Posted on February 17, 2017
Okay…so I’ve been wanting to make this article for quite some time since most YouTube MCNs (Multi-Channel Networks) are choosing to remain silent, and since I want to elaborate on what’s going on (at least to my knowledge) from what I’ve experienced within the industry, as I feel content creators have a right to at least some insight to know what’s going on.
As you may or may not be aware, YouTube has been clamping down on large MCNs for quite some time. This is because there is a large variety of digital media companies on the YouTube platform that have aggregated literally tens (sometimes hundreds) of thousands of YouTube channels. Obviously, having tens of thousands of channels rolled up in a Content Management System (or CMS – the system used by YouTube to manage these channels) is obviously problematic. After all, how can many MCNs with only 60-90 employees possibly keep track of over 50,000+ people (and let’s assume that each channel has an average of at least 15 videos – with some channels having over a thousand)? It does not seem sustainable, and in such a scenario, creators will not be adequately looked after and the quality of support and attention given to individual (and primarily small) channels will decrease drastically.
In addition, networks with large volumes of small channels weren’t seen as very resourceful for many larger channels, and it often repelled them away. As it’s clear networks would need to allocate some of their financial and human resources away from managing big channels to be able to support the smaller ones.
This is, what I feel YouTube’s primary concern is and it is probable (in my opinion) that they influenced MCNs such as Maker Studios, and other MCNs (of which I will keep anonymous), to cut back and dump channels for this reason.
HOWEVER! There was a way around this for quite some time, which was through sub-networks. Sub-Networks offered the means for MCNs to sub-contract their technology and access to their CMS (whether directly or indirectly through a dashboard) to third-parties. People would have access to these services and would refer channels to the MCN in return for a commission of the earnings.
This allowed for people to start their own small networks under their parent network (hence the name sub-network). The problem, however, was that sub-networks were also getting out of control. Many MCNs began launching expansive sub-network programs, sometimes with upwards of 50 to 100 sub-networks. In some cases, the parent network would even go to YouTube and attempt to get one of their sub-networks a dedicated CMS under theirs. Then, these sub-CMS or commonly known as sub-Content Owner accounts (which are were one of YouTube’s first bans – seeing as irresponsible people were getting access to some of these) would recruit sub-networks under them. Sometimes these sub-networks were even able to get sponsored networks under them. THEN, a channel in the sponsored network could recruit some more channels to the network ON TOP OF THAT. Everyone makes a bit of money in the process and it’s an affiliate marketing mess, and gives the creator virtually no line of communication with the parent CMS.
Confused? Don’t worry, I’ve been in the YouTube Network Industry for over 4 years and have done everything from recruiting to managing multiple large CMS accounts…and it still boggles my mind every once in a while. Here’s a diagram of one of the worst case scenarios of what I call “network pyramiding” to give a better representation:
TL;DR: Networks would hire networks that hire EVEN MORE networks to recruit channels, causing creators to be extremely confused as to who they are partnering with and everyone in-between receives money after some EXTREMELY complicated accounting.
Obviously, this confused creators, as they were not entirely sure, for the most part, who to go to for support. This created a VERY worrying problem for YouTube, leading to a massive crackdown of ALL sub-networks in 2016, with YouTube outright banning them.
However, with YouTube banning sub-networks, this means that we now have an issue of MCNs not being able to out source their support to third-parties…This means that they can not support their 50,000+ channels they have rolled up (most of which are likely through their sub-Network Program). With such a large volume of channels, how can an MCN properly ensure that each of their clients are abiding by YouTube’s Community Guidelines, Terms of Service, and more specifically, copyright policies? They can not. Or at least, not in a sustainable way. However, they are responsible to do so.
So, what’s the solution? It’s to scale back. Very soon, you will see a LOT of MCNs dropping channels according to my predictions, and a LOT of MCNs having their channels audited by YouTube. I may be wrong, but the situation I’ve seen occur lately certainly makes it a likely possibility.
Many MCNs are already performing risk evaluations on their channels, with many MCNs dropping smaller channels that offer little incentive to them, or channels that may have an above-normal amount of risk with regards to copyright and community guidelines.
It is probable that MCNs will be moving towards a more targeted and exclusive approach to their partners. Working more on exclusive deals in targeted marketing and advertising campaign partnerships as opposed to the bulk monetization and aggregation of channels. We could even see a future cap on the total amount of channels allowed to be in an MCN.