In a previous article we explored how MCNs are shaking up the media and entertainment space, as the rapid evolutions change the way users find, consume, and engage with content. With such a crowded market (see image above), a lot of our clients are asking us, which are the three top MCNs to watch?
We think Maker Studios, Machinima, and Endemol beyond are arguably the three hottest MCNs in the market right now. You’re probably wondering firstly why, but also how they grew to this point - what kind of content do they offer, what strategies are differentiating them from the competition, and where they will end up in the future?
Let’s pull them apart and get to know them inside out.
Maker Studios Inc. is a US-based global MCN founded in 2009. After signing in-demand YouTube talents and achieving high popularity among viewers, Disney acquired the company in March 2014 for $500 Million (if financial milestones are met, this number could almost double to $950 Million).
Maker currently partners with 55,000 independent content creators from 100 countries, and boasts the most subscribed channel on YouTube: PewdiePie. For those who are still not familiar with this Swedish YouTube megastar, he is (mainly) a video game commentator who plays through games, commentating on them as he goes. Most recently he has expanded his repertoire to also include Q&As, comedy and joint videos with other YouTubers (including his girlfriend, fellow YouTuber CutiePieMarzia). His channel of short-form content is one of the fastest growing YouTube channels, and as of July 2015 has over 38.5 million subscribers making it the most subscribed to channel on YouTube since August 2013, with his subscriber numbers increasing by about a million users a month. According to Swedish newspaper Expressen, PewDiePie’s earnings for 2014 amounted to $7 million.
Similarly to other MCN’s, Maker offers its talent partners the full spectrum of development, production, promotion, distribution, sales, marketing, access to royalty free music for content creation, and custom merchandise solutions. But due to the increasing competition and the need to evolve in a dynamic market, Maker has started to develop technology to provide its talent partners with analytics, royalty reporting, tax payments systems, referrals programs, and a video management system.
Maker.tv, launched in May 2014 and pushed the existing barriers of MCN models as it combines free YouTube content with more traditional, broadcast-quality content, such as Morgan Spurlock’s documentaries. As part of the Disney acquisition, Maker Studios is also working with all of Disney’s brands, including Lucasfilm, Pixar, Marvel, ESPN, ABC, and Disney itself.
The combined massive audience of Disney and Maker Studios puts their online reach just barely behind that of Google and Facebook, a presence that cannot be ignored by purely traditional media and entertainment providers.
Machinima, Inc., was founded in the year 2000 in California. Originally, Machinima.com was a hub for content using the “machinima” technique, a term coined from combining the words “machine” and “cinema” and it relates to the use of video-game technology to create video-animations and even movies. Using animation from a well-known videogame, such as Halo and making a scripted short out of it – Rooster Teeth’s “Red vs. Blue” was an early fan favorite. Machinima.com featured articles and content about film and technology and initially machinima videos were released in a “demo” file format, so viewers needed to have the actual game to view them. Now machinima videos are released on conventional video file formats, which opened the scope for the machinima genre movies considerably.
Originally Machinima Inc. was heavily focused on scripted, topical, and gaming programing. Some of Machinima’s top original programing includes Mortal Kombat: Legacy (WB Interactive), Bite Me (Microsoft/Capcom), Street Fighter: Assassin’s Fist (Capcom). Eventually the company realized that their audience was broader than the gamers that helped them grow, and Q4-2014 unveiled their MCN rebrand using the tagline “heroes rise”, which according to their CEO encapsulates Machinima’s focus not only on gaming but also fandom, action, adventure, and sci-fi content.
Since then they have been focused on reorganizing the company with help from an $18 million investment led by Warner Bros, that brought the company's total funding to more than $67 million since 2008. Currently Machinima Inc. has a talent network of 30,000+ programmers, reaching over 151M viewers per month, and in addition to gaming content features scripted series, original content, weekly and daily shows, pop culture content and gameplay videos.
In order to revamp their talent management program Machinima created a three-tiered system where talents can, similarly to a video game, upgrade their status from entry-level to top tier level. The entry level, called M-White tier, is available to anyone, offering basic support, analytics, and access to additional tools. The mid tier, M-Red, can only be joined by invitation and is focused on talent on the rise to, providing them with premium support, advanced analytics, programming training and brand activation opportunities. The top level is called M-Black, which is focused on top talent for whom Machinima provides one-on-one support, access to their content development and production team, as well as brand activation opportunities, special events, and other services. Only top talent, such as YouTube’s second most subscribed channel, the Chilean comedian HolaSoyGerman (23.5 million subscribers), and gamer SkyDoesMinecraft (11.2 million subscribers) have been invited to this tier.
In addition to the services provided in every tier, Machinima members have access to Machinima’s “Dubbed Console”, a tech platform that provides earnings reports, social tools, analytics and support. Machinima is also launching a research panel for advertisers that tracks the preferences and profiles of Machinima viewers, which will be used to improve programming and to better understand the impact of ad campaigns.
Currently Machinima reaches more than 150 million unique monthly viewers, and has recently launched the three-part series, Justice League: Gods and Monsters Chronicles, with Warner Bros. and DC Entertainment. They are a force to be reckoned with.
Endemol beyond is an MCN from a more traditional background. Its parent company, Endemol Shine, produces and distributes multiplatform entertainment content globally, comprising a global network across more than 30 countries and working with over 300 broadcasters, digital platforms, and licensees worldwide. Endemol are the creators of popular reality, talent and game shows such us Big Brother, Deal or no Deal, Wipeout, The Money Drop and Your Face Sounds Familiar. They also have a portfolio of other genres including drama and comedy.
In 2015 Endemol launched a premium content network called Endemol beyond, which has become the online video hub for all of their US based content, into which they invested $50 million to sign online talent to expand their network (which currently has more than half a billion monthly views).
Endemol beyond is a clear example of how a successful player from a traditional broadcast environment has found a way to capitalize on the current video ecosystem by increasing its scope and reaching new captive audiences. Some of the hottest talents included in the Endemol beyond portfolio include world famous pop and rock musicians such as Pitbull (more than 6.9 million subscribers on his channels), movie stars such as Mr. Bean (1.7 Million subscribers and 1.35 Billion views), and popular online influencers like Michelle Phan (over 7.7 Million Subscribers and 1.1 billion views) and Toby Turner (more than 2M subscribers and 351M views).
Endemol beyond has recently announced that they have begun the production of a U.S. version of its popular U.K. series “Legends of Gaming”. This will be the flagship series of Smasher, a new YouTube network that Endemol beyond USA is launching later this year and will be hosted by Toby Turner. The show will feature gaming coaches and gamer contestants from among the show’s 43 million subscribers across YouTube, Twitch and Twitter (over 7.5 billion lifetime views across Twitter and Twitch).
With their broadcast roots and their front foot in digital, Endemol beyond are one to watch.
What to make of the MCN space?
It’s clear, looking at these examples, that MCN’s are no flash in the pan – there is not only serious viewer numbers fuelling these networks, but serious money as well, with reach and potential revenue dwarfing any previously existing distribution model. What’s also unique and important about the MCN model is that it gives the content creator and their audience a much more direct line of feedback and communication, something that is proving increasingly popular with Millennials and Gen Z. “YouTube videos” are not just kids in their bedroom talking into grainy webcams anymore. They’ve become an ultra-competitive, high reward industry that has as much chance at turning traditional distribution and monetisation models on their head as anything in the OTT space.
Miles Weaver is Piksel’s Innovation Lead, overseeing the strategy, development and management of concepts stemming from Piksel’s Innovation Programme. Miles is an avid commentator on the digital TV revolution speaking regularly at industry events and being published in The Guardian and Read/Write. Connect with him at @MrMilesWeaver