The YouTuber Ethan Klein (37) accuses his agency of having embezzled nearly €600,000 and actually wants to leave as quickly as possible. But that’s not so easy.
What kind of YouTuber is he? Ethan Klein runs the H3 Podcast with his wife Hila, where they interview well-known online personalities, among other things. The associated YouTube channel has 2.87 million subscribers.
In addition, he has his own channel with 359,000 subscribers and the now-defunct channel h3h3 Productions, which still has 6 million fans subscribed. With so many viewers, a lot of money accumulates. To handle these payments, Klein signed a contract with BBTV in 2017.
What is the problem with the agency? BBTV is a so-called Multi-Channel Network. These MCNs are supposed to help YouTubers produce, market, and monetize their content.
However, they have developed a rather dubious reputation in recent years: For example, the German content creator Simon “Unge” Wiefels announced in 2014 that he would no longer upload videos on his channels due to problems with his network Mediakraft and instead focused on a new, independent channel.
Ethan Klein has now posted a series of videos in which he claims that the agency has stolen from him. In the embedded video here, you can watch the YouTuber’s version in English:
Who owns the money?
What is the problem? According to Klein, there is disagreement over the interpretation of the contract. In particular, it concerns the revenues from YouTube’s memberships program. This is a subscription model where fans pay monthly to watch exclusive content from their favorite channels.
The channel membership has only been available on YouTube since mid-2018, by which time Ethan Klein had already signed his contract. The revenues from these memberships are therefore not clearly defined in the contract.
As it became apparent to the YouTuber, BBTV took 30% of the revenues from channel memberships for years, totaling $620,000 or nearly €570,000. Klein believes the money is rightfully his, but the network sees it differently and wants to keep the money.
This is what Klein says: For the YouTuber, channel memberships fall under Google subscriptions, which, according to the contract, also include the paid service YouTube Premium. Therefore, he is entitled to the full revenues.
This is how the network sees it: Klein recounts in his videos discussions with the agency. His contacts at BBTV referred him to the clause for “Other Revenues.” The agency classified channel memberships as another source of income and retained 30% of those according to the contract.
Who is right will have to be decided by a court. Klein announced that he would sue the agency.
Update 12.04.2023, 15:30:
Why did the mistake go unnoticed for so long? As the YouTuber explains, he controlled for years whether everything was in order with the payments. There were never any problems. In recent years, however, he left this responsibility to his accountant.
Only after she was gone did he take another look at the situation and found that she had probably never checked the payments.
Klein: “I must be an idiot”
What happens next? In a second video, Klein gives his fans an update on the situation. In it, he shows the responses of other content creators who have similar arrangements with BBTV and are now in the same situation.
However, Klein now sees a completely different problem: the network is said to have postponed the payments of some YouTubers until the next month. Although Klein himself is not affected, he is concerned:
Why are you paying some people and not others? My worry is that they do not have the money and are about to file for bankruptcy.
For the YouTuber, this was probably the final signal to pull the emergency brake and leave the network as quickly as possible: “I must be an idiot to sit here and allow them to continue collecting my money after everything.”
That’s why it will be expensive: Klein explains that he actually has a notice period of 30 days. If he does not comply, he will have to repay the bonus he received for signing the contract. That would be another $10,000, around €9,000.
The YouTuber is willing to bite the bullet:
So I told myself: You know what, I’m willing to owe them $10,000 to get out of this, because every cent I earn now will still go to them for the next two months.
However, to remove the network from his channels, BBTV apparently still needs to agree, which had not happened by the time the video appeared on April 9. So it remains to be seen whether Klein will get his money back or even have to pay to get out of it.
