What is a YouTube Multi-Channel Network – MCN 101

YouTube Channel Networks

This article was originally written for Canada Media Fund’s blog. It can be found here

HOW DO MCNS WORK?

On YouTube, multi-channel networks (or MCNs) are organizations set up to manage multiple video content creators, primarily YouTubers and YouTube channels.

There’s a certain similarity to digital advertising display networks that represent websites and sell banner advertising. The difference resides in the fact that MCNs often participate and work with channels to help create and improve their content; they are also actively involved in the development of channels within their network.

MCNs work directly with YouTube and are given access to a content management system (CMS)—a system that enables a MCN to manage multiple partner channels and, in a case by case basis, they are given tools to implement Content ID. Content ID is a tool that allows copyright owners to identify and manage their content on YouTube. Every video that is uploaded is scanned against reference files that content owners have uploaded into the CMS. If a match is found, YouTube takes action in accordance with the rules or instructions that the content owner programmed in Content ID.

When a channel joins a MCN, some additional tools within the channel dashboard are unlocked to optimize and claim content. Networks offer various types of support such as production and editing tools, funding, monetization assistance, cross-promotion with other channels as well as digital rights management.

In addition to the abovementioned services, MCNs can provide other advantages like production support and training as well as studio spaces complete with cameras, sets, wardrobes and green screens. They can provide creators with channel growth strategies, website support and the opportunity to collaborate with other YouTubers within the network.

WHAT ARE THE BIGGEST MCNS?

MCN rankings can differ depending on the metric used: number of channel partners, number of monthly views or revenues. The largest MCN in terms of views is Maker Studios, with over 4,5 billion monthly views across thousands of channels. AwesomenessTV has the largest number of channels, i.e., more than 86,000. (Source: Multi-Channel Networks, a white paper by Vast Media for MIPTV)

mcn-rankings

 

 

Some of the older and most well-known MCNs are Machinima and Revision3. More recently, we’ve been increasingly hearing about Maker Studios and AwesomenessTV, which were both acquired by major Hollywood studios (Disney and DreamWorks Animation respectively).

Strictly speaking, there is nothing new about studios buying MCNs (in 2012, Discovery Channel bought Revision3). However, with DreamWorks’ and Disney’s recent acquisitions, it has become clear that Hollywood has taken notice of YouTube’s talent and sizeable audience.

Canada is also in the MCN game with Vancouver-based BroadbandTV, WatchMoJoBlue Ant Media and Boat Rocker Studios with over 1,2 billion views monthly and representing over 12,000 channels. Although MCNs are fewer in number in Canada, they operate in much the same way as their American counterparts.

HOW DO MCNS RECRUIT TALENT?

MCNs recruit creators and channels through various ways. It can be just as simple as making a “cold call”, i.e., networks employ dozens of full time recruiters whose sole job is to comb through thousands of channels and send direct generic messages. Other recruitment tactics include targeted marketing campaigns as well as incentives with existing partners that take the form of commissions paid on every channel they help bring in via links hosted on their own channels.

Most of the major YouTube channels are part of MCNs, with a few exceptions that tend to hire agents to help them grow their brand.

HOW DO MCNS GENERATE REVENUE?

Content monetization on YouTube can be very confusing for creators since the CPM fluctuates constantly with demand and seasonality. CPM stands for Cost Per Mille (also referred to as cost per thousand), which is the amount of money generated per 1,000 impressions (ad views). For example, if your channel gets an average CPM of $5 and you generate 1,000,000 ad views, you will earn $5,000.

To help with this, networks offer creators deals by which they guarantee them a flat CPM rate based on video and banner ads that appear with the content. Some networks offer slightly higher fixed CPMs to channel partners; that can be a good or a bad thing, depending on the channel and contract term.

When a channel is part of a MCN, it relinquishes part of its revenue to the network. Payout is often as simple as the network taking a percentage from the channel’s revenue—anywhere between 1% and 50% depending on agreements and the MCN’s involvement.

Another example of a revenue stream is the facilitation of content integration the network; the latter works directly with brands and marketing agencies. For example, ASAPScience created videos for the CBC during the 2014 Olympic Games.

MCNs also partner with smaller video platforms or websites and enter into licensing agreements with them to redistribute their content.

Content ID can also provide significant revenue for content owners with large libraries. A MCN has the ability to use YouTube’s Content ID system to generate revenue from videos it owns but that are uploaded by other YouTube users. For example, Just for Laughs Gags has just over 3,000 prank clips on its YouTube channel but claims and monetizes over 100,000 videos uploaded by users.

WHAT DOES THE FUTURE HOLD FOR MCNS?

Until last year, the largest MCNs were basically considered as tech start-ups. This perception changed after the abovementioned major acquisitions, changing the way the screen-based industry sees MCNs, i.e., as media companies with high growth potential.

The number of MCNs will likely increase and MCNs will specialize vertically—such as fashion (StyleHaul), music (Vevo) and food (MiTú). It wouldn’t be surprising to see TV, film, music or print media majors join the MCN bandwagon.

The Mickey Mouse Club era seems to be over. Kids are now spending more and more time on YouTube, and they idolize YouTubers. Hollywood (and “traditional” entertainment in general) is now turning to online video in search of new ways to engage with younger audiences.

 

The Digital Media Addict’s Readling List – April 5th, 2014

Multi Screen At Home

Online Content and Video:

Girl Talk & Freeway  “Tolerated” Music Video by Maker Studios is Girl Talk‘s first ever video which is significant  itself but what caught my eye was that it’s produced by recently Disney acquired Maker Studios. Might not be the first but its the first that’s come to my attention. YouTube has become the go to place for music so it only make sence that artists us YouTube studios and talent to produce artists videos. Watch out Vevo!

With Disney Buying Maker do all Big Media Companites Need to up their YouTube Game?  by Dorothy Pomerantz on Forbes.com

Yep… sort of like Temple Street building Boat Rocker (shameless plug!)

MTV Chief Builds Video Network for the SnapChat Generation by Tim Peterson on AdAge.com 

Astronauts Wanted’s mission to tell stories via multiple touch points using the connected teen’s digital behaviour as different touch points for an overarching storyline. Now that’s digital storytelling!

The Web and Online Marketing: 

The Future of Advertising: Here’s what to expect by  on CNBC

Mobile and location are “the shit” in digital marketing. We’ve only been told that “The Year of Mobile” is here for last 10 years now. Also predicting consumer behaviour is borderline creepy.

How Canadians are Using the Internet Differently. by Susan Krashinsky on The Globe and Mail  

Following the same theme, mobile is taking over. Canada has a higher percentage of smart phone penetration yet investments in marketing on mobile platforms lags continuing the trend of Canadian marketers and brands playing it safe.

How Nielsen’s OCR Will Impact Digital Video Advertising by Chris Smith on MediaPost

Ever since I’ve been in digital media I’ve been annoyed by antiquated media measurement metrics forced into digital and not vice versa. Funny how nobody imposes digital metrics on TV, Out of Home and Radio.

Calm Down, Facebook is Not Screwing You by Michael Lazerow on Re/code 

The bashing of Facebook got old quick and I’ll fully admit to getting on that bandwagon. In hindsight the failure is on us as marketers and brands for taking the easy route by choosing to build castles on someone else’s sandbox and losing focus on the end goal.

Research:

TV Content Drives Multiplatform Viewing – Vubiquity Research Report

TV still the number one source for video watching but other platforms are gaining ground, especially with the under 35 crowd. The audience wants to consume content via multiple platforms and is willing to pay for it.

Older Adults and Technology UsePew Research Center 

Long report that basically says that the older population is adopting broadband, the web and technology into their lives with the more educated, affluent taking the lead. I’m already seeing older vloggers appearing on the scene!

What I’m Reading and Watching Today – April 4, 2014

Here’s a list of articles I’ve read and a few web videos I think you should check out – April 4, 2014

Europe in 8 Bits – Documentary Trailer from Javier Polo

EUROPE IN 8 BITS is a 2013 documentary exploring the world of chip music, a new musical trend that is growing exponentially throughout Europe. Available on Vimeo on Demand.

More than 70 Million People Watch eSports Worldwide by Rod ‘Slasher’ Breslau on ongamer.com

Tales from Millennials’ Sexual Revolution by Alex Morris on RollingStone

Millennials spend 48% More Time Watching Online Video than the Average Internet User by Amh Gensenhues on Marketing Land.

What I’m Reading Today – April 2nd, 2014

Here’s a list of worthwhile articles I’ve read today as well as one great video – April 2nd, 2014

How Is Technology Changing TV Narrative? Idea Channel PBS Digital Studios

The Dollar and Cents Case Against Hollywoods Exlusion of Women by Walt Hickey on FiveThirtyEight.com

How The Most Expensive Game Jam In History Crashed and Burned in a Single Day by Jared Rosen on IndieTalk

The Fatal Mistake Content Marketers are Making with NoFollow by Danielle Wiley on MarketingLand