In October, Ray William Johnson left Maker Studios and tried to announce this in one of his videos in as nice a way as possible.  Unfortunately, there's no right way to say "Maker Studios and I are not together anymore," without people wondering, "What happened?" or "Who did the dumping, and why?"  But everyone was laying low, saying the right things.  RWJ was creating his own production studio, Runaway Planet.  But then things got interesting yesterday when Johnson went to our friends at Newmediarockstars to write an article and aired out all the dirty laundry.  And it was here that YouTube networks get their first big tabloid story.

We're Not Picking Sides: But the Story Has A Moral

Here's a basic episode of "=3," where Johnson casually mentions his split with Maker:

Johnson claims that the now-CEO of Maker, Danny Zappin, admitted to Ray he was a "convicted felon" and was waiting for his record to be expunged so he could become CEO.  Ray says this was the first red flag, but he doesn't judge people for what they have or have not done.  Of course, this part of the story could have been left out, because the reasons Johnson left Maker are all in a new contract they wanted him to sign.  Zappin's "convicted felon" remark seems to be thrown in to needle the CEO, even if it's true.

At some point, Johnson claims, Maker wanted to renegotiate his contract that would be expiring in 8 months.  He didn't want to do it, but he felt that since Maker had let go of "a significant percentage of their employees," he wanted to help out with a bigger cut of his revenue.  However, the terms laid down to him were: 40% of his YouTube channel's AdSense revenue and 50% of intellectual property rights for "=3" (the show for which he is known) until eternity.  So Johnson refused, and then he claims Maker became more aggressive in their negotiations, to the point that they started threatening the shutting down of his projects: an album he had been working on for nearly a year called "Your Favorite Martian," and ultimately, "=3" itself, which they eventually did.

It was then that Johnson broke from the studio and started making "=3" from his apartment.  And he was silent about it until late last month when he told New Media Rock Stars:

I don’t know everything there is to know about Youtube-based networks, but as far as I do know, there’s no good reason to ever sign your Youtube Adsense account over to a 3rd party. Ever. Period. Anything a Youtube-based network wants to do for you, they can accomplish without seizing control of your Adsense account. If you want production or managerial assistance, then partner with a production entity or manager and pay them a percentage of your expected revenue, but don’t sign your Adsense over to them.

Furthermore, from a business perspective, there’s no long-term business plan in owning a collection of thousands of Youtube Adsense accounts. Again, I say this having somewhat limited knowledge of every single Youtube-based network out there. I know there are dozens of them (networks) at this point, and who knows, maybe some of them are doing great things.

Two weeks later, Johnson really dropped a bomb about what he claimed Maker had done to him.  And then it got into a big "Twitter war," with Johnson saying:


Later on, CEO Danny Zappin sent a text to Johnson, which Johnson then used Instagram to show his followers the text he got, telling him he "has no integrity" and to "prepare for war."  I've edited the full text because it has some bad language, but you can click here to see it all.

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Johnson has photos of the contract and e-mails to back him up in the article he wrote for New Media Rock Stars.

Then SourceFed commented on it:

Joining A YouTube Network Is A Huge Decision: Be Cautious

The issue is important because joining a network is an important decision an up-and-coming online video creator has to make.  You should never feel pressured to sign any contract and of course, always have a lawyer take a look at it to make sure the language is appropriate and you won't be signing away your soul.

ReelSEO's Tim Schmoyer discussed a lot of this in a recent video about whether or not you should join a YouTube Network:

Obviously, things between Maker and RWJ were fine until the renegotiation came up.  And he's come out of it saying he doesn't feel anyone should ever give up their YouTube AdSense account, that plenty of money can be made from other streams.

Anyway, the online community got a good taste of a public, tabloid-like story yesterday.  Hopefully this can be spun into a positive by the time it's all over.

  • Henry

    TLDR -

    If that contract is genuine, the proposed terms seem too unbalanced; "50% of IP" and "40% revenue sharing". I'd be scared to see what they negotiate with their lesser known channels. You may have to sign your life away.

    RWJ signed to Maker Studio when he was either the 2nd, 3rd or 4th most subscribed channel on YouTube. While there, he did become the most subscribed channel on YouTube. I don't doubt he would of reached that milestone on his own, but I feel he got there quicker with the studio's staff, studio space, editors and maybe writers etc. The celebrity cameos didn't hurt either.

    My point in laying all of this out is to ask you this question, what benefits does a 'Top Channel' get by signing to a YouTube Network?

    The power in negotiations seem to lie in RWJ court. He's 'left' the studio and started his own in conjunction with Julian Smith. Maker have nothing to offer the guy from a production point of view, considering he was doing it on his own beforehand.

    If I was RWJ and negotiations hit a deadlock I'd:-

    1. Not renegotiate revenue sharing; Maker's the party that 'needs' the money.

    2. Put the album on hold; record another one without Maker's resources.

    3. Take back the Adsense account after the contract expires.

    This dispute hurts the image of the studio more, mainly discouraging potential channels from signing to the Maker network. RWJ can write, shoot and edit his show anywhere.