Why Fred Soured on YouTube

Fred, the squeaky voiced YouTube star your kids love but you hate, generates 30 million views a month, has headlined a movie on Nickeloedeon, will soon make the jump to a major theatrical release and has nabbed ad deals with the likes of  Universal Pictures and Sony.

Thus, it would seem that Fred would be an easy sell for YouTube and its surging sales force. So what is Fred doing working with Blip.tv?  Is YouTube not cutting it as a sales partner?

During a press event yesterday executives from Blip and The Collective — the Los Angeles, Calif.-based production firm behind Fred, The Annoying Orange, and several other Web series — announced a partnership that will see Blip acting as a distributor and sales agent for Collective properties.“This is about layering awesome on top of awesome,” explained Blip.tv CEO Mike Hudack.

According to The Collective CEO Michael Green, YouTube has been a strong partner for Fred and Orange and will continue to be. But many of Fred’s deals were done directly with advertisers, which are tough to scale and might not be YouTube’s specialty. A company like Blip might be able to guarantee CPMs more than YouTube can.

“We have substantially less content to focus on. YouTube has the world’s content,” Dan Weinstein, a partner at Collective Digital Studio, told Digiday. “This [arrangement] may be more effecitve for some brands. The more people looking at our content the better. But in no way are we dissapointed in YouTube’s performance.”

In fact, Fred is sold out for the next few months, added Weinstein.

YouTube executives declined to comment, but did provide this diplomatic statement: “It’s great to see our most successful Partners continue to grow and develop into big online video brands, and look for entrepreneurial ways of further distributing and marketing their content and connecting with audiences.”

Regarding distribution, does it really get much bigger than YouTube? Jeff Hinz, managing partner/digital director of MediaCom U.S., buys the idea that Fred can, and probably should shoot for a bigger reach outside the YouTube universe. “Fred needs to get distribution with ease,” he said. You can’t get that turn key distribution with YouTube. So it’s a big win for Blip.”

While it’s certainly a win for Blip to have a handful of well-known properties to sell — the company has primarily focused on mid-tail Web series with smaller, dedicated followings — it begs the question why The Collective needs any help selling Fred at all.

There are few options on the Web or in the media business at whole, for advertisers looking to reach Fred’s dedicated kids 8-to-14 tween demographic. Shouldn’t Google’s phone be ringing off the hook?

Sean Black, COO JL Media, who works with kids brands like Topps, theorized that when it comes to letting their kids surf the Web, YouTube may not always be the first choice of many parents. And that could hinder ad sales.

“It’s not a YouTube issue, it’s a kids issue,” he said. “If Fred is looking for distribution, YouTube is great. But my sense is that many parents are not simply letting their kids surf the Web freely or go to YouTube. That’s more of an issue.”