Peter Kafka

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Why DreamWorks’ AwesomenessTV Deal Paid Off Big for Hollywood Agency UTA

dreamworks awesomenessTV youtube brandcast jeffrey katzenberg
DreamWorks Animation’s deal to buy AwesomenessTV
marks the first time a big media company has bought a made-for-YouTube network.

A couple days after the acquisition was announced, lots of people are still trying to figure out what that means for the Web video business: Did Jeffrey Katzenberg buy a business, or CEO Brian Robbins and his talent? And what does that mean for other Web video makers, who are finding lots of viewers but not as much money?

Meanwhile, the deal represents a bright spot for Hollywood talent agencies’ long-running attempts to negotiate the Web. United Talent Agency, which had represented Robbins, a child-actor turned director and producer, helped build Awesomeness from the ground up. And it got a chunk of the deal’s payoff.

UTA CEO Jeremy Zimmer helped connect Robbins with YouTube content head Robert Kyncl back in 2010, when Kyncl was first putting together his strategy to seed “channels” with millions of Google bucks.

And when Awesomeness got off the ground, UTA took equity in Awesomeness in lieu of fees; later on, it put in cash for an additional stake when the company raised $3.5 million (MK Capital took the bulk of that round, and I’m told much of that money remained unspent when DreamWorks bought the company).

UTA is happy to tell people about its role, and you can read more in Variety and Adweek. And PandoDaily has an interview with Mark Terbeek, who put MK Capital into the deal; he’s now at rival firm Greycroft. Note that MK Capital, Greycroft and Mark Suster’s GRP Partners have all bet heavily on the YouTube ecosystem.

And here’s Katzenberg’s description of the deal, from YouTube’s Brandcast event this week, courtesy of BTIG’s Rich Greenfield:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work