3 months ago
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Matthew Patrick’s most unique achievement isn’t that he grew his YouTube account into a multi-channel media business with over 40 million subscribers. It’s that he managed to sell his company and successfully transition away from a career that’s so hard, both emotionally and logistically, to leave.
In an emotional video posted earlier this year, Patrick – known as MatPat online – shocked viewers with his decision to step away from his illustrious career. He explained, “I don’t love late nights. I don’t love the fact that [my wife] Steph and I have been work-first for over a decade, where I’m sitting down at dinner with my best friend, and we’re talking about business logistics… I miss the days when I could just sit down on the couch with her and play video games, and it’s not for content.”
When other YouTubers quit, they usually just stop uploading videos and move onto other pursuits. Even for YouTubers big enough to think about selling their channels, exits remain notoriously difficult in the industry. Their businesses are already considered risky to buyers, because they’re so dependent on the whims of social platforms like YouTube, Instagram and TikTok. And creators themselves are central to their companies’ brands, which makes it hard for buyers to gauge how crucial their involvement is to the channel’s success.
Yet MatPat got the media company Lunar X to take over his company, Theorist Media, in a transition process that took a few years to complete and gave him enough money to retire. (He won’t disclose the exact amount.)
“We had conversations with 10 different companies,” MatPat told TechCrunch. “We ended up just going with a product that liked us for the brand, that recognized that we had spent the last 10 years developing a very solid, very recognizable, very beloved brand.”
Turning YouTube into a full-time career is a dream, but it’s not sustainable forever. As the creator economy matures, Theorist – which employs 22 full-time staff and around 20 freelancers – is being viewed as a blueprint for how creators can make this sort of business transition.
“Creator media companies are so key person-led, that it’s a vulnerability,” Hank Green, a longtime creator and entrepreneur, told TechCrunch. “When you die, or when you want to retire, it just ends, and that’s kind of sad. It’s like, did I build a thing that will outlast me, that I can take a break for the first time in 10 years?”
Green’s oldest channel vlogbrothers, for example, probably couldn’t be acquired – it’s a seventeen-year-long series in which he and his brother John make videos back and forth to one another. You can’t take the titular brothers out of vlogbrothers.
“Even that was something that was part of the valuation process,” MatPat said. “How person-centric is Theorist, and if we as a company acquire them, are we beholden to that?”
But according to MatPat, Theorist was well-positioned to transition to new hosts, because the formats of its shows are more easily reproducible. Though MatPat’s personality drove the channel’s initial popularity, the formats of his videos made it a bit easier to onboard new hosts. On Game Theory, his main channel, MatPat would analyze video games in deep detail and make explainer videos about his theories. But with the right writers, another host can mimic the format and quality of his videos.
“It’s an unproven ecosystem right now. We were one of the first successful acquisitions and successful transitions in the space,” he said. “But we know after we did our acquisition, we got a lot of calls from other YouTubers who are looking to sell.”
Lobbying for creators
Though MatPat retired from YouTube, he’s still pretty busy. In fact, he’s been spending a lot of time on Capitol Hill. Now that he isn’t making videos anymore, he wants to use his position as one of the most successful YouTubers ever to educate legislators about what creators need as small businesses.
“It’s weird to be in a position where I, YouTuber MatPat, who just had this big exit from the platform and is very well known in this space, am suddenly like, no man in Washington, being a literal salesperson for a $250 billion industry,” he said.
He’s more than happy to take a hit to the ego for the sake of his industry. MatPat and his wife Stephanie – who was a co-owner and COO of Theorist Media – feel strongly that their representatives need to understand how creator businesses operate. According to Goldman Sachs, the creator economy could be worth half a trillion dollars by 2027. Oxford Economics estimates that YouTube’s creative ecosystem supported over 390,000 full-time equivalent jobs in 2022.
“We’re trying to educate lawmakers about what the creator economy is, and that it’s an actual job and that we are actually small businesses, and as a result, there are certain tax codes and things that apply to small businesses,” Patrick told TechCrunch. “Even when you talk to accountants, they’re like, well are you though? Because there’s not a clear indicator on tax forms – like, what is a creator business?”
Legislators are notoriously behind on the times when it comes to technology. It’s hard for some elected officials to conceptualize how Facebook itself makes money, let alone how creators are using social media platforms to start multi-million-dollar businesses. When TechCrunch met MatPat at Vidcon, he had recently returned from a trip to Capitol Hill, where he realized just how far we have to go.
“The other week when we [spoke with legislators], it was like, ‘Question one, what is Roku, and how is it different from YouTube?’” he said. “Which is telling about where we’re starting from.”
Without much regulatory oversight or understanding of their work, creators and their businesses are left vulnerable. It’s hard to be a self-employed business owner, but being financially dependent on big tech platforms further complicates things. Even a small algorithm change can impact a creator’s ability to reach an audience, and less views means less money. In terms of brand deals and partnerships, there are no industry standards for pay.
“This isn’t just relevant to New York and California. The biggest creators are coming from all parts of the US,” MatPat said. “When we were on Capitol Hill, we were meeting with our local district representative, and we were like, ‘Hey, are you aware that the largest YouTuber in the world is in your state?’ and she’s like, ‘Oh yeah, he’s MacBeast, right?’”
Even small policy changes can make a big difference for creators.
“Right now, there’s no designation and official government records that say like, ‘I am a content creator by trade. I make a bulk of my income through creating content, video, social content, whatever that is,’” he said. “Then a lawmaker can see, ‘Oh, my district in the middle of Iowa has a lot of content creators, this is an important part of my constituency.’”
The creator industry is often delegitimized – making online videos sounds like a hobby, rather than a career. More children are saying their dream job is to be a YouTuber, but only a small fraction of a percentage of aspiring creators will make enough money to stay afloat. But the way MatPat sees it, aspiring creators can learn a lot of transferable skills from YouTube.
“I do think it is absolutely valid and encourage anyone to start a YouTube channel with the hope of becoming a successful YouTuber, because the skills you get from doing that apply to so many different worlds,” MatPat said. Creators need to master public speaking, scriptwriting, video editing, filming, social media marketing, data analysis, and more. “One of the things I’m hopeful for is that people figure out that there are transferable skills, where it’s like, maybe I wasn’t doing this exact job, but I learned all of these things by doing YouTube, which applies.”
MatPat’s exit pushed the industry forward by showing that it’s possible to retire, and he’s hoping to make even more waves on Capitol Hill.
“If our legacy is empowering the legacies of the next generation of creators, that’s awesome,” he said. “That’s the best note that I can end on.”
