kjellberg made an estimated $15 million in 2016 from his YouTube videos, a figure that'll likely drop a lot this year now that he no longer has access to higher-paying advertisers. Kjellberg responded to the controversy in an 11-minute YouTube video, blaming the media and The Wall Street Journal in particular in a Trump-like tirade.

The real story here is that Kjellberg respresents a new breed of star, one that grew up on the internet, freely posting whatever he wanted. That's fine, and it should be allowed to continue for all the obvious free speech reasons you can think of. But if YouTube wants to turn this kind of talent into something more mainstream in order to drive Red subscriptions, it should take another look at the stars it wants to bring on.

As Wired's Emma Grey Ellis pointed out this week, Kjellberg has a long history of posting insensitive material in his videos, including a discussion about selling people into slavery and comparing SNL actress Leslie Jones to Harambe the gorilla. And as John Herrman of The New York Times wrote, the recent controversy has amplified Kjellberg's charged "jokes" into a rallying cry for the alt-right and other seedy corners of the internet.

It's a controversy that shouldn't have required inquiries from the WSJ for YouTube and Disney to discover. YouTube is the perfect platform for talent like Kjellberg to emerge, but it's hardly as sanitized as traditional video production. There's no writer. No producer. No agents or handlers. Just the person and their webcam. If anything, YouTube needs a better way to vet these new kinds of stars before it attempts to showcase them in a premium subscription product like Red.

In the short term, removing Kjellberg from YouTube Red will may put a slight ding in YouTube's number of subscriptions. He's the most popular star on the paid video service, but he's not the only one. And there are other advantages to Red, such as an ad-free experience on all videos and access to Google Play Music, Google's Spotify competitor.

But the lesson YouTube learned this week is that when you tap talent born on the internet, you run the risk of attracting the worst parts of the internet along with it. And that's not a great foundation to build a new business on.

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