The Collective helps YouTube stars go mainstream

Lucas Cruikshank and his hyperactive Fred character had millions of YouTube fans and a line of merchandise when Hollywood came calling.

Then a manager from the Collective pitched the Nebraska teenager a vision for his squeaky-voiced character that would result, three years later, in a holiday album, three made-for-TV movies, and a series on Nickelodeon.

“So many people in the industry didn’t know if you could take something on the Internet and cross it over to mainstream TV and movies,” said Cruikshank, now 18. “It felt really good to prove them wrong.”

Cruikshank is among a growing roster of digital producers and performers represented by the Collective, a management company that specializes in Internet talent. The firm’s clients include some of the biggest names on YouTube, including Dane Boedigheimer, creator of Annoying Orange; Freddie Wong and Brandon Laatsch, the filmmakers behind the channel freddiew; musician and sketch comedy performer Shane Dawson; and humorist Justine Ezarik of iJustine.

The Collective’s Beverly Hills address screams old Hollywood. But unlike its neighbors William Morris Endeavor Entertainment and United Talent Agency, the Collective’s digital clients make up more than 50% of its business. The firm positions itself as a one-stop shop for YouTube’s breakout acts, who have grown accustomed to doing everything for themselves. The Collective identifies opportunities for clients and also co-produces projects through its digital studio, performs marketing services, sells advertising and sponsorships — and shares in the proceeds.

“I had an epiphany, and the epiphany was centered around disintermediation,” said Collective Chief Executive Michael Green, co-founder of an earlier management company, the Firm. “If you remove that third-party distributor, or you reduce their value in the proposition, I felt like I could capture more value as an entrepreneur … on behalf of creators and artists.”

Green founded the Collective in 2005 with partners Sam Maydew and Jeff Golenberg. The firm’s work with comedian Katt Williams enabled Green to test his theory about the Internet’s power to connect artists with their fans. The Collective financed a comedy special, licensed it to premium cable channel HBO and produced a DVD, “The Pimp Chronicles Pt. 1,” which it marketed directly to Williams’ fans via a website. Williams ended up selling 3 million DVDs and attracting the interest of Live Nation Entertainment Inc., which paid him $18 million to do a comedy tour.

“We don’t look at it as a linear proposition: ‘Let’s make a special and license it to TV, and sell a boatload of DVDs and downloads,’” said Gary Binkow, who joined the company in 2006 and runs its production arm. “We look at it as ‘How do we help an artist create a business that extends to multiple revenue streams including touring, merchandise, and television and movies.’ And sometimes that may mean giving content away for free to help engage their fan base.”

The Collective applied a similar strategy with Annoying Orange creator Boedigheimer, whom Binkow met in late 2009, shortly after the independent filmmaker launched the comedy Web series in which the animated citrus exchanges puns with a gang of other anthropomorphic fruits and vegetables. The Collective began mapping out a strategy to extend the brand.

The firm brought in creative collaborators, including Tom Sheppard, a writer on the 1990s television series “Pinky and the Brain,” and Conrad Vernon, who directed such DreamWorks Animation films as “Madagascar 3: Europe’s Most Wanted” and “Monsters vs. Aliens.” Over two years, Boedigheimer and the Web series’ co-creators worked with these entertainment industry professionals to turn Annoying Orange into a TV series, using Boedigheimer’s YouTube channel as a focus group.

“With a TV show you spend years or an entire season to figure out which characters the TV audiences connect with,” Binkow said. “Online, you know in about an hour and 47 minutes.”

The approach appears to have paid off. “The High Fructose Adventures of Annoying Orange” appears in Cartoon Network’s Monday night prime-time lineup, where it attracts about 2.4 million viewers on average and ranks No. 1 in its time slot among boys.

YouTube’s head of global content praised the Collective for helping content creators find new sources of revenue

“Anyone who helps diversify [the sources of revenue] is a friend to YouTube,” the online giant’s Robert Kyncl said. “I wish that there were more Collectives.”

The Collective is also grooming the careers of pop singers Megan and Liz Mace.

The twins attracted a YouTube following with their cover versions of Top 40 songs, which they initially began recording and uploading on their laptop computer from their home in a small Michigan town. The duo’s rendition of Demi Lovato’s “Here We Go Again” attracted 1 million views in its first week.

The Collective signed the sisters, took over production of their YouTube channel and teamed them with professional songwriters. This spring, the duo claimed the top prize in the Macy’s iHeartRadio Rising Star contest and were featured in the retailer’s back-to-school ad campaign. Their YouTube videos are also garnering more attention and have attracted more than 168 million views.

“They’re sort of the poster children of how do you organically develop an artist online,” said Reza Izad, the Collective’s music specialist.

As Megan & Liz prepare to release their new single “Bad for Me” to radio this month, they feel they have a shot at breaking through as a mainstream pop act.

“We’ve all worked really hard,” said Liz Mace, 19. “We just hope that it will pay off.”

The Collective’s managers are applying the expertise they gained working with YouTube talent to the established mainstream acts it represents, such as Linkin Park.

One year before the June 26 release of the rock band’s latest album, “Living Things,” the Collective and Linkin Park’s label, Warner Music, began building anticipation across social media sites including Facebook, Twitter, Pinterest and Tumblr.

The social media efforts culminated with a fan-organized Twitter listening party, held worldwide on the day of the album’s release. Listeners clicked “play” simultaneously and shared their reactions in words, photos and videos — and vaulted “Living Things” into the top three trending topics on Twitter worldwide.

“One of their greatest strengths is they are living up to their name,” Linkin Park band member Mike Shinoda said of the Collective. “It’s not about having a manager, it’s about having a group of people who are all good at different things, and that brain trust can work hand in hand with the ideas of the band and make things happen.”