How YouTube's 'Binging With Babish' is disrupting the content industry

What does a 15-layer taco mean for the future of video competition? Like the list of its ingredients, the answer is: pretty much everything.

Last week, up-and-coming YouTube star Andrew Rea, who hosts a weekly webcast called "Binging with Babish," celebrated his 1 millionth subscriber with a behind-the-scenes special. During his webcast, Rea drew back the curtain on his minimalist production, which consists of a single Sony digital camera locked on a headless shot of the 29-year-old in the kitchen of his Harlem apartment as he meticulously and hilariously reverse-engineers recipes from classic TV shows and movies.

Rea then got back to business, and, over the course of the eight-minute episode, he re-created and then consumed the deep-fried monstrosity featured in a 2005 "Saturday Night Live" parody fast-food commercial, which included corn husks, a Chicago-style deep dish pizza and blueberry pancakes - all served in a "tote bag filled with spicy vegetarian chili."

The Platinum Age of video is here, and viewers appear ready to consume all 15 layers - professionally produced or ad hoc, mass-market or niche, scripted or spontaneous - on any device with a screen. "Binging with Babish" and other offbeat YouTube channels are on the front lines of a new media revolution, as threatening for today's pay-TV business models as those systems were to broadcast networks just a few decades ago.

Last quarter, for example, Netflix's Internet-based streaming video business added 5 million subscribers. It now has more than twice as many paying customers as DirecTV and Comcast combined, with much of the growth coming from mobile users. This year, original programming from Amazon Video, Hulu and Netflix accounted for one-third of all Emmy nominations. These services didn't exist a mere decade ago.

At YouTube, viewership has rocketed past 1 billion hours a month - nearly the same as traditional TV. Popular videos, which have come a long way from the days of cute cats and misbehaving children, can log billions of views, while the most popular independent YouTube channels have tens of millions of subscribers. Today, the Alphabet subsidiary hosts thousands of amateur and professional channels (increasingly a distinction without meaning), sharing ad revenue with its users.

Stars like Rea are emerging as the new media elite. According to a recent Forbes survey, a handful of YouTube personalities are earning over $5 million a year, though more of that comes from book deals, program sponsors and outside promotions than from ads.

The "Binging with Babish" host isn't in that league yet, but then, Rea started posting videos only a year ago. The former graphic designer and self-taught cook told me in a recent interview that he hadn't initially planned anything beyond sharing his love of food and pop culture with like-minded fans. (The show's title refers to a minor character from "The West Wing," a tribute to Rea's media obsession.)

Then an early installment featuring the "Friends" character Ross's gravy-soaked Thanksgiving sandwich went viral, racking up over 2 million views. "The 'Moistmaker' was the first show to be widely circulated," Rea said. "That's when it occurred to me that what I was doing wasn't just for a niche audience, but something that could potentially reach a lot of people." Rea committed to a new episode every week, usually in response to a challenge from his growing base of subscribers.

Rea's viewers do more than just brainstorm for the show. They also bring in advertising - after six months, "Binging with Babish" grew to 350,000 subscribers and now has 1.2 million and is expanding fast. The growth is fueled by fanatic followers who promote Rea's work for him on Reddit and other social networking sites, Rea said.

That leaves Rea free to focus on his expanding business. Like other new-media entrepreneurs, Rea relies on a variety of income streams, including donors who support the show via Patreon, a Kickstarter-like funding platform that connects artists with digital-age benefactors who get early access, bonus content and other premiums. Rea recently reached $10,000 in monthly Patreon commitments, enough for him to quit his day job. The average sponsor gives $5 a month, but one very devoted fan pledged $500, in exchange for which Rea has agreed to fly to California to give a private cooking lesson.

Patreon is now Rea's principal source of revenue, bringing in significantly more than he gets from YouTube itself. He's toyed with having corporate sponsors for specific episodes, and he already has an agent and a book deal. (His first collection of 40 recipes, "Eat What You Watch," is being published in October.) "But for now," he said, "I'm just paying the rent."

Given rent prices in Manhattan, that's still pretty impressive - especially when you take into account Rea's other costs, which, after an initial $6,000 outlay for the camera, lights and editing software, are next to nothing. The YouTube host does all his own production, editing and voice narration.

The only real expense for each new episode is the food, which, he said, "varies widely." A recent "Game of Thrones"-themed program during which Rea made a multilayered "purple pigeon wedding pie" required $500 in ingredients.

Rea's production costs wouldn't even count as a rounding error for a typical TV episode. And, ultimately, it's the radical economics of "Binging with Babish" that pose the real threat to traditional media. Today's video innovators have engineered a new recipe for success: Create content you genuinely care about, sprinkle in a generous helping of low-cost disruptive technologies, and put it on the Internet. Meanwhile, a robust ecosystem of virtual financiers, collaborators, software and other Internet-based services are emerging to support the revolutionaries, all at dramatically lower costs than at the networks they're poised to replace.

That's especially true among millennials, some of whom have never had a pay-TV cord to cut.

Still, it will take more than a few thousand video insurgents to pose a serious risk for traditional content producers and cable and satellite-TV companies. There's time yet for the industry to adapt.

Doing so, however, will require profound change across the supply chain. That includes regulators - in particular the slow-moving FCC. For now, pay-TV providers are hamstrung by decades of outmoded laws that limit how, when and from whom they can buy programming. Mega-producers - such as Disney, Fox and CBS - use that leverage to bundle unrelated channels together, bloating pay-TV offerings.

Since 2014, the Federal Communications Commission has considered applying the same rules to streaming video services. But the far better solution would be to release the incumbents, letting everyone compete and innovate without restraint. That may be the only way to satisfy the infinitely diverse consumer demand.

The good news is that, thanks to the oddly compelling Andrew Rea, at least we'll have the perfect snack foods to nosh on while we binge-watch the revolution - which will be televised, after all.