We’re a media and technology company. If you look at the business, there are three key components.
One is the multichannel network. We work with more than 22,000 content creators – we acquire rights to their assets and we distribute their content online, mainly on YouTube.
The second component of the business is technology. We’ve created two platforms. One is a matchmaking tool that allows brands and content creators to connect with an audience. The other helps media companies detect fan-uploaded content and better engage with audiences.
And then the third component of the business is professional services. On the services side we provide different solutions for content creators, from production to monetization to channel management.
Of those three arms, where are you spending the most of your attention and making the most money?
Advertising forms the basis of our revenue generation. The three components of the business all serve each other. Without the tech component, the networks wouldn’t operate as well because they wouldn’t be as scalable.
So why should we be thinking of multichannel networks (MCNs) as the Comcasts and Viacoms of the YouTube age? Who are your biggest competitors?
If you look at the MCN evolution, you had MCN 1.0, which was all about rights aggregation. With 2.0, you had MCNs with technology in their DNA, which is very similar to BroadbandTV and Fullscreen, and you also had MCNs like Maker, which focus on production.
With MCN 3.0, all of us are trying to make sure that we have solutions that aren’t just focused on tech and production, but which are also focused on helping content creators become more successful and then on the brand side connecting the brands to millenials, which isn’t something brands can do as easily with traditional media.
This year a slew of traditional media companies, from Disney to AT&T, have either bought or invested in MCNS. In 2013 European media conglomerate RTL took a 51 percent stake in BroadbandTV. Why are media companies so interested in these networks?
Traditional media companies are trying to reach millennials. A lot of those 18-34 year olds are consuming content on YouTube.
It’s very hard to reach and engage them, and these companies know that millenials are a massive target audience for a lot of brands and advertisers. That’s the key reason.
It’s also very strategic. It’s about creating an ecosystem – exposing talent across traditional media to new media and vice versa and making sure the talent across traditional media stays relevant, especially by helping them engage with young people.
When it comes to brand marketing on YouTube, three main strategies seem to dominate: uploading owned content, old-fashioned pre-roll and YouTube celebrity endorsements. Based on your experience, where do you think brands should be spending their time and money?
To be able to execute a good strategy online, you need to do all three. They all need to be linked.
In terms of the overall strategy, influencers and brands are very close. You work with an influencer to support your products or you work with them to create branded content. Sometimes you create your own branded content without the influencers.
The bottom line is that there needs to be one cohesive strategy behind all of it for brands to be able to stay relevant and reach the right audience at scale.
As more MCNs emerge, several have faced criticism for unfair contracts and for partnering with thousands of channels, some of which have so few videos and subscribers that they won’t benefit from the partnership. Why is the MCN space facing these problems?
It’s very tough to answer this question. You hear certain stories and you just don’t know what part is true.
It’s a new industry. You have your independent content creators, you have younger creators that may not be savvy in terms of understanding the types of contracts that they sign. Sometimes no one is actually telling them what they’re signing.
I think this is something that happens in any new industry. You have to get all the players to a place where they have a full understanding, for example, of rights and windows and how things work.
We’re getting there. If you compare the average creator today to the knowledge base three years ago, there’s a significant improvement.