Creator’s startup Jellysmack to spend $500 million on old YouTube videos

  • Creative company Jellysmack is buying the rights to YouTube catalogs as it seeks to expand.
  • The company pays creators for their old YouTube videos in an effort to generate ad revenue.
  • His pitch to influencers is that they can use his payouts to reinvest in their businesses.

Creator startup Jellysmack is on the hunt for old YouTube videos.

It is setting aside $500 million to buy licensing rights to influencers’ back catalogs, using its internal algorithms to identify which evergreen content has the best potential to generate future ad revenue for the company.

In exchange, Jellysmack will pay creators an upfront sum based on what it thinks their content libraries are worth. Its president, Sean Atkins, said each deal will be creator-specific, but payouts could land between $50,000 and $50 million. The company declined to share the period over which it plans to spend the $500 million in capital, saying it will depend on how quickly it can identify creators to work with.

“We have a really good performance view of how their catalogs perform over time,” Atkins said. “There’s a lot of value in the library, especially on YouTube, that these creators have generated, but they usually have to wait a long time to extract all the tail of that value.”

The company said it was testing its catalog licensing program with dozens of creators, but declined to share specific names of participants due to nondisclosure agreements.

It’s one of many companies that have experimented with new business models to invest directly in creators. Venture capital firm Slow Ventures paid YouTube creator Marina Mogilko $1.7 million last year in exchange for a 5% cut in her future earnings. And payout startup Creative Juice paid four YouTube channels $250,000 in return for a percentage of AdSense revenue, brand deal revenue, and other revenue streams over a roughly 2-year period.

Unlike Slow Ventures and Creative Juice, Jellysmack focuses on one particular aspect of a creator’s revenue: advertising revenue from evergreen videos on YouTube. It’s about taking an exclusive stake in a creator’s older content rather than future work, and there are no terms on what an influencer can do with their Jellysmack payment.

“We’re basically allowing them to invest in their back-library so they can invest in things that they’re passionate about in terms of building their brand and their channel,” Atkins said. “These have become big questions and investment questions, which like in any kind of emerging business, especially in the creator ecosystem, even broader than the kind of digital creative ecosystem, there’s there aren’t many financing systems.”

Founded in 2016, Jellysmack told Insider it now has more than 1,000 employees who are focused on helping creators monetize video content on platforms including YouTube, Facebook and Snapchat.

He’s associated with some of the internet’s biggest stars, such as MrBeast (Jimmy Donaldson) and PewDiePie (Felix Kjellberg). The company confirmed in May that it had raised a Series C round from Softbank’s Vision Fund 2 for an undisclosed amount. And last week he announcement a new program where he will help “high profile public figures” become content creators on apps like YouTube and Facebook. His first partner for the initiative is UFC heavyweight champion Francis Ngannou.

Shirley K. Rosa