What's Next? $30M Alloy Investment Proves Smosh is Some Serious Fun

by P.J. Bednarski, Mar 8, 2013, 3:05 PM

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Shut up! I can’t say that was the first thing I said when I heard that Alloy Digital, which operates the mega-successful YouTube channel, Smosh, secured a $30 million investment from ABS Capital Partners on Thursday, but it’s close enough and “Shut up” happens to be the sort-of official motto of the channel. It's screamed in nearly every video by the 25-year old creators, Ian Hecox and Anthony Padilla.

Smosh is the most popular of the Alloy channels; it is, in fact, the most subscribed to YouTube channel with over 6.8 million subscribers, including me, a dead drag on Smosh’s demo, which hovers more in the 18-24-year old area.

Smosh and the other Alloy-owned online video companies like Generate, Clevver Media; and The Escapist have a purposely ragged look but might surprise you for how competently their videos are produced. Alloy has something like 12 million subscribers and is one of the biggest sensations in the online video world that virtually no one outside of that world has ever heard of. Its trick, in a business that dotes on what’s-happening-at-exactly-this-moment, is being there with the next Smosh, and the ones after that.  

ABS Capital General Partner Deric Emry says Alloy is “perfectly positioned as major brands increasingly direct advertising dollars online, following a coveted demographic that has embraced multi-platform, digital media entertainment consumption.”

Though its videos might be just five minutes long and Smosh’s stuff isn’t elaborate, the material is  remarkably solid, consistent and well-paced.

Since it’s started Smosh has over 2 billion views, detailed, with a fond disregard for the milestone, in the Smosh video, “Holy Crap! 2 Billion Views,” which itself has earned 3.8 milion views in the last two months. In a lot of ways, that video, and a lot of Smosh fare, sounds like a 21^st Century version of Mad magazine, as opposed to the more intellectual pretensions of say, “Saturday Night Live.”  

This is about the point that, in the past, it would have been time to speculate how Smosh, Padilla and Hecox are in some way going to end up on television, which might be true (I’d bet on it) , but seems, in this case kind of backward-thinking. Smosh and those guys exist as a kind of successor to television, it seems to me. Though they’re after the same demographic, Smosh is very far away from what’s on TV, even the stuff that aims at teens and particularly boys-to-men.

In online video, the structure for which It Takes a Major TV Network was once the book to read no longer seems very true.  OTT and smart TVs are collapsing the television model. A channel can mogulize in a minute without the traditional structure.

“Our strategy is similar to how traditional media companies broadly approach content and intellectual property,” Allloy Digital CEO Matt Diamond told TheWrap.com after the latest financing. “We have a hit show and the monetization and marketing engine quickly gets around that with merchandise, international syndication and domestic syndication."

In the case of Smosh, it’s built on a solid foundation that certainly takes a lot from TV. Early on, Alloy recognized that programming, even on YouTube, needs to have a consistency—about how good it is, when it shows up on the site and how regularly it’s refreshed—and how much each channel promotes the other. Smosh is a lot of laughs, and Alloy makes it a serious business.

pjbednarski@comcast.net 

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