He may be huge on YouTube, but few in Hollywood know who Shane Dawson is. Not yet, anyway.

The 26-year-old is best known to 12 million-plus subscribers across three different YouTube channels, but he’s about to make a name for himself in film and TV, too. Dawson is directing a movie commissioned by Starz for upcoming docuseries “The Chair,” which follows two filmmakers who are given the same script to shoot. And NBC ordered a script for “Losin’ It,” a sitcom based on Dawson’s life working at a Jenny Craig weight-loss center, which he is developing with Sony Pictures Television.

“YouTube opened up a lot of doors,” said Dawson, who is repped by UTA. “It’s the best place to be discovered, because it’s something that you personally have done, rather than (you) reading someone else’s words.”

But Chris Moore, (“American Reunion,” “Project Greenlight 3”) executive producer of “The Chair,” confesses to being nervous about enlisting a YouTuber with zero experience to fashion a feature-length film. “It’s really difficult to make the transition Shane’s trying to make,” Moore said. “Bringing digital talent into this space can be very risky.”

Photo by Chris McPherson for Variety

There is no doubt a new generation of talent who create their own content on YouTube, Vine, Instagram and other platforms are becoming household names among young consumers online. Parents may be oblivious to names like Cameron Dallas or  Jennxpenn because those talents aren’t on Disney Channel or the radio, but they inspire screaming throngs reminiscent of Beatlemania when they make appearances in the flesh.

Yet as the careers of people like Dawson mature, this species of stardom is subject to interpretation. There’s the question of whether this new breed has the staying power to cross over into traditional media, but that may not even be necessary, given the increasingly meaningless distinction between Internet culture and the so-called mainstream.

It wasn’t so long ago that establishing unknown talents required aggressively marketing them in film and TV in hopes of pumping up box office or ratings. But digital platforms have flipped the conventional formula on its head. Online personalities amass an audience first, and make money after. And what’s more, building that audience can be done without Hollywood’s help.

“The viewer is the new studio boss,” said Will Keenan, president of Endemol Beyond USA, the TV production giant’s domestic digital arm. “We can’t force content on people anymore.”

Traditional media companies know this all too well. That’s why there’s been a rash of deals like Disney buying Maker Studios, a large YouTube multichannel network, in a deal worth upwards of $950 million; and DreamWorks Animation snapping up AwesomenessTV last year for up to $117 million. Now Fullscreen, another big MCN, is in talks with AT&T and Chernin Group to sell a controlling stake to the two companies’ Otter Media online-video joint venture.

These acquisitions are being made because young adults watch significantly more online video than do their elders, according to Nielsen. In the first quarter of 2014, consumers aged 18-24 viewed 2 hours and 28 minutes of online vids per week — nearly an hour more than the average for all adults. TV isn’t dying, exactly, but consumption patterns are changing.

SEE ALSO: VIDEO: Shane Dawson Talks About His Next Project

No wonder that for every digital star like Dawson, there are others content to build their careers on the Internet. Many are making comfortable livings — and then some — by serving their fan bases, without trying to make it big elsewhere.

Shane Dawson photographed by Chris McPherson for Variety

The biggest YouTube star is Felix Kjellberg, a 24-year-old Swede known as PewDiePie to his 29 million subscribers, whom he delights with daily videos in which he simply plays videogames while cracking jokes. Kjellberg recently revealed that his channel grossed $4 million in ad revenue in 2013.

“The biggest stars in the space aren’t making the same type of money that traditional celebrities are,” said Brent Weinstein, head of digital media at UTA. “But they’re catching up.”

Moreover, there is a “long tail of digital creators” who make higher incomes than the rank-and-file of traditional actors, Weinstein said. According to YouTube, several thousand channel partners earn six-figure incomes through the vidsite.

WME digital agent Avi Gandhi said he’s seeing an increasing number of online stars making seven figures a year, with some approaching eight. As the ad business — which has had 70 years of buying on TV — starts figuring out that the Internet is a missed opportunity, even more dollars will pour into the ecosystem. “These digital stars, a lot of them, have online audiences bigger than TV shows,” Gandhi noted.

STAYING NATIVE

Jenna Marbles surely figures into this elite group. With 13.5 million subscribers, she is second only to comedy duo Smosh among U.S.-based YouTubers. Born and raised in Rochester, N.Y., Marbles — whose real name is Jenna Mourey — still has no desire to do anything other than regularly post odd, funny and personal episodes on her channel every Wednesday. The 27-year-old mostly produces the entire show alone from her Los Angeles apartment.

SEE ALSO: Survey: YouTube Stars More Popular Than Mainstream Celebs Among U.S. Teens

“Everyone is expecting you to use what you’re currently doing on YouTube to do something else,” she said. “I’m like, what’s wrong with hanging out and getting drunk and making silly videos? It’s not that I don’t have the foresight for a larger project. I’m just not convinced it’s worthwhile.”

Marbles does have one gig that’s not strictly on the Internet: She’s the host of SiriusXM’s “YouTube 15” show, which features the top emerging and breakout songs based on YouTube data of the previous week.

The goals and aspirations of digital talent vary widely, according to Sarah Passe, an exec in CAA’s business development group who focuses on the sector. “If you’re addicted to that social interaction, it’s more fun to post a video than, say, write a script,” she said. “They’re used to having an idea and executing it” — and sometimes it’s challenging to get them interested in opportunities that are farther out.

And just because someone is famous on YouTube doesn’t mean they can succeed in another sphere, even when that is what they want. Look no further than Rebecca Black, the Southern California teen who vaulted to instant fame with her viral YouTube musicvideo “Friday” — much of the traffic driven by people mocking her — then faded back into obscurity.

“Just because you have a huge fanbase as a sports star doesn’t mean you can be a movie star,” said Chad Gutstein, CEO of Machinima, a gamer and fanboy-focused multichannel network whose backers include Google and Warner Bros.

Still, talent crossovers from the Internet into TV and other media are ongoing, and they have been, in dribs and drabs, for some time. Lucas Cruikshank began making “Fred” videos on YouTube, starring as a whiny teen with a high-pitched voice in 2008, when he was 13. Nickelodeon cut a deal with him, ultimately producing three “Fred” movies and the 20-episode “Fred: The Show” series that aired in 2012.

Jenna Marbles photographed by Chris McPherson for Variety

More recently Nick has run shows from AwesomenessTV. The Viacom kids’ cabler also has ordered a 13-episodes series “ReactToThat,” based on the YouTube franchise created by the Fine Bros. showing people from different walks of life responding to viral videos.

Another YouTube property that’s jumped the media divide is Epic Meal Time, currently with 6.4 million subscribers. The Web series’ creator, 29-year-old Canadian Harley Morenstein, prepares outlandish dishes (e.g., burger-stuffed lasagna, an 84-egg sandwich, a donut casserole) each week with his brother Darren and assorted buddies.

It’s now a show on A+E Networks’ FYI network: “Epic Meal Empire,” a 16-episode half-hour series that premiered July 26, in which the crew invents crazy food concoctions, based on requests.

SEE ALSO: Digital Stars: Inside the 24-Hour Job on the Internet Stage

Morenstein said the longer TV format helps bring out the nuances of the show’s personalities. And the bigger budget has meant the Epic Mealers can super-size their thinking. In the YouTube series, EMT created a foot-long car made entirely of meat. On the TV show, the freaky foodies made an edible Corvette the size of a golf cart, with a pizza steering wheel, rear tires made of Rice Krispies and an actual grill in the back.

The most amazing part? “Not having to clean up at the end of the show,” Morenstein said. “We had people for that!”

THE PLATFORMS

YouTube isn’t the only place where digital stars are finding footholds in mainstream entertainment.

Logan Paul, 19, is a fast-rising digital star who is as close to an overnight Internet success as it gets. Last July, he began posting funny six-second skits on Twitter’s Vine, and now has 4.8 million followers.

“It’s gotten to the point where it has totally consumed my life,” said Paul, who grew up in the suburbs of Cleveland. In June, after finishing his freshman year at Ohio U., he drove cross-country — with his parrot, Maverick, who has his own Twitter account — to West Hollywood to pursue ambitions of growing his digital brand and potentially breaking into TV and movies.

He’s already gotten a foot in the door. Next year, Paul has a role in Fox comedy series “Weird Loners.” In the pilot, he appears as “Naked White Guy,” a dude who wakes up in the show’s Queens, N.Y.-set townhouse after a raging party. Executive producer Michael J. Weithorn had seen Paul’s Vines, and called him in for an audition.

SEE ALSO: Why I Watched Nothing But YouTube for a Month

In the meantime, Paul is making real money as a Viner through sponsorship deals with brands including HBO, Pepsi, Ubisoft, Virgin Mobile and Ritz crackers. He’s on a national tour this summer to promote Hanes’ new X-Temp line of shirts and underwear. His Vine bits for the campaign include “World’s Worst Matador” and “Modern Day Shootouts” — designed to show “I can stay cool under pressure,” Paul said. Like other digital stars, he’s learned to be a hybrid of entrepreneur and showman: He recently signed a management deal with L.A.-based the Collective, and is repped by UTA.

How much does Paul make? “More money than I made mowing lawns in high school,” is all he would say. According to social-media ad agency Niche, Vine sponsorship deals average in the mid-thousands per campaign, but can be worth up to $50,000.

And if a video hub consisting of videos that last no more than six seconds like Vine seems an unlikely springboard, consider Snapchat, a messaging service for sending photos that expire in 10 seconds that’s hugely popular among teens, with an estimated 82 million monthly active users, most of whom are between ages 13 and 25, according to research service BI Intelligence.

Last fall, Snapchat introduced a Stories feature, which lets posts stay up for 24 hours before they disappear. In June, content using the feature was getting 1 billion views daily — more than double that of two months earlier.

Logan increasingly distributes videos on Snapchat. He said the 24-hour timeout adds an exclusivity and urgency for fans to check out videos ASAP.

For many digital stars, it’s not about sticking to any one platform. Many of them have presences on multiple platforms, driving fans from one to the other. But it’s YouTube that is easily the biggest platform that’s been fueling the ascent of digital stars. The Google subsidiary has a first-mover advantage, according to Robert Kyncl, YouTube’s global head of content. “If you become the place where (creators) built their audience, there’s a tremendous sense of loyalty by the audience out of habit,” he said.

YouTube has promoted its star creatives in national marketing campaigns on TV and other media, aimed at raising awareness on Madison Avenue that the site has popular content that reaches a wide audience. In April, it kicked off a series of ads featuring fashionistas Michelle Phan and Bethany Mota, and foodie Rosanna Pansino. This summer, it’s highlighting Epic Rap Battles and Vice News.

YouTube execs quietly have reached out to Hollywood producers to potentially play matchmaker with some of the top-tier talent on the video site, and may selectively invest in original programming, according to sources familiar with the strategy. Various strings may be attached to the funding, including exclusive windowing on YouTube or a share of revenue for content distributed off the site. Asked for comment, a rep said, “We are always exploring various content and marketing ideas to support and accelerate our creators.”

The initiative may be partly in response to YouTubers who have grown to fame on the site — and then launched bigger projects off the site. Those include “Camp Takota,” the comedy film starring YouTube personalities Grace Helbig, Hannah Hart and Mamrie Hart that was released this year and is available for purchase through VHX and iTunes.

MAKING MONEY

The money digital stars earn doesn’t come solely from YouTube, which is the only one of the online platforms that pays talent anything. For many, YouTube ad revenue, of which Google gets a cut, is the largest chunk of change. But the biggest Internet icons — whether they’re on YouTube, Twitter, Vine or another social network — have a host of other ways to monetize their large fan followings.

Sponsored content, for starters, is a growing piece of the pie. The Fine Bros., for example, have created videoclips based on the “React” concept to promote Universal Studios’ “A Million Ways to Die in the West,” AMC series “Halt and Catch Fire,” Friskies cat food and etailer Audible.

Target also is dipping into the YouTube well. The retail giant is running an online ad campaign this summer aimed at college-bound kids, with branded videos on Target’s YouTube channel from creators including Todrick Hall, Ann Le and Tiffany Garcia.

YouTube-related data and revenue estimates provided by OpenSlate

Live concerts and events featuring digital celebs also have taken off. DigiTour Media, an L.A. startup that produces concerts and events featuring YouTube and Vine stars, launched its first music tour in 2011. Last year, DigiTour sold 18,000 tickets to its events. This year, it’s already sold 100,000, and expects to top 125,000, with events in 45 markets (including four festivals, in New York, Los Angeles, London and Toronto). In 2015, DigiTour expects attendance to reach 250,000, according to co-founder Meridith Valiando Rojas.

“The touring business is the healthiest part of the music business,” said Valiando Rojas, a former A&R exec with Columbia Records. “We realized that there was an untapped opportunity in the social space.”

In May, DigiTour, which Valiando Rojas said is profitable, received just under $2 million in funding from Ryan Seacrest and Advance Publications, parent company of Conde Nast. Also in the music space, DWA’s AwesomenessTV, together with music-biz impresarios Russell Simmons and Steve Rifkind, cut a deal with Universal Music Group to form Awesomeness Music, a label focused on YouTube talent. Among those signed to the label are Cimorelli, the singing group of six sisters from Sacramento, Calif., that started out doing covers of songs and now has 2.7 million YouTube subscribers.

Books are another source of revenue. Simon & Schuster’s Atria Publishing Group, in partnership with UTA, this spring formed Keywords Press, an imprint that publishes books by Internet celebs. Keywords has announced deals with Dawson and Justine Ezarik (“iJustine” on YouTube).

Then, there’s the opportunity for the digitally famous to sell their own branded merchandise to their legions of followers. Mota, the fashion and beauty vlogger with 7 million subscribers, distributes her own line of clothing through Aeropostale.

Phan, who has a deal with Endemol Beyond USA to develop her primary YouTube channel, a fashion-related MCN and other video properties, sells her own line of makeup in partnership with L’Oreal. Even after YouTube splashed her face on TV and billboards, Phan said she still doesn’t think she’s become mainstream. “The majority of my branding is online, and I am going to choose to stay online unless the right opportunity comes along,” she said.

Other digital-video sites are tapping into YouTube talent, as well. AOL in July launched “Follow Me,” a 10-episode series documenting the lives of digital creators — mostly culled from YouTube. The show, produced by Fullscreen, will feature stars including Brittani Louise Taylor (1.1 million subscribers); and Ricky Dillon and JC Caylen, two popular members of online video group Our 2nd Life (O2L).

WHAT IT TAKES

There are specific qualities that determine who becomes a celebrity online, standing out from the billions of people who also post content.

Sure, being a star in any medium requires having some kind of charisma and the ability to perform. Being attractive and funny helps, too. But the key attributes for online success, according to professional Internet creators and industry execs, boil down to working hard, consistently delivering fresh content, having an authentic voice and connecting with a virtual audience on an ongoing basis.

It’s definitely a full-time job and then some, according to Anthony Padilla, half of the two-man YouTube comedy team Smosh (18.3 million subscribers) with his childhood friend Ian Hecox.

“We’ve had plenty of days where we worked for 18 hours straight,” Padilla said. “We have been doing this stuff for almost nine years. We make sure to take one or two little vacations every year to clear our minds.”

The Smosh guys are affiliated with Defy Media, the digital studio formed last year by the merger of Alloy Digital and Break Media.

There’s also an element of luck and timing in hitting the digital big time, Hecox said. “We got started on YouTube very early, when there wasn’t a lot of content on there,” he noted. “I would say it’s definitely harder to break through today.”

Another big difference between new-style Internet entertainment and old-school TV and movies is that, in many cases, the storytelling itself is all about the creator. It’s a mindset and a thirst for popularity that some might call narcissistic. But as long as audiences feel like they have a personal bond with the talent, that’s fine.

Marbles put it this way: “I have no tangible talent. My talent is (in) being an Internet friend.”

A thick skin is also essential, said Ray William Johnson, who rose to Internet fame with his long-running YouTube series “Equals Three,” a shortform program that riffs on trending topics, which he launched in 2009. This March, he announced he was retiring from the show, and relaunched it with a new host, Robby Motz, a 20-year-old theater student who’d never been on YouTube — until now.

Besides liking Motz and believing in his talent, Johnson felt his new host could withstand the vitriol often leveled at high-profile digital stars. “It’s hard to perform right out of the gate, and have people call you the most horrible things humans can call you,” Johnson said.

CAA clients from the traditional media biz often asked how they can grow their audiences on social networks, Passe said. But that’s not something that can be outsourced or manufactured. “There are no shortcuts,” she said. “The people who are good at it, are very good at it. Ultimately, it’s about them.”

Any way you look at it, Millennials, like their parents and grandparents before them, are eagerly consuming new and different forms of entertainment. Baby Boomers had broadcast television; Gen X had cable TV; and today, there’s digital media. The significant change: Internet content doesn’t have to be distributed by a studio or a network.

But eventually, there will be a blurring of mediums, according to some bizzers — a convergence, in which the distinctions of whether someone is a digital celebrity, a TV personality or movie star are all but erased.

“Focusing on the talent is the big thing,” said Erin McPherson, chief content officer at Maker Studios. With the MCN now part of Disney, she’s scouting for talent that can cross over to opportunities on film and TV — including ABC and ESPN, as well as non-Disney networks — and other digital platforms. The idea is to also work the flow the other way: so, for example, Lucasfilm’s “Star Wars” team can mix it up with digital-native creators who know how to win fans in big numbers.

Arguably, traditional stars like Jimmy Kimmel and Ellen DeGeneres qualify as YouTube stars given the tremendous followings they’ve amassed on the platform, according to Kyncl. “You will see both digital-first and analog-first brand building,” he said. “Ultimately, it all just blends.”

The rise of digital stars — who control their relationship with the audience more closely than any generation of talent that has preceded them — will inevitably change the dynamics of the industry, said Larry Shapiro, senior VP and head of talent at Fullscreen and a former CAA agent. “Hollywood believes in pixie dust. Silicon Valley believes in data,” he said. “Today’s entertainment has to be a combination of both.”

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