A multi-channel network is an organization that works with video platforms such as YouTube, to offer assistance in areas such as "product, programming, funding, cross-promotion, partner management, digital rights management, monetization/sales, and/or audience development" in exchange for a percentage of the ad revenue from the channel.
The name Multi-channel Network has only recently begun to be standard, coined by former YouTube employee Jed Simmons (reportedly because of YouTube's distaste for the notion of "networks.") Prior to 2014 many names were used by the different companies, including Online Video Studio, Internet Television Company, ITC, MCN, OVS, YouTube Network or simply Network.
Sub-networks of MCNs are known as SubMCNs, Virtual Networks, Proprietary Networks, Content Distribution Networks, SMCNs, VNs, PNs, or CDNs.
They work by a company setting up an account with YouTube CMS (the system used for ContentID), the company adds anyone who signs a contract with them to their CMS, allowing users (and the CMS account owner) to use monetization, block and track policies. Monetization allows for videos to generate revenue, Block prevents access to videos and Track allows content owners to see the analytics of 'reuploads' and copyright infringing content. Some MCN partners can block videos by country (e.g., if a video is uploaded with a banned or unlicensed logo).
MCNs have been described as a means to "negate the hassle involved when seeking out your own advertising opportunities on the site." Advertisers who work with MCNs can pay for services including overlay adverts, product placement and in show sponsorships, aiming to gain repeated exposure, endorsement by YouTube personalities, and increased audience engagement, especially compared with television advertisements which are often ignored or skipped.
Benefits and drawbacks
The benefits and drawbacks of partnering with a multi-channel network have been discussed by several high profile YouTube creators, including Hank Green, Freddie Wong as well as YouTube itself. The possible benefits can include access to production and editing facilities, higher CPM, access to traditional media projects and celebrities and the option to make money from cover songs of copyrighted music. However, there have been several controversies involving YouTube Networks.
Maker Studios was criticised by Ray William Johnson for the pressure the company put on him into signing a contract which gives Maker a 40% share of his channel's AdSense revenue and 50% of his show's intellectual property rights. Johnson stated that they were using "thuggish tactics" to pressure him into signing the contract, one of which was allegedly leveraging his AdSense account for the intellectual property rights to YourFavoriteMartian. He also claimed that Maker Studios CEO, Danny Zappin, is a convicted felon, a charge which Zappin later publicly admitted to, having a felony drug conviction about 12 years prior.
Machinima has been criticised for the use of perpetual contracts. Ben Vacas, known to the YouTube community as 'Braindeadly', attracted media attention in January 2013 over contractual issues with Machinima. Under the terms of his contract, Machinima were permitted to place advertisements on Vacas's videos and in return he would receive a percentage of the profits generated. However, the contract also disclosed that it existed "in perpetuity"; meaning Machinima would hold the rights to any content created by Vacas published on his partnered YouTube channel in his lifetime, a detail Vacas failed to read.
Networks like Fullscreen have been criticised for partnering thousands of channels, some of which have so few videos and subscribers that they will not benefit from the partnership for more than a year. The concern is that individual channels will find it hard to get meaningful support from such a network as they have too many people to cope with. Fullscreen claims this is due to YouTube streamlining the process so that more people can be partnered.
Machinima was criticised in early 2013 by high profile YouTuber Athene for "intimidating... multiple partners" to sign a contract that would significantly lower their CPM. Athene called it "one of the worst deals on the internet" and advised his subscribers not to "sign with Machinima" stating that they could get a better arrangement with other networks.
Several MCNs have been purchased by larger organizations. In early 2014 Maker Studios sold to Disney for $500 million, and Big Frame was sold to DreamWorks Animation through AwesomenessTV for $15 million.
- YouTube. "Multi Channel Networks 101". Retrieved 2013-05-18.
- Davidson, Neil. "Can a Multi-Channel Network Boost Your YouTube Marketing Success?". Site Pro News. Retrieved 19 May 2013.
- "Top Networks by Social Blade YouTube Stats". Socialblade.com. Retrieved 2013-08-19.
- "How to Start a YouTube Network. | YouTube Forum | The #1 YouTube Community | Video Editing, Branding & YouTube Help". Yttalk.com. 2013-05-09. Retrieved 2013-08-19.
- Millar, Michael (2013-04-08). "Digital product placement creates adverts out of thin air". BBC. Retrieved 19 May 2013.
- "Should I Join a YouTube Network?". YouTube. Retrieved 2013-08-19.
- "YouTube Networks: 7 Things You Need to Know « Rocketjump". Rocketjump.com. 2012-09-02. Retrieved 2013-08-19.
- "Big Frame Moves Into Larger Headquarters With Dedicated Production and Sound Studios". Newmediarockstars.com. 2013-04-10. Retrieved 2013-08-19.
- "Turnstyle: Covering Pop Hits On YouTube Is Starting To Pay". Huffingtonpost.com. 2013-05-15. Retrieved 2013-08-19.
- Kanter, Jake (2013-05-16). "ChannelFlip: TV red tape is driving talent online | News | Broadcast". Broadcastnow.co.uk. Retrieved 2013-08-19.
- "Fullscreen Opens Universal Music Library To Its Artists". Newmediarockstars.com. 2013-04-04. Retrieved 2013-08-19.
- "Universal Music Publishing Group Announces Partnership With Fullscreen and Maker Studios". Newmediarockstars.com. 2013-02-14. Retrieved 2013-08-19.
- Baumann, Drew (2013-04-04). "Introducing the new FAM experience // Fullscreen". Blog.fullscreen.net. Retrieved 2013-08-19.
- Sam Gutelle (December 11, 2012). "Maker and Ray William Johnson Still Feuding As Backstory Is Revealed". Tubefilter. Retrieved January 14, 2013.
- Sam Gutelle (November 27, 2012). "RayWilliamJohnson Starting His Own Studio With Help From Julian Smith". Tubefilter. Retrieved January 21, 2013.
- Ray William Johnson (December 11, 2012). "RAY WILLIAM JOHNSON: Why I Left Maker Studios [EXCLUSIVE]". New Media Rockstars. Retrieved December 16, 2012.
- Editorial Staff (December 11, 2012). "BREAKING: Maker Studios CEO Sends Company-Wide Letter Addressing Ray William Johnson Allegations". New Media Rockstars. Retrieved December 24, 2012.
- Joshua Cohen (December 12, 2012). "Maker Studios CEO Sends Letter to Employees, Addresses Past and Ray William Johnson". TubeFilter. Retrieved January 14, 2013.
- Tessa Stuart (January 10, 2013). "YouTube Stars Fight Back". LA Weekly. Retrieved January 14, 2013.
- Marsden, Rhodri (2013-01-23). "Channels spawned by YouTube are making a fortune but are the people making the videos missing out?". London: The Independent. Retrieved 15 February 2013.
- Stuart, Tessa. "Rage Against Machinima". Houston Press. Retrieved 15 February 2013.
- Manarino, Matthew. "YouTube Network Fullscreen to Launch Partner Only Forums". New Media Rockstars. Retrieved 18 May 2013.
- Van, Alan. "Corridor digital - Filmmakers, VFX Wizards". New Media Rockstars. Retrieved 14 June 2013.
- Boumaaza, Bachir. "YT Partners Warning". AtheneWins. Retrieved 18 May 2013.
- Pomerantz, Dorothy. "With Disney Buying Maker, Do All Big Media Companies Need To Up Their YouTube Game?". Forbes. Retrieved 2 April 2014.
- Spangler, Todd. "AwesomenessTV Buys YouTube MCN Big Frame for $15 Million". Variety.