Zach Kornfeld and Keith Habersberger of Try Guys
JD RENES
The Try Guys, one of YouTube’s most established creative groups, successfully broke away from relying on Google’s algorithms and advertiser revenue by launching an independent streaming service called 2nd Try. And it is already starting to bear fruit.
Brand partnerships, sponsored content, and advertising have long been the main revenue channels for creators, but some are turning to subscription services for a more stable income from the unpredictable world of algorithm-driven platforms.
“Having an ad-based business is very volatile and very unpredictable,” Try Guys co-founder Zach Kornfeld told CNBC. “There’s just so much that’s out of your control, and we’ve definitely experienced the worst of it. It’s tenuous at best. It’s abrasive and explosive at worst. It also forces you as a creative to constantly optimize for things that aren’t always in the best interest of your audience. . interest.”
A potential TikTok ban threatens to wipe out nearly $15 billion in annual revenue for small and medium-sized businesses, and YouTube’s ad revenue growth is slowing as creators look for more reliable sources of revenue in an increasingly volatile ad market.
Try Guys now has over 8 million subscribers and 2.7 billion views on YouTube. In May, they announced the launch of a streaming service called 2nd Try, where most of their new videos are behind a paywall and where subscribers can access exclusive content for about $5 a month ad-free. Within three months of launching 2nd Try, the company says it was on track to break even.
Other creators are also trying to recreate the Netflix subscription model. Watcher Entertainment and Dropout are two other popular YouTube channels that have launched subscription-based streaming services to avoid the volatility of social media algorithms.
Social media platforms rely on algorithms to decide what content users will see based on their past interactions and preferences. Algorithms analyze user behavior to create personalized content feeds that prioritize posts that can generate engagement, such as likes or shares. As a result, many creators feel pressure to create algorithm-friendly content, even if they believe it lowers the quality of their work, just to stay visible.
“We’re really happy with how it’s going so far. It’s probably more than we thought we would be at this point,” said co-founder Keith Habersberger. “We have a long way to go. The goal is not to reach that number. The goal is to keep growing and also keep learning, and we’re going to make mistakes.”
Subscription platforms like Patreon allow creators to bypass the algorithm entirely by connecting directly with their most loyal fans who are willing to pay for exclusive content.
“It’s just not a reliable source of income for creative people, and I think over the years creators have learned that and they’re looking for something more stable,” Patreon founder and CEO Jack Conte told CNBC in an interview.
Try Guys had early success with BuzzFeed before launching an independent creative venture in 2018. However, in 2022, they faced a career-defining internet scandal when one of their co-founders and key talent was having an affair with another employee. This damaged the brand relationship and the company was bleeding money to produce new YouTube videos.
“Our company was operating at a loss for two years. We got to the point where it was costing us more money to make shows that our audience loved than we were making from YouTube,” Kornfeld said.
Revenue from Trial 2 represents approximately 20% of the company’s total sales. Try Guys will continue to publish content on YouTube. The platform’s advertising payments remain an important part of its business model. However, Kornfeld and Habersberger emphasize that their primary focus is on the increasing 2nd. Try to be their biggest revenue stream along with product sales and live tours.
