Lonelygirl15 and YouTube's First Product Placement Deal

Our interview of Greg Goodfried for “The Creative Influencer” podcast is available today for download on iTunes.  Greg shared the following:  

Jon: And, then on July 4th, there was a post “My Parents Suck.” Tell me about that post.

Greg: At that point, there was Bree. She was home schooled, she kind of lived somewhere in middle America, she was kind of religious but we didn’t really talk about that, we just dangled it out there. She also had this next-door neighbor Daniel, who was her friend. They wanted to go hiking one day, and her parents didn’t let her, so she got very upset. I think we probably uploaded the video around 10 or 11 at night. A big part of it was, unlike television where you see the same show 9 o’clock on Thursday nights, we were like hey, if the character makes a video at night, we upload at night. If the character makes a video in the morning, we upload it in the morning. So we uploaded the video, her face right to the camera, called “My Parents Suck,” complaining about how she couldn’t go hiking with Daniel. The previous five or six videos—the first one got 1000 views, the second one got 5000, the next one got 30,000 views, we were like, “crazy.” This video got 500,000 views in about 48 hours and you could see in real time the views. We all were looking around at each other thinking cable television shows do not get 500,000 views. What did we just do?

Jon: In the early days of YouTube, how did you monetize the channel?

Greg: We did not monetize the channel. We used life savings and we asked parents for money. And this was before Google had bought YouTube, so this was still when YouTube was the complete wild west, there were no ads, no integrations. We had people reaching out to us basically saying, “Hey, will you talk about our products?” But again, it was supposed to be a 16-year-old girl so we couldn’t answer, and we would just ignore that stuff.

The other thing is being a lawyer, I set some rules around it which were, number 1, we can’t lie to the audience. So if somebody says to us, leaves a comment or makes a response video, “Hey Bree, are you real or are you an actress?” we would just ignore that. If someone said, “Hey Bree, how are things with your parents or Daniel?” we’d answer because it’s in character.

The second thing we did was we didn’t sell anything. So no merchandise, no product placement, no advertising, because the law firm I was at handled a Milli Vanilli case, and there was a huge class action against a record label for selling something on a false pretense, so we’re not going to sell shirts that people think they’re buying from a 16 year-old.

Jon: So actually, the traditional press started writing about it.

Greg: What happened was, YouTube just became this juggernaut. As YouTube captured the attention of the world and was talked about in every newspaper, every magazine, every news show, the number one thing on YouTube was Lonelygirl15. So people would do stories and they’d say, “Hey here’s YouTube, here’s what it is, here’s how people are using it, here’s this girl she’s amazingly famous, we don’t really know a lot about her because she doesn’t tell a lot about herself, blah, blah.” Then we’d start getting people emailing saying, “Bree, we want to write a feature on you, we want to write a story, and we want an answer.” So, I think that made anybody who was sophisticated be like a lot of kids would take this as a moment to try to be famous, she’s shunning it. And then we really did start ratcheting things up, dropping hints and clues about this crazy life that she was part of. And that’s where it very much splintered to 75 to 80 percent of the audience knowing it’s fake but not having a clue of what it is, and then the rest holding on, hoping she’s real.

Jon: When does an influencer need an agent?

Greg: I think when they hit some type of consistent, large fan base. I pretty much specialize in YouTube so if you just have an Instagram account, there isn’t enough there for me to do. If you’re a YouTube person, because you make video content, you’re much more 360 and well rounded. If you start consistently getting 100,000 views a video, every video, and you’re in a category where brands are excited about you, I think you need an agent at that time.

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A transcript of the full interview follows:

Jon: Today I’m joined by Greg Goodfried, welcome to the podcast.

Greg: Thanks for having me.

Jon: Greg is the head of digital talent at UTA and, we’ll get into that later, has a great story to tell that I want to ask about.

Greg: Sure.

Jon: It’s going to make a lot more sense when I ask you a little bit about your background first and then we’ll jump into your story. Where’d you go to undergrad?

Greg: Berkeley for undergrad.

Jon: When you say for undergrad, that implies that you went someplace else.

Greg: I went to law school. I went to UCLA for law school.

Jon: And did you practice for a period of time?

Greg: God, it must’ve been somewhere between 90 and 120 days. I sat down at my office at a law firm called Mitchell Silberberg & Knupp and knew right away being a lawyer wasn’t for me, so I found another job.

Jon: To set the scene, just to put this in context of the time, YouTube launched in the sense that they registered their domain name and trademark on Valentine’s Day, 2005. In May, the beta launched. In December, it went live to the public and in June, there was a video that was posted called what?

Greg: “Lonelygirl15.”

Jon: What is “Lonelygirl15?”

Greg: So around that time period, I was a young lawyer at a firm that did a lot of copyright law, copyright litigation for the Motion Picture Association, record labels, and paying a lot of attention to these new platforms that were allowing people to upload content. So, myself and a friend of mine, this guy named Miles Beckett who was a doctor, we were looking at YouTube, looking at Myspace, seeing what was out there since we both hated our jobs. He hated being a doctor, I hated being a lawyer, and we were trying to figure out what to do next.

We saw this platform, YouTube, where people were creating their own accounts and uploading videos. Half of the people on YouTube were basically stealing clips from television and uploading them on their YouTube channels. Being a copyright lawyer, that was not a career for me. The other half were teenagers turning on a camera and either lip synching songs, telling funny stories, or talking about their life, doing what we now call video blogs. And we had the idea– what if one of these people that we’re watching who’s telling us their story every day was all make believe, and they were layering this narrative in front of us—

Jon: So you had this discussion, spoiler alert, before it ever launched?

Greg: Yeah, we had this discussion in February or March of 2006. So about three months after people started uploading YouTube videos.

Jon: And did you have any reason to believe that at that point any of the videos that were already up were just fake?

Greg: No, we thought they were all real kids. It was definitely more just like wow, wouldn’t it be cool if you’re watching one of these people and then something insane started happening in their life, and you’d have no reason to know one way or the other, and maybe you could help because it was an interactive platform. So that was the lightbulb.

Jon: So you were sitting, talking, having this discussion, and what did you do next?

Greg: We started basically putting the idea together. We wrote a little treatment of what the story would be, what the characters would be, and put a three-month story arc together. There was another guy named Mesh Flinders, who did it with us as well, who had some screenwriting background. Then, we started doing some of the business stuff, so we put contracts together and did a casting for actors and actresses.

Jon: Now how did you do casting for actors and actresses if they couldn’t talk about it?

Greg: We made up a fake, independent film called The Children of Anchor Cove. We went on all the casting websites where independent actors are looking, and we said “indie film, super low budget.” But then we had requirements of no IMDB credits. You couldn’t be a prolific actor. We wanted the completely unknowns.

Jon: At that point it was Myspace, could they be on social media?

Greg: We didn’t say no in the description, but if they came in and they showed us that they had one—we would ask them and if they had a Myspace page that had any more than 10 or 20 friends, they were disqualified. It had to be somebody who could remain anonymous.

Jon: So you had casting?

Greg: Yep.

Jon: How many people did you cast?

Greg: Well, we saw about fifty actors and fifty actresses. Needless to say, they were not the greatest fifty actors and actresses because the requirement is no credits. So you know, needle in a haystack. This girl named Jessica Rose came in the room. She had just moved here from New Zealand. She was homeschooled in New Zealand, she came over to the US to do makeup. She worked on I think one of the Lord of the Rings movies as just a total extra assistant to somebody and got the bug. Came out here, went to acting school, started hosting for it, no friends, no social media, no credits, or any of that stuff. And then we saw an actor. This guy named Yousef Abu-Taleb who also was a good fit for the character and also had the same criteria of not a very popular dude.

(laughter)

Jon: That would be a good thing. So what was the character’s name?

Greg: Her name was Bree.

Jon: And how old was Bree?

Greg: Bree was 16 at the time she uploaded her first video. So the concept was her username was Lonelygirl15, which is when you create your first email address, you put your age then, so this was a year later, theoretically, that she created her YouTube account Lonelygirl15.

Jon: And she describes herself as a dork. I mean she’s a cute girl, cute actress, how did you decide we should have your cute actress be a dork?

Greg: The audience that was on YouTube. So YouTube, like any early tech platform—it’s all the early adopters that go to the platform, and we kind of felt that the audience that is going to be on the platform is going to be guys who like technology, that read Wired Magazine, go on Reddit, those types of things. We were going to try to create their fantasy girl who’s somebody attractive and interesting but reads Richard Feynman, obsessed with physics, and is quirky and dorky. And then the Daniel character, we wanted him to be somebody who was those guys. He also knows how to edit, make videos, understands the internet. So we created somebody that was an archetype of who we thought was watching YouTube and somebody who could be everyone’s kind of fantasy person.

Jon: In the beginning, how often did Bree, and I put Bree in air quotes, post?

Greg: Once a week.  I think the first two videos that we did were actually kind of homage videos to about ten of the top YouTubers. So we would take their clips, chop them up, layer a song over it and it was just saying to the world we love what you all are doing, here’s a little tribute to you guys. And then the first video that was starring Bree was end of May/early June 2006.

Jon: It was June 16, 2006.

Greg: It’s been 12 years now, that’s wild.

Jon: And at the end of it she’s making funny faces—

Greg: —to the Gnarls Barkley song Crazy. So, I was a lawyer and I was working at the firm, and I was definitely handling more the business stuff in the very early days, and Miles and Mesh were the ones that were able to go to the apartment and shoot the videos. And then they would get sent to me, and I would give notes and then we’d all upload it together. To this day, I remember watching that video and I was like “Wow, this is pretty good,” and the Gnarls Barkley part came up and just goosebumps, hair on my arms, and I was like “Oh, we have something that’s going to capture people’s imagination.”

Jon: I mean if you didn’t know, and people didn’t know, watching that first video, it did look, although it looked really slick, it looked like somebody just did it.

Greg: Our definite mantra was be the best 16-year-old editor that you can possibly be. Don’t be a 25-year-old who can go buy fancy equipment and has taken classes in it. So we recorded things on the webcam on the laptop itself so that the it looked right, we used natural lighting from the window, we used a desk lamp—nothing professional because it would’ve been exposed right away.

Jon: And, then on July 4th, there was a post “My Parents Suck.”

Greg: Yep.

Jon: Tell me about that post.

Greg: At that point, there was Bree. She was home schooled, she lived somewhere in middle America, she was kind of religious

but we didn’t really talk about that, we just dangled it out there. She also had this next-door neighbor Daniel, who was her friend. They wanted to go hiking one day, and her parents didn’t let her, so she got very upset. I think we probably uploaded the video around 10 or 11 at night. A big part of it was, unlike television where you see the same show 9 o’clock on Thursday nights, we were like hey, if the character makes a video at night, we upload at night. If the character makes a video in the morning, we upload it in the morning. So we uploaded the video, her face right to the camera, called “My Parents Suck,” complaining about how she couldn’t go hiking with Daniel. The previous five or six videos—the first one got 1000 views, the second one got 5000, the next one got 30,000 views, we were like, “crazy.” This video got 500,000 views in about 48 hours and you could see in real time the views. We all were looking around at each other thinking cable television shows do not get 500,000 views. What did we just do?

Jon: (laughter) What just happened here? Now when you first started this idea, what was the end game?

Greg: The pitch to ourselves, to our parents who we raised a little money from, to our friends who we could disclose it to that didn’t think we were too crazy, was this was basically a teaser for a movie. We are going to launch this character Bree on YouTube, this guy Daniel. We’re going to let the audience know that she’s in some type of secret cult-type society, there might be bad guys after her, that’s going to go on for about three months. We’re going to ratchet up the tension behind it that she might be in trouble, and then three months in, we’re going to upload a final video of her and Daniel getting in a car telling all her fans, “Wish us luck, we’re probably never going to see each other again, but we need to leave and escape the bad guys,” upload that video, and drive away. And the next day we were going to announce this is fictional, but here’s the feature film. It is a 90-minute documentary-style video of a group of kids from the YouTube community who are out on the search to save Bree and save the day. Go to Lonelygirl15.com, pay 10 bucks, and buy this movie that we made. Maybe sell 100,000 copies or a million copies and make some money. That was the pitch, we did not do that second part.

Jon: So the series was a hit then after July 4th?

Greg: After July 4th, yep.

Jon: At one point, it was the most subscribed channel on YouTube?

Greg: Yep.

Jon: In the early days of YouTube, how did you monetize the channel?

Greg: We did not monetize the channel. We used life savings and we asked parents for money. This was before Google had bought YouTube, so this was still when YouTube was the complete wild west. There’s no ads, there’s no integrations, we couldn’t even—we had people reaching out to us basically saying, “Hey, will you talk about our products?” But again, it was supposed to be a 16-year-old girl so we couldn’t answer, and we would just ignore that stuff.

The other thing is being a lawyer, I set some rules around it which were, number 1, we can’t lie to the audience. So if somebody says to us, leaves a comment or makes a response video, “Hey Bree, are you real or are you an actress?” we would just ignore that. If someone said, “Hey Bree, how are things with your parents or Daniel?” we’d answer because it’s in character.

The second thing we did was we didn’t sell anything. So no merchandise, no product placement, no advertising, because the law firm I was at handled a Milli Vanilli case, and there was a huge class action against a record label for selling something on a false pretense, so we’re not going to sell shirts that people think they’re buying from a 16 year-old.

Jon: For those who don’t remember Milli Vanilli—

Greg: —two popstars that were lip synching songs but became massive superstars and toured and sold albums and then you find out that they were all guys lip synching. And the label got in big trouble.

Jon: And you were talking about the comments.

Greg: Yes.

Jon: Who did the comments?

Greg: My wife. So pretty quickly, within a video or two, we were doing the comments ourselves, me, Miles and Mesh, and people were asking stuff about what she’s wearing, what hair stuff she uses, perfume, blah blah blah—

Jon: And how old were you at the time?

Greg: 2006, I was 27.

Jon: So you had to channel your inner 16 year-old girl.

Greg: My inner 16 year-old girl was not very prolific, so my wife came on board and she ran the YouTube page, Myspace page, and did all the interactive engagement with the community.

Jon: And was there a strategy she used when she was responding to the comments?

Greg: There were so many, so I think it was just do as many as you can. She was working at the time at CAA, the talent agency, and she was an assistant to one of the big execs over there, and she would do as much as she could to get the work done for him and then jump online for an hour, answer a ton of questions, answer emails, and then go back and just engage, make people feel it’s real.

Jon: When were there suspicions that Bree wasn’t real?

Greg: Very early on. Probably around that July 4th time or shortly after, I think a lot of people felt that the narrative was very tight, that every day she would come on, she’d do something cute and fun but then she’d dangle something. She started becoming super popular. We’d turn on Good Morning America and they’d have a clip of Lonelygirl15; we’d open newspapers and they’d talk about Lonelygirl15.

Jon: So actually, the traditional press started writing about it.

Greg: What happened was, YouTube just became this juggernaut. As YouTube captured the attention of the world and was talked about in every newspaper, every magazine, every news show, the number one thing on YouTube was Lonelygirl15. So people would do stories and they’d say, “Hey here’s YouTube, here’s what it is, here’s how people are using it, here’s this girl, she’s amazingly famous, we don’t really know a lot about her cause she doesn’t tell a lot about herself, blah, blah.” Then we’d start getting people emailing saying, “Bree, we want to write a feature on you, we want to write a story, and we want an answer.” So, I think that made anybody who was sophisticated be like a lot of kids would take this as a moment to try to be famous, she’s shunning it. And then we really did start ratcheting things up, dropping hints and clues about this crazy life that she was part of. And that’s where it very much splintered to 75 to 80 percent of the audience knowing it’s fake but not having a clue of what it is, and then the rest holding on, hoping she’s real.

Jon: And then you say you kind of ratcheted it up. There was something about a cult or blood—

Greg: So there’s one famous video that was shot, which was Bree in her bedroom with Daniel, and for the previous fifteen videos, the camera was a webcam, so it was locked on a single shot, and you would just see one part of her room. The two of them get into a fight, Daniel picks up the webcam and follows her around the room, and as he’s following her around the room, you see a corner of the room that you’ve never seen the first two months, and there’s this shrine to this cult leader named Aleister Crowley, who was a lunatic. Aleister Crowley was friends with Hitler and L. Ron Hubbard, just a maniac in the early 1900s who actually started Satanism and paganism.

And we don’t even address it, we just upload the video. Within two seconds of the video, every single comment is a link to Wikipedia about Aleister Crowley, screenshots, conversations, and the fan base just went crazy.

So then we were like, “Yes, we got them where we want them.” Then we made a fake story about Aleister Crowley that he discovered around the world, one out of every million girls are born with a certain blood trait. If you can take the blood from their body and transfuse it into your body, you can live another life cycle. They have magical blood. So if you could do that over and over and over, it’s a fountain of youth. You can live forever. So Aleister Crowley and this group of guys started a secret society called The Order. They controlled blood banks and maternity wards around the world for the purpose of testing infant baby girls. When they would find one of these baby girls, they would kidnap them from their parents and raise them in this crazy religion.

Jon: How many adult beverages were consumed coming up with this?

Greg: Adult beverages and things that are now legal in California and all sorts of fun stuff made for very interesting writing sessions.

We knew that people would be obsessed with the character and that they would love Bree and they would be into it. But we also knew that in some point in time, we were going to want to let people know that it’s fictional. When you let people know it’s fictional, they’re not going to like the character just for her anymore, they’re going to want to know a story. So that’s where we were like when this thing becomes fictional, it better be like Lost or like Buffy the Vampire Slayer, like there better be big stakes going on, and so that’s how we created his whole thing.

Jon: And then how did it come out? How was Bree outed?

Greg: It was wild. So a big number of factors. There was basically a group of people—we created a website from day one called Lonelygirl15.com and we called it a fan site, and actually some people thought that fans made this website. There were forums and message boards and hundreds of thousands of people on it, but we could read all the messages. So we could see—

Jon: —so that’s how the different people would compare different notes on—

Greg: --that’s right. And so one day, somebody came and said we know who Bree is because they basically took screenshots of like ten videos, they circled all the products in the videos, a couple of videos were outdoors. They found plants inside the videos, they went and had botanists let them know what type of plants that they were, and they were like, “The only place where these plants exist and these products are in stores that are within 100 miles of each other is Tempe, Arizona.”

And there was a lead up for days and days, like it’s in Tempe, Arizona, and people like were going out there, so—

Jon: —and this was really shot in LA—

Greg: It was shot in LA, it was not Tempe, Arizona. So they just kept getting closer and closer and closer. We’re working harder and harder and harder. The two big moments were one, my wife was at CAA and she was answering as the character. A lawyer from Michigan, a reporter from the LA Times, and some guy from Texas got together on the forum, created a fake Myspace page, put IP tracking software on the Myspace page, lured a man that has the character on Myspace to basically click on their page, the second she went and clicked on their page, it showed the IP address as CAA. So then they call CAA, CAA has no idea what’s going on, they deny it, they somehow get in touch with my wife, we go in and tell them the story. Cover story the next day in the LA Times is “Lonelygirl15 linked to CAA.”

Then, a couple days later, my dad, who was a lawyer, registered all the trademarks for Lonelygirl15 because we knew when it came out, we wanted to sell products. Somebody was searching the US Patent Trademark Office every single day, and finally it became a public record. And Ken Goodfried, attorney in Encino, is a thing. And then they started doing all the work. We were probably 24 hours away from being fully exposed by the New York Times, and we knew this, so we called the LA Times, the Associated Press, and we broke the story.

Jon: So you outed yourselves?

Greg: We outed ourselves, primarily for the purpose of controlling the story. We didn’t want it to come out that we’re three jerks that are trying to be mean to kids and play a hoax and deceive people. Our whole thing was this is a new medium, and at any time there’s a new medium, there’s ways to play and experiment with the medium. And so just like Orson Wells did War of the Worlds, just like Blair Witch Project did Independent Film, we found this amazing new platform to upload content and interact with people and we wanted to tell a story. That was certainly our PR angle.

Jon: What was the interim—you had to know at some point you were going to get outed.

Greg: Yeah, for sure.

Jon: And did you have a plan in place?

Greg: There was a three-week period where I was sleeping under my bed in the fetal position because there were literally a couple hundred thousand people that were trying to scour through every single of our lives to figure out who we were. They found out who my sister was, they found out stuff about my parents, I was getting calls from everyone. They found out my work phone number, there was a moment of time for like a week where I couldn’t even pick up my phone at the office because it was being called so often. There was some lunatic from somewhere around the world on it. It got very scary. The internet is a weird place. Internet sleuths are interesting people, so it was intimidating.

When we came out, it almost felt like we were free. Our message was “we’re going to continue telling the story of Lonelygirl if people want to keep watching it,” and we just continued. That same day we came out, we did a press release with our story, we went and shot a Lonelygirl video and uploaded it that afternoon.

Jon: And did the viewership increase, decrease, what happened to it?

Greg: It increased ten times. It went from averaging three to four hundred thousand views to three to four million views a video. And then we’d get some videos that were getting thirty million views, fifty million views. It was crazy.

Jon: And at this point did they have monetization yet?

Greg: The first thing we did after coming out publicly was start to do some brand deals. So we did a deal with Hershey’s. They have this gum called Ice Breakers, so we did the first product placement ever, I think, for a YouTube video or blog.

Then Neutrogena approached us and wanted to do a whole big multi-month-long campaign because they liked the audience that we had. So we created a character that was a scientist who worked at Neutrogena and had some special serum that could help cure these girls. So he became a recurring character, he wore a lab coat all the time, we called him Mr. Neutrogena. It was perfect, and it was goofy.

Then, the interesting thing happened where YouTube was bought by Google right around this time. They reached out to us, realizing we were a lawyer and a doctor and a little more sophisticated. They flew us up to San Bruno to YouTube’s offices, they had conference rooms, and we sat in the Lonelygirl15 conference room with the CEO and Founders of YouTube, told them our story, told them who we were, and they said, “What do you guys need?”

We needed AdSense, but they didn’t have AdSense, so over a conference table, we sketched out what became the current day YouTube Partner Program, where we said, “Listen. We’ll continue uploading as many videos as we’ve been historically making. Give us some tens of thousands of dollars per month to be able to cover production costs, and sign a year-long contract.” So we did that.

And then Myspace, my cousin is one of founders of Myspace. Interesting little side note, how I know a lot about this space was because of him. He came to us and said, “What could we do with you guys?” And we said, “Well we have this big season finale that we want to do. We want to make this crazy extreme thing. Why don’t you guys buy the rights to the season finale?” So we sold that to Myspace, YouTube did the partner program, started doing brand integrations, and that’s what we did for a while.

Jon: I didn’t remember seeing ads on there. Are there ads on there now?

Greg: Oh, I mean it’s there. All the videos are there. It’s fully monetized, you can watch it.

The other fascinating thing that happened was we did Lonelygirl for two years. The first three months people thought it was a real girl. The next year, nine months, it was a fictional show. About six or seven months into Lonelygirl, we were already out publicly that we were a production company. We started getting approached by foreign companies. So, a company from London called Bebo, which was a big social network, came to us and said, “We want you to do a show on our platform.” We said, “Great, we’ll do a spin-off of Lonelygirl. It’s going to be fictional from day one in the same weird universe. So, we did a Lonelygirl15 in London. We basically flew out there, spent a month out there, hired a whole crew, top people had to do it, we had offices in London, offices in LA. Then a Polish company came to us. We did a Lonelygirl15 in Poland. Then an Italian company, then a Japanese company. So we started doing international format rights around this IP that we built, without even knowing how to do it. People would send us a contract and we’d sit down and read the contract and say, “I don’t like this term, I don’t like that term, and taught ourselves to do it.”

Jon: Was there ever a time where Bree slash Jessica was out in public and was recognized?

Greg: Early days, one day she comes to us, maybe like a month and a half in, when the show’s pretty popular, she was at Barnes and Noble, and she was standing looking at a book, and two teenage girls came up to her and started singing Crazy by Gnarls Barkley. She freaked out, ran out of there, came back and told us.

So we sit around and say two things. Number one, you can’t go outside anymore. This is not going to go on forever, but stay in your house, we’ll bring you food, and we’ll do whatever you need. There’s too much at stake here. And the other thing we did was we were nervous that people were going to go in the comments and say, “Hey, I just saw this girl at Barnes and Noble in Santa Monica.” So we created about twenty fake YouTube accounts and we did what we would call counter intelligence. 24 was a big show at the time. Jack Bauer was this awesome character, and we were like how do we do counter surveillance type stuff? So we would go in the YouTube comments and every once in a while we would be like, “I just saw Bree in New Mexico. I just saw Bree in Kansas City.” It just confused the whole thing so much so that if somebody else popped up and said, “No, I saw Bree at the Barnes and Noble in Pasadena, everyone would just be like, “Everyone sees Bree. Who knows?” It was always us just playing around.

Jon: Was there problem in recruiting the actress?

Greg: Yes, when we sat her down and told her what the actual project was, that it was an internet video show and that she could not tell anybody that she’s in it or that she’s doing it, she looked at us, she picked up her keys, and she got up at the table and walked out of the door. Miles was there and chased after her and said, “Listen, I’m a doctor. We have lawyers, we’re good. This is going to be amazing, just trust us.” After some deliberating, she ended up trusting us. But, her first instinct was this is porn, and I need to get out of here immediately.

Jon: This is LA.

Greg: This is LA, and you’re doing some weird thing on the internet.

Jon: How’d it work out for her? I mean has she continued an acting career?

Greg: So Jess, the second that it became public, got the traditional agent-manager-lawyer-publicist team that a lot of personalities get, got interesting roles on a TV pilot, an independent film, and the real answer I think she would tell you this day is she just wasn’t ready. We cast her because she was a very green actress. And so our positioning was stick with Lonelygirl for a while. Do this for the next year or two. Get better and better, take classes, do all the stuff you now can do, make money, do roles, do endorsement deals. Her team around her was just like “No, we’ve got to strike while the iron’s hot and put her on a show and then hope that that takes off,” and it didn’t work for her. So unfortunately, as they kept pushing us and saying to us Jess is not going to be able to work with you guys two days a month, we were like, “She’s the star of our show, we need her full time, we have her in our contract.” It got really tense, and me being the lawyer and I guess future agent at the time, in one heated phone call said, “Fine, we’re going to kill off our character.” They called my bluff, and said, “Okay, go do it.” I went back to Miles and was like, “We either have to take this stand or we’re going to be screwed and not have a show,” and so we wrote this whole thing. Part of it was also we wanted to pay off to the audience that the stakes are really high where if she gets caught by these bad guys and they do drain her blood, she dies. So we did it, we did our big season finale on Myspace, and they drained her blood. They killed Bree, and it was wild.

And we invented this thing for Myspace, it was called a twelve and twelve. At this point we were uploading a video almost every day, and we told our fans, “The season finale of Lonelygirl15, tune in on this particular day,” and we uploaded twelve videos over twelve hours. So on the hour, every hour, we’d upload a video—

Jon: —very Jack Bauer-esque.

Greg: –very Jack Bauer-esque. And then we also brought in real world stuff. We would basically say at the sixth hour, kids need to get to the Santa Monica Pier and find an envelope taped under a bench. We’d reveal on the second hour that this envelope is there and that the fans need to help us find it, and we would know ten, twelve people from somewhere in LA are just going to show up at this bench. Then we’d have that sixth video shot, but we’d leave like 20 seconds of blank space to see who shows up, we’d go there, we’d film the whole thing.

Jon: How many people would actually show up?

Greg: Some places a hundred people would show up. We did a couple of these real-world things. We did one in San Francisco. Sometimes we have a hundred people show up. This one because it was real-time, we had like ten people show up. Then we’d have Bree run into the scene. These people would freak out, they wouldn’t even understand what is going on, they’d hand Bree the envelope, she’d take the envelope, run off, we’d film that, run into the car, edit that bit of footage into video number six, and then when it hit the sixth hour, upload that video.

Jon: Now the lawyer in you, did you have them sign releases?

Greg: I didn’t. At this point guns blazing, this is the internet. There are certain things we’re going to get in massive trouble for, there’s lots of other things that it doesn’t matter.

Jon: Yeah. When you were at the height, how many writers were involved?

Greg: There was definitely a moment where we had probably thirteen total people working on Lonelygirl, and I think it was four writers. There was basically the head writer, there was a team of staff writers, there was a full-time director, there was full-time camera, full-time editor, production assistant. Amanda was now the executive producer of the show, Miles and I were off building this company that we were building, so overseeing the London show, overseeing the—

Jon: —and that’s LG15?

Greg: Yes, it was LG15 studios that then morphed into EQAL but yeah, it became a bigger team in LA. There was about 13 people

in LA and 15 people in London.

Jon: And what happened to your wife at CAA?

Greg: She quit of her own volition. Once it came out, again it was like three months after we started that it came out, she worked for another month, and then our world became so crazy that she quit her job and came to work full-time for us.

Jon: So you created this EQAL, is that how you pronounce, “equal?”

Greg: Yep, “equal” with no “u.”

Jon: And what was the concept for that company?

Greg: It originally started out as a studio. We were going to finance and distribute our own intellectual property, and the reason we called it EQAL was because two guys with a webcam and internet connection can build an audience equal to Time Warner or CBS or ESPN. That was our vision, so the internet kind of democratized the ability to make and distribute content. We were going to launch our own shows, and then we were going to figure out how to exploit and monetize IP online—that was the thesis. It is not what it ultimately became.

Jon: What did it ultimately become?

Greg: We quickly realized the costs of making it are going to far exceed the revenues that are coming in because even if you can amass a million people, the ad rates that you can get on a YouTube series are 1/100th of what you can get on a television show. But you still need a lot of smart talented people to make it, and then that was number one. Number two the economy collapsed. So this was like right in the middle of 2008. So the Neutrogena’s and the Hershey’s that were coming to us, their experimental budget of giving money to a web series is the first thing to go. So that was the negative.

The positive that we saw was celebrities were starting to embrace social media. Ashton Kutcher was competing with Larry King for Twitter followers, Shaq was building his Twitter audience, and we were like man, all we care about is eyeballs on content for the cheapest rate humanly possible. So, our new vision was why don’t we go out to celebrities and basically say to them, “We’ll take over your social media website online content, produce all the content and build your audience, build a huge community around you through content—

Jon: —wait, celebrities aren’t doing it themselves?

Greg: They are now. In 2008 and 2009, they all knew they needed to have Twitter, they all knew they needed to have a Facebook, but they were intimidated by it. Their people around them, their publicist and lawyers did not want them to do it. We were an amazing solution. We were with people like Jennifer Lopez and Lauren Conrad and Bethany Frankel, and it wasn’t just here’s a picture of me with my kid, it was content. It was like here’s an article of “10 Cool Trends for the Summer” or “How to Pair Really Great Sunglasses with whatever.” So we kind of made these almost like little magazine properties.

Jon: And then, to come full circle to the start, you joined UTA.

Greg: In 2012, the company had 100 employees, it had a ton of celebrities, tons of brands we were working with, we sold the company to a big media company in New York called Everyday Health, which was a great exit for me, Miles, and the investors in the company. I had an 18-month thing called an earn out, where I basically had to work for the guys that bought us to get the second half of my stock and equity. When that ran its course, I was like okay, what’s next for me in life. I love content, I love the internet, I love working with personalities. I knew the guys at UTA, so they offered me a job to come here and help build out the digital department.

Jon: And you’re the head of digital talent.

Greg: So when I first got here, it was January 2014. I honestly did not know what I was going to do. I wasn’t really an agent. I kind of just ran around the building, worked with our top tier celebrities about how they can have a digital strategy, but the YouTube stuff kept creeping back into my life where friends that were big YouTube stars said, “Oh you’re an agent now, why don’t you be my agent?” and then I just saw the tidal wave. The people that are doing well on YouTube right now in 2014, by the time it hits 2016 or 2020 are going to be superstars. My theory was any brand trying to reach a 12 to 25-year-old—that kid is not watching regular TV. They’re not watching commercials, they’re not reading magazines, they’re immune to billboards, banner ads, they’re going to love these personality-based people on their phone, and I want to be the guy that represents the biggest and the best.

My sons don’t even have TVs. I have a nine-year-old and he knows two properties. He knows YouTube and he knows Netflix. And, he’s just getting to basketball, so he kind of knows ESPN, but there’s no chance he knows what CBS is. I don’t think he knows what NBC is, he and all his friends—

Jon: —the entire generation is coming through like that.

Greg: Absolutely, and I think from a content standpoint, I was very close in terms of what I consume to my parents. My parents were probably close to their parents. This is going to be the biggest generational shift of consumption habits, I’m 39, of my generation to consumption habits for kids.

Jon: So for the agents that are representing traditional movie stars, television actors, versus what you do, what’s the difference?

Greg: I’d say their role is a lot more around content that their clients are making and placing them in that content and selling that content to buyers. So they’re trying to get actors jobs on TV shows. They’re trying to get writers and producers to sell TV shows to studios and networks, trying to package movies and sell them to studios. My clients already make the content. They wake up each day, they make content, and they push it out to their fans. I don’t have to help them get eyeballs on their content or get into content, but what I try to help them with is how to maximize the value of this audience that they have achieved. So how to work with brands to do sponsorships or endorsement deals and promote products, how to create their own companies whether it’s consumer products, whether it’s apps, whether it’s digital properties, and build companies that their audience purchases and consumes. And all the other things you can do when you’re famous. You can have a podcast, you can go on tour, you can write books.

Jon: And your reference to having the podcast was not about me, it was about a mutual client that’s launching a podcast.

Greg: That’s right. You can do a lot of stuff when you’re famous and amass a huge audience. The wonderful part of it, though, is they don’t call me up each day and say, “I’m not working.” My other colleagues here have writers, directors, producers, actors who are not working. My clients are never not working because it’s their own audience. They decide whatever they want to do.

Jon: When does an influencer need an agent?

Greg: I think when they hit some type of consistent, large fan base. I pretty much specialize in YouTube so if you just have an Instagram account, there isn’t enough there for me to do. If you’re a YouTube person, because you make video content, you’re much more 360 and well rounded. If you start consistently getting 100,000 views a video, every video, and you’re in a category where brands are excited about you, I think you need an agent at that time.

Jon: How would somebody go about finding an agent? Say you’re in that category, how would they find an agent?

Greg: I mean, listen, all the big agencies – UTA, CAA, WME – have big digital talent departments, so scratch and claw to find that out. Go on LinkedIn, go on Twitter, go on Instagram. I think that if you get into that threshold too, you probably have friends who have an agent. Here’s what I would tell you: if you don’t know how to get it, or you can’t easily get to one, you’re not ready for one.

(laughter)

Jon: Okay, fair enough. Being a lawyer, in what way does it hurt?

Greg: Here’s the thing. I was a lawyer for literally 90 days, and I was the worst lawyer of all time—

Jon: —and you have three years of law school you have to unlearn.

Greg: Yes, I’d say I think it hurts by paralysis by analysis. A lot of those things, you can look at every single thing and see all the problems and then say because of these myriad of problems I’m seeing, I’m not going to be able to do something, and I think as an agent, certainly as an agent of the digital space, you’ve got to move fast. You have to be comfortable with things not always being perfect and buttoned up, feeling like we’ll just get through it and if you are in your own way with what law school teaches you to do, which is to look at a situation, recognize a ton of problems, and anticipate those problems, you’ll freak yourself out.

Same problem with being an entrepreneur and being a lawyer—it would be challenging.

Jon: Do you work with influencers that are under 18?

Greg: Sure.

Jon: Are there such thing as stage parents for YouTubers?

Greg: Yes.

(laughter)

Greg: The answer is yes.

Jon: And are you required to set up Coogan Accounts?

Greg: Yes, when they make money. The second they start making money, there’s Coogan Accounts.

Jon: How do you deal with the, and I put deal in quotes, how do you deal with the parents?

Greg: Pretty early on, you start encouraging the parents to bring managers onto the team. So, we’re agents, most of the clients have managers. The way I describe it is agents do the deals, managers help the client execute the deals and execute all parts of their day to day life.  So there are amazing professional managers who understand the work flow, the pace, the strategic decisions. And I’m pretty honest with parents. I definitely say to them, “Listen, I get that you’re in your child’s life; you’ve only seen this one time, why don’t you be with a person who’s seen this 20 or 30 times, who really understands the ins and outs.” I’ve had a couple parents over time relinquish the control to people, I’ve had a couple parents who I’ve parted ways with because they didn’t relinquish the control, and it was too exhausting for me.

Jon: This is to put your lawyer hat back on, what role do you see SAG having in this going forward?

Greg: I mean hopefully none. I think that—

Jon: —because they’re making a push to get involved.

Greg: Yeah. Listen, I think it’s much more in the world of unscripted TV and daytime television, which again I don’t really know how much the SAG stuff applies to all that, I don’t think a lot because nobody’s reading scripts. So all my clients are personalities. They get up there, they turn on a camera, they talk about makeup or clothes or food or whatnot and so I think that SAG historically is protecting actors. They’re protecting actors from being taken advantage of by producers and studios, not getting residuals, working too much, working in dangerous environments—that’s fantastic. The movie and TV industry needs those protections because actors are very vulnerable people. YouTubers are not vulnerable. Nobody’s telling them when to wake up, nobody’s telling them when to go to bed, nobody’s telling them what to make. So I think that there’s not the need to protect these people.

Jon: Shifting gears, what’s the next big thing?

Greg: What’s the next big thing? That’s a good question. I don’t think it’s some dramatic big thing, but I do think there’s going to be tons—all these people now are going to continue to get massively bigger. So I think there’s going to be the big YouTubers and digital stars now going to get—

Jon: —just continue to grow?

Greg: Yeah, what would’ve been a fifty-thousand-dollar campaign is now a five hundred-thousand-dollar campaign. I think they’re goanna be making—you’re going to have the exposure and the money that the giant pop stars make, the giant movie stars make. I think you’re going to walk down to a Target or a Walmart, instead of seeing licensing with your favorite musicians, you’re going to see products that are led by YouTubers.

The other thing I think you’re going to see is the whole turnover of consumer products. The way I equate it is if I go to a store, and I see a shelf of products and that shelf of products is all the same brand that I went and saw when I was 12, I think they’re all going to be obliterated because the whole new generation that’s coming up is going to be in love with these types of stars, in love with their own brands, and you’re seeing a Supreme or a Glossier, or these things are just crushing it now. So I think you’re going to see a lot of entrepreneurialism here.

Jon: I’m going to end with two personal questions.

Greg: Sure.

Jon: You’re a self-described scratch golfer. How long have you played?

Greg: Oh, I picked up my first club when I was five. When I was five, six, seven, I would play with my dad a lot and then when I was 10, I became addicted to the game. From 10 until 19, I played 300+ rounds a year. I played college golf at Berkeley. Then, after my first year of college golf, I put the clubs in the trunk, and I said, “I’m never touching them again.” I just burnt out on golf. Few years later, picked them back up and rekindled the love, and now I’m obsessed with the game again.

Jon: And the second one, as I read, you consider yourself to be the best foosball player of the three creators.

(laughter)

Greg: Probably, I think so.

Jon: Well I’ll challenge you because I grew up with a foosball table in my garage.

Greg: Oh there you go, love that. I did have a foosball table in the house. I was good when I was a kid, but I don’t know how good I am now. I had pretty good coordination as a kid.

Jon: If somebody wants to get ahold of you, can they find you on social media?

Greg: Sure, I’m on Twitter, @GregGoodfried. I’m on Instagram @ggoodfried, so feel free to follow me there and send a note.

Jon: Thank you very much, this was great.

Greg: Thanks Jon, my pleasure.