Inside the business of being a YouTube star

YouTube personalities Anthony Padilla, left, and Ian Hecox, better known as Smosh, attend the premiere of “Smosh: The Movie” in Westwood, Calif., July 22, 2015.
Imeh Akpanudosen | Getty Images

July 24 will be the date that Ian Hecox and Anthony Padilla—best known to their legions of online fans as Smosh—will never forget.

The comedy duo is releasing their first feature film "Smosh: The Movie" in the U.S., the zenith of a decade of cultivating more than 20.8 million YouTube subscribers, 3 million Twitter followers and upward of 6.8 million page likes on Facebook.

"It's something that we felt would always be cool," Hecox said. "It's something our fans have asked for for a long, long time."

"We never thought we'd get the opportunity to do it though," Padilla added.

Sticking with the online ethos, the film—which was co-produced by online production house Defy Media and multichannel network AwesomenessTV Films—was shot at studio YouTube Space in Los Angeles. While it won't get a major theatrical release, the film can easily be purchased on iTunes and Vimeo.

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It's also one of the first films led by YouTubers that has Hollywood backing. Screenwriters Eric Falconer and Steve Marmel—best known for their work on "How I Met Your Mother" and "The Sarah Silverman Program"—penned the script. Alex Winter, aka Bill from "Bill & Ted's Excellent Adventure," directed the film. It's being distributed by 20th Century Fox in the U.S.

Teen loyalists and curiosity seekers won't be the only ones interested. Given the growth in popularity of online content, brands are looking to digital entertainers as a way to reach Generation Z and millennials.

"Every brand has something on the Internet, whether it's video or doing something on social media," Padilla said. "It's just another form that brands are starting to realize they have to be a part of."

If the movie does indeed propel Smosh into mainstream stardom, it could only mean a further expansion of their online empire.

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"We have an audience that we have generated good will with for the last 10 years," said Barry Blumberg, chief content officer at Defy Media. "We hope to appeal to that audience, but we really hope that we produced that film that will expand beyond the people that watch them regularly."

The growth of digital video

YouTube alone has more than 1 billion users, and 300 hours of video are uploaded to the platform every minute.

"Part of what YouTube has done such a good job of marketing is that these new stars are the stars of tomorrow. ... It's all centered on the authenticity. Even though it's a one-to-many communication, it feels like a one-to-one communication. If somebody is logging on to watch PewDiePie, they feel like they've discovered something their parents don't watch or that is not readily available," online influencer tracking platform Zefr co-founder Rich Raddon said.

In a 2014 survey conducted by Jeetendr Sehdev of the University of Southern California and published by Variety, Smosh was named as the most influential celebrity among 13- to 18-year-olds. They beat out the likes of Paul Walker, Jennifer Lawrence and Katy Perry, who came in sixth, seventh and ninth respectively.

"The power of YouTube stars comes from the fact they are off script and on point," said Jeetendr Sehdev, a University of Southern California marketing professor who led the study. "Brands want to partner with celebrities that are going to move social change. It's not about numbers but influence."

The Pew Research Center reported that last year $50.7 billion was spent on digital advertising, up 13 percent from the previous year. Legacy companies like Coke and Buick are increasingly using YouTubers in their campaign. Top influencers can expect to take in $1,000 to $2,000 for an Instagram, and between $40,000 to $50,000 for a customized branded video.

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For example, "Do Not Disturb" is a Web series hosted by Taryn Southern where she interviews fellow YouTubers about life on the road. It was created by Marriott Content Studios to promote its contemporary brand aimed at millennials, Moxy Hotels, which will launch in the U.S. later this year.

"They have a built in audience that wants to watch them and engage with them," said David Beebe, vice president of content marketing at Marriott International. "A lot of them are smart, they're not just setting up cameras and talking to people. They understand the business. They understand the ancillary businesses that can be built off their celebrities."

The Tale of Smosh

Smosh's name was born when a friend accidentally said "smosh pit" instead of mosh pit. The duo began making videos for their high school friends in Padilla's bedroom in 2002. Clips were mostly of them lip syncing childhood show theme songs, which they would post on their MySpace page.

"We were 14, we thought everything was funny," Padilla said.

One friend uploaded a video of them "singing" the Pokemon theme song onto a new platform called YouTube. It became one of the most viewed videos, and they decided to start their own channel in November 2005.

"We were very fortunate to be in YouTube in the very beginning," Hecox said. "There wasn't a lot of content on there so we were pretty easy to find on YouTube. That was really helpful in growing our channel."

Zefr has cited Smosh as one of the main examples of comedy on YouTube. "While Smosh's actual level of humor is debatable, their use of color, randomness, loudness and other devices make them very appealing, and millions of people clearly enjoy it," it wrote.

Big Frame senior talent manager Andrew Graham admitted that not everyone might get Smosh or other types of YouTube humor. But, the fact remains these young entrepreneurs are increasingly getting brand deals, licensed products and best-selling books.

"I don't get a 55-year-old executive being entertained by the content on YouTube," Graham said. "But, you have a whole generation of kids who are entertained by YouTubers, who are speaking in their vernacular. Their kids or your young kids are delighted by it. They have to take into consideration it's not made for them."

Whether you find them funny or not, their level of influence has been noticed by brands, many of whom have tapped the duo to create videos for their products. One of their earliest deals was working with Butterfinger on a three-video contract. Wanting to keep in line with their over-the-top humor, Smosh pitched an idea where they would make fun of the idea that they were selling out. To their surprise, Butterfinger was on board with the parody.

"They liked us because the audience responds to us, and to do that we need to do what we do without being altered," Padilla said. "The audience isn't searching the Internet for a commercial."

More companies began recruiting them, including Hot Pockets, HP and Ubisoft. The branded video Smosh did for the "Assassin's Creed 3," a parody song about the video game, still remains one of their most successful clips on YouTube. To date, it's been viewed more than 66 million times.

In 2011, Smosh was acquired by Alloy Digital. The company eventually joined forces with Break Media, and is known today as Defy Media. Soon, the brand expanded to include channels for their Spanish and French audiences, animated videos and gaming content vertical Smosh Games. During the 2015 Digital Content NewFronts, it added new permanent members and expansion series, including the new sketch show "Every [Blank] Ever." Then, there's the feature film.

"Our biggest hope is that our audience really enjoys it, and sees us doing something bigger and out of our comfort zone," Padilla said. "We don't have a goal of being famous or a household name."

However, if they get there, it won't be a bad thing.

Clarification: An earlier version of this story misstated the source of a survey on the celebrity preferences of U.S. teens.