Private Equity companies: "Look at this amazing company making a lot of money, being popular, pushing out original and engaging content, and being successful! Let's buy them and totally change what they're doing."
@@ashishpatel350there are a variety of reasons people sell but that doesn't change the fact that you're selling to a firm where no possible return is enough to leave you to make your money. Unless that return is ♾️ then MAYBE they'll leave you alone for a while. PE is a parasitic organism because when the time comes for the liability portion they just shutter the business anyway to avoid it.
As someone who worked in PE, this couldn't be truer. It is a constant process to find efficiencies in the balance sheet and to do that easily, you make large changes to impact the short term profitability to make the asset more appealing to the next sucker holding the hot potato. The due diligence conducted continues to erode so more questionable deals occur and more drastic measures have to be taken to make a company appear financially appealing. Its a shit industry and honestly destroys everything.
I think people are overstating their performance to a degree, if they can get that level of views consistently that’s huge. Too early days to really speak to their success
@@bobboy5508 a fast rise means pretty much nothing in the long run. I’ve seen plenty of channels pop up with big names attached and get hundreds of thousands to millions in about the same time frame. Your sub count and single video views mean nothing to the people with money, they care about your average view count/video over time. What makes money on RU-vid is consistency, if you have a meteoric rise it can actually be harmful in the long run.
I let my late-teenage sons run riot through Mr Regular's reviews of such cars I owned as a young man as 240Zs and '78 Celicas, but my tween daughter can wait to experience such content. Mr Regular surely appreciates motor vehicles, but it's not exactly in a PG way.
Big time. It happens when channels grow to such massive lengths they can no longer keep up with demand.. they need money. The money comes in with people to help direct them to create content that generates revenue. But this unfortunately usually leads to the demise of a lot of channels as the true creatives that started it all no longer feel like they are making content they want to make.. but content they HAVE to make. It was a huge loss. Car throttle was so fun back in the day.
I am in England and I have to agree about car throttle... And to auto Alex. And the new one All the gear.. Donut was good.. I watched say 90 percent of their videos.... But recently that went down quite a bit. Big Time I am enjoying and think I will as it was what I liked when simular videos on donut.
I was so happy to see Alex make his own channel. I mean it felt to me that he was the one that got car throttle to where it was and he was struggling to get any budget for his projects. You have a channel with millions of subs and the owners didn't want to give any money even when Alex was running on a small budget. I no longer watch car throttle these days. And now Alex has created another 2 channels with people he previously worked with.
Exactly. Something like Doughnut Media does not need some beancounter in a suit that has never opened the bonnet of his car to check the oil, let alone know the difference between 95 and 98 octane or the nuances of timing or how much boost is too much. All a suit sees is " how to get more ad revenue " They do NOT care about the viewers the same way that the OG owners and hosts do.
The business is truly about business. You're not talking about the business, you're talking about the content. They are not the same thing. If the business of making content was so damn strong then there wouldn't be merch stores because content creators wouldn't absolutely rely on the non-YT revenue. Why else do all of your favourite creators have Patreon pages?
Shareholders are why quality goes down, and prices go up. They ruin every company. Your average shareholder doesn’t care how a company grows. They just care that the stock price went up.
I didn't watch Donut all the time, just when something piqued my interest, but I did notice a change from "let's talk about cars" to "let's rank Amazon purchases". They started getting sponsors for actual cars and it started to feel like a huge car commercial. Then, one episode I was watching (I don't remember which one), they were doing a project and one of them said something about need to hurry because they didn't want to upset the producers. That was a real eye-opener for me and I knew it was some big company that was in control.
DRS was such an incredible podcast, I miss it a ton. For me it was just so perfect in every way. Thanks for putting it all into a perspective, very well explained. Looking forward to all the future content! (PS. Im the girl dad from last episode’s mail segment! Thank you all for the positive message)
@@AlanisKingI miss it too. I never got word that it wasn’t coming back so even though we are 10-11 races into the season, I periodically check my podcasts to see if there is a new one. 😢
Different model. RU-vid is not their business. It is how they choose to spend a portion of their marketing budget. Their goal is not to make money on content directly. It's to develop an attachment with car enthusiasts, a portion of whom will think of Hagerty first when they want to insure that badass new car they just got.
This same thing happened with Car Throttle in the UK. 3 channels split off from one. And now all 3 and way more successful than the original channel that's still running.
@@AlanisKing I'd say that is def a part of it. People were not really loyal to CT, they were to Alex, Edwin, Ethan and Jack. Ever since Ethan, Jack and Edwin quit CT's socials have been on fire (in the bad way), and the new stuff CT is doing is not really working, bc no one cares about the new hosts and formats.
Had been following CT for a while.. when Alex left I kept watching the Edwin/Jack/Ethan videos when they did some.. now that they left too I haven't looked at a single new videos from CT.. The content from the three new channels is so great thou! Wondering if the same thing will happen with Donut and eventually the older staff will all be dragged away from Donut.. besides.. where the hell is James Pumphrey?
@@AlanisKing I totally agree they missed the mark on what exactly their audience were loyal too. And that fact that loyalty works both ways. It's I'll keep your audience coming back but if you mistreat what they are loyal to then you become the enemy. It's happening in repeat it seems.
I'm really happy that basically the whole of youtube is talking about this, because I've had about enough of rich people sucking the life out of other people's talents by cutting out what made the product great in the first place and then expecting the base to just blindly keep following The Brand based entirely on habit instead of substance.
@@AlanisKing I'm glad youtube's talking about it because I'm getting recommended videos like yours, and it's leading me to find a bunch of great automotive content creators
The problem with Jalopnik is they got way too political during the Trump years. They went full left not even understanding their audience isn’t some woke EV driving soccer dad but Hector running a 10-second Civic in Georgia. I still get on Jalopnik but only to troll the EV article comments sections.
@@Jay-jb2vr Yeah!!! Watched James video, on pandemic, everyone's at Donut become content creator. Then they realize, they can do this by themself and make everything they want. No bosses.
RU-vid is paying less and less to content creators, the bean counters get nervous, the creative people get stifled. Content matters, the suits don't. Adding management layers is counterproductive.
A private equity bought my company a few years back. They just layed off like 20 top managers to "align" the locations. AND some people we fired while the exact position a few miles away was opened, they weren't even asked if they'd be willing to transfer to that location to keep their position. Ridiculous
Private equity has been a plague on online media and not just in the automotive space. Multiple video game, music, film, and tech media sites have been gutted because the investors only care about "Line-only-go-up" profit strategies. It's the same story at every outlet that you've described here and all it's doing is ruining the online content space as a place to develop a business/community. The suits at these investment firms don't understand being a creative and only seem to care about getting a quick buck without understanding why the money is coming in in the first place.
They’re a plague on a lot not just media they’ll buy a company sell all there stuff and sell it for a loss as long as they made some money yo show investors
i thought car scene and other crazy stuff media are the only types of media thats going to fall after the involvement of the invsestment firm, because the people working on it tend to be wild and dont like to be told. seems like im wrong..
I was a Jalopnik regular and attended some irl gatherings from around 2007 to 2015 and the downfall was sad. Almost every car website fell the same way, unfortunately. I'm so glad you're still online sharing cars with us!
Yes! At the time (and now) we worked in media in high-cost areas of America. I’m not passing an opinion on the salary; I’m just telling you that it’s what I made for the lowest position at my company
@@tim3172how dafuq you can complain about that? Come to my country to see the real expensive places US typical complaining,60k per mounth? Gosh,you have any idea how many people are homeless and you shits complain about 60k? People are dumber ams dumber every day If its too expensive,get another house in another place,simple as that.....repeat 60k
All depends on if they were paid cash or stock. The stock is worthless. Cash is cool though. You stay on for a bit and make your own YT channel and start over.
0:08 "15 million subscribers each" - Donut currently has a little less than 9 million subscribers, Hoonigan 5,7 million. This is such a simple thing to check, it's almost like you did it on purpose.
There have been quite a few videos on this topic already, but you somehow managed to put a new spin on the info, AND provide even more information that as an audience we may not have been able to quite grasp. As an aside: why did you leave cars and bids? Up until recently, yours and Doug’s were the only watchable videos.
@@AlanisKing I've missed you on cars and bids. So glad I randomly discovered your own channel through this video! Instant sub and will be watching your existing videos
This was a great video, as usual. Man, I miss the F1 podcast. Would be awesome to hear you and Elizabeth do the occasional chat after some big incident race like Austria this past weekend. Miss you on Cars and Bids stuff as well. Keep it up!
Selling a business to private equity is like selling a functional car to a scrapyard. They'll milk what use they can out of it then gut it for parts. Too often businesses and brands get sold when they can still be turned around, like that same car being sent to scrap just because it has a bad alternator
When everyone is making big power with Chinese turbos, how long does it take for the penny pinching OEMs to follow suit with more EcoBombs. It's Ford vs Ferrari until Ford turns into Ferrari 😢
As a miniature channel myself, who is a tiny crumb in a world of 3 course meals, one concern I have, not only for myself, but others, is over-saturation. The one thing that always happens when larger channels with a group of people split into their own channels, instead of 1 channel, it becomes 3-6 different ones. Over the course of time, this means more and more people to subscribe to, videos to watch, and overall a build up of extreme saturation, which leaves viewers burnt out. This causes an effect where viewers will purge the channels they subscribe to, or outright stop watching. Content is king, but this has happened in the past, and my concern is now I don't have enough time to watch all of it, so I have to pick and choose, or even sometimes, go to something else altogether. I might be alone in this line of thinking, but it has happened in the Food and Gaming spaces of RU-vid a few years ago. Although Automotive content is Niche, and even within that niche is more niches, it is probably one of the most saturated forms of content available on RU-vid, hence why channels like Cleetus and even Bigtime have been on the Trending pages multiple times. RU-vid is the only spot for car content, as it suits the format better than any other. Great video, happy to hear you are doing your own thing. Good luck!
I totally get what you're saying. Years ago I consistently watched every Game Theory and Binging with Babish video that was posted, and eventually when they grew so large to the point of new hosts and different content/spinoff channels it became overwhelming to keep up with what I originally enjoyed.
I can't remember the last time I watched MCM, I'm not enjoying it as much in the "new" garage. I've watched since they were in the driveway (Marty's mom?)
Your content seems very informative, not for me though. I don't need to see new car reviews when I can't even afford an old POS car. The jealousy will run to strong and I don't need that in my life.
The biggest issue I have with the viewership and userbase, is they run around screaming the sky is falling, but what they dont realize is these media/tech/gaming companies saw a unrealistic growth during the pandemic. So alot of these companies arent imploding, theyre just shrinking back to a realistic growth rate.
its been three years though (nearly four) since it ended. I'd say the biggest factor is not being aware about corporations. people did point out that they didn't like it so much for a good while, but once it was revealed that it was bought out years ago then people started leaving. I was mostly fine for a while since the hosts were there (I was mainly there for wheelhouse though since it was the last thing out of the good shows left, d-list did continue but it was more focused on horsepower and acceleration than being weird and unique) and seemed to be themselves but later on I felt like they were not so enthusiastic about the content
It seems like it's a really really straight foward analysis here. When Private equity firms get involved in anything creative, their (the firms that is) only goal is maximizing profits and cutting losses. Operating with anything less than a growing business model is a failure to them
@@thiswillprobhrt Petrolicious was acquired by Propulsion Media. Afshin Behnia being a braindead MAGAt (redundant) led to them being in a vulnerable financial position when they were acquired.
this is about the sixth different channel i've seen cover it. all the exact same information. free money and the chance to piggyback larger channels regardless of whether it needed to be covered AGAIN is free money, I guess.
Hopefully what’s been going on lately is a cautionary tale for us content creators of the future. Especially when it comes to entrepreneurship opportunities with people we decide to work with.
What will happen? PE will tire of it, withdraw money from it, sattle it with debt, sell it and then the new company won't pay off the new debt and file for chapter 7.
Alanis, this type of long(ish) form deep-dive, with frank and informative content is *exactly* what I personally connect with. Your respectful-but-honest explanation of the situation with Donut and others taught me more about the industry in 17 minutes than I thought I'd *ever* understand. Thank you and--most importantly for you at this stage--SUBSCRIBED. Best of luck to you, your hubby, and your channel!
Ahhhh I'm so honored. Thank you so much. I'll try to do more of this when the opportunity arises - I love just sitting down and talking to y'all in the video and comments!
Thanks for sharing what happens behind the camera of our favorite RU-vid channels. I love the independent car channels, but a few big commercial ones like Hagerty’s always impressed me. I think that it does come down to whether the big media company understands car culture as much as they understand business strategy.
I’m still trying to figure out why if money people come in calling to buy your business or get an ownership stake in it that you would ever allow them to do it? Because you KNOW they’re just gonna screw it up. Greed?
Unfortunately with private investing across all industries the investors always expect growth and growth is not always sustainable. This results in cut corners and layoffs to artificially show growth by reducing costs, and I think new media in particular collapses immediately when you take out what made it work in the first place.
Thank you giving your resumé at the start so your biases are upfront. Many ppl hide there bias and there material shows why Great video! My 2 fav ppl on Donut left and I felt that was a statement when 2 most ppl associate with Donut left AT THE SAME TIME. It's a sign
Another car channel that fell apart when the popular talent left was WTF1. When Matt and Tommy were there they were getting a couple of hundred thousand views a video. Now Matt and Tommy have their own channel, P1, and are still getting a couple of hundred thousand views a video. WTF1, meanwhile, has gone through two teams of hosts since they left and are now averaging about 5,000 views per video with 1 million subscribers.
RU-vid is pretty much Cable TV now. Ads getting shoved down our throat and only content that the marketing team deems suitable get created. The reason RU-vid got big was because it was nothing like Cable TV.
Thank you for this it’s really appreciated. I’m a big watcher of RU-vid car channels and it all started with jalopnik. I can imagine any popular channel I like being sold if the top creator died. For instance, if Cleetus crashes his plane or Westin Champlain doesn’t wear his seatbelt and goes through a windshield. It’s bound to happen and in that case their families can sell to a company and retire. They kill the channel but at least they get something.
Unrelated, but interesting timing: At the same time as this happened, there was also people leaving on two other channels I watch to go do something different, but not because of big companies taking it over. Grind Hard Plumbing Co lost Will to do his own channel, and FabRats lost Hunter and Sean, Hunter to go to school, and Sean to pursue his own channel. Not long before, Matts Off Road lost TomTom for his own channel. There seems to be a lot of people on larger channels wanting to make their own channel riding on the coattails of the bigger channel.
AK - Top Gear met the same fate when Clarkson left. Real talk - people need to remember that people like Clarkson are master storytellers. He has real talent. And that talent will rise again in another format. Don't believe me? Watch Clarkson's farm. I've learned more watching him, that I ever would in a classroom.
@@AlanisKing it's so good. I thought it was going to be a dumb scripted cringe show but it doesn't appear to Be, and Jeremy looks like he really cares about learning how to farm and shows real concern for his fellow farmers as well. It's a great watch!
a few years ago, I knew nothing about F1. DTS got me intrigued. DRS got me obsessed. I was super bummed when it was canceled. I always appreciate your takes Alanis.
I think the best way I can describe this is that big youtube channels are increasingly "mr.beastified". Donut is basically just mr beast videos about cars. Instead of "i gave children 100000$ if they stay in a cube" it's "I gave grown man a car if they complete this trail"
I can connect with BigTime content a lot more than the cookie cutter Donut media stuff now. We wanted UptoSpeed and Money Pitt but they continue to make the usual safe content
Enshittification. Investors. Capitalism. These things ruin every art medium we love. But it's hard to resist a buyout. Focusing on growth over content leads to this. Users and viewers don't care about how much you grow this year or next, they care about the quality of the content. Creators love the create, and the viewers love to consume. Big dollar signs from investors and PE ruin this dynamic, sooner or later. It's sad. And then the founders leave and the cycle repeats.
Ford v. Dodge Motor Co. was one of the worst Supreme Court decisions in terms of unintended consequences. What was supposed to be a decision saying that a business owner can't wantonly devalue his company to the detriment of investors has morphed into "companies exist to make shareholders value". Business schools have taught this case as business dogma for decades now. Private equity firms take this idea to the hilt and plunder any company they touch, either killing it or leaving a shambling husk in their wake. They'll dismantle a company so a bunch of suits can show "line goes up" for a while as the company they plundered begins a permanent slide towards mediocrity and failure.
The donut controversy is what brought me to this video, I gave it a like and this comment to help your engagement. Good luck with the channel. I noticed the change in Donut on a subconscious level, I am bored to tears with the listicle episodes and really miss the good stuff like money pit.
Im not an automotive youtuber but i've been part of smaller companies that were acquired by larger firms. The heart and soul of smaller outfits is always lost as the larger corporation tries create homogeneity among its brands. The employees become frustrated as outside forces that are often no where near the actual company and not directly familiar with the day operations try to make decisions.
Donut will survive as long as James and Nolan are still there... but Hoonigan is already dead. No offense to Gary, but he was a late edition side character and is basically all that is left. They could have survived Ken's passing, but that would have needed an all-in passionate dedication from Scotto, Ron, Vin, etc. and the involvement of the Block family. Since they were already sold when Ken died, the writing was on the wall. RIP Hoonigan.
Thank you for breaking down the pros and cons of investment firms buying media companies! Your personal experience is a good example of what happens when a big company restricts your creative freedom. I'm always looking forward to you releasing new videos!
Yep, I abandoned Jalopnik and never looked back after they changed. They also started hiring creators that placed political views and I wasn't going there to see that crap, I was going for the auto content. If I want politics I'll go to a regular news site.
These media people sound weak & whiny. "I only started at $60,000 a year & the bosses won't let me do whatever I want, wah". Welcome to the real world buddy!
The thing about donut hosts is that most of love their personalities so it doesn’t really matter what they create we will watch because we enjoy their laughs, voices, phrases etc. Not common for most you tube creators though
its the same with really good IT people, we leave big companies for own or much smaller companies and work as consultants. we dont want to work and being employed at big an square companies there rules and bureaucracy are most important. and often the pay is really bad at big companies.
Man, I miss the days of auto RU-vid during the early 2010s my first big company that fell apart that I miss was fast lane daily. Sad to see what’s happening at Donut
One of the metrics Jimmy (Mr Beast) uses is his past 10 videos metric. I think his time horizon is the first 24 hours. How many views in that time frame. If a video has more views than 7 of the most recent 10 videos after 24 hours, its clearly moving in the right direction, if not... its time to innovate or change something up. I think this mindset is what has made him the best RU-vidr currently, and he reinvests SO MUCH back into his channel. If what he is saying is true, most of his net worth is actually tied up in the value of the brand and the company, not in his checking account. I think this is really important for creators to take note and be cautious not to take a huge pay day to the detriment of the channel.
