Multi-Channel Networks (MCNs) help successful YouTube creators monetize their content and make videos that may have previously been beyond their capabilities. And with YouTube having over 2 billion monthly active users, there are now more opportunities than ever for creators to find success on the platform.
However, if you're considering signing up with an MCN to help build your channel, you must make an informed decision. You have to pay fees to belong to an MCN, and their contracts are legally binding. You can't just change your mind once you sign up for a specified period. While MCNs can offer you many benefits to grow your channel, you also have obligations to them. To some extent, you lose your independence as a YouTube creator.
MCNs for YouTube Creators:
What's a Multi-Channel Network (MCN)?
Multi-channel networks (MCNs) are exclusive to YouTube. You won't find them on Facebook, Instagram, Twitter, or even most other video platforms like TikTok. Former YouTube employee Jed Simmons coined the term "multi-channel network" to describe YouTube channel companies and clarify what a YouTube "Network" was. However, MCNs aren't internal to YouTube. They are independent businesses, generally aiming to profit by assisting YouTubers in making an income.
Perhaps the best way of thinking about MCNs is to compare them to television cable networks that sign up multiple TV channels for their customers to watch. In that case, the TV channels are still independently owned, but the cable networks pay for the rights to broadcast the channels under their overarching brand. Likewise, MCNs act as networks on YouTube, signing up multiple YouTube channels they believe will make worthwhile members of their roster.
Just as many TV networks specialize in a single type of programming, many MCNs focus on YouTube channels in a particular niche. For example, they may only sign-up beauty creators or perhaps gaming channels. This makes it easier for an MCN to build their network focusing on a specific target audience, rather than trying to be a general network trying to cater to the tastes of everybody. It also means that the viewers of one MCN channel are far more likely to take an interest in and begin to watch the videos of other channels of that MCN.
The multi-channel networks typically work with creators in one of two ways:
- The channels become affiliate channels, with the video content remaining the property of the video creator
- The MCN uses the Owned and Operated model and buys out the rights to the content on the channels. The MCN buys exclusive rights to the channel's YouTube content and actively manages the operation of the channel
How Can MCNs Benefit YouTube Creators?
It is relatively easy to see how popular YouTube creators can help MCNs. They pay money to the MCNs and provide quality content for the MCNs to promote. So, what do the MCNs do that benefit the creators in their network?
An MCN can help its creators by providing funding to help them make videos that would otherwise have been unaffordable. For example, the MCNs might pay travel costs or purchase products, or props needed for a video. Some have set up well-outfitted facilities in major cities that their members can use to make and edit their videos.
Because the MCNs have a working relationship with YouTube, they gain access to various tools and analytics not available to independent creators.
MCNs are often large and have signed up leading YouTubers in one or more niches. By signing up to an MCN, you gain better access to other MCN members. Therefore, it may allow you to network and collaborate with high-powered YouTubers you might not otherwise have.
Many of the channels working with an MCN cross-promote each other's videos. This can be particularly beneficial in MCNs focusing on a single niche – their channels' audiences will generally all have similar tastes and often be receptive to viewing the content of the recommended channels. Often, channels can gain significantly increased traffic through this cross-promotion, and every ad watched on their channels results in increased income. Ideally, the additional traffic will generate more revenue than the payments the channel has to make to their MCNs.
Also, MCNs can take charge of some of the administrative work that many content creators dislike immensely, such as chasing up copyright infringement. The creators can place their focus on creating entertaining and informative videos rather than mundane admin activities.
Finally, some MCNs act like managers and can find you opportunities you would not otherwise have, many off YouTube like an acting role or TV appearance.
Disadvantages of Signing up to a Multi-Channel Network for YouTubers
MCNs don't work for nothing. They will keep a portion of your YouTube earnings. You have to judge whether the benefits of joining a particular MCN outweigh its costs.
Many MCNs are extremely large with a sizable client base. Unfortunately, this can make them seem impersonal to all except their most influential clients. As a result, you might find that you receive very little of their time, and you begin to wonder about the worth of their involvement.
Signing up for an MCN will bring obligations. They aren't going to be interested in a channel that isn't making regular, relevant videos that attract views and, in turn, advertising revenue. You will probably find that your contract details the quantity (and quality) of videos you need to upload each month. If you don't meet your content quota and other performance targets, you may be dropped by the MCN before long. MCNs are unlikely to invest in your channel if they don't continue to see a reasonable ROI.
How MCNs Make Money
The primary way that MCNs make money is by taking a percentage of the advertising revenue from their creators' channels. However, they can sometimes make money by placing claims on the earnings from ads on videos that breach their clients' copyrights.
MCNs Keep a Portion of the Ad Revenues on Their Clients' Channels
Advertisers pay YouTube an amount to place ads on the video platform. YouTube ads have an average cost-per-view of $0.010 – $0.030, and the average cost of reaching 100,000 viewers is around $2,000. YouTube has various ad formats, but the most common are skippable video ads that appear before, during, or after a video which a viewer can skip after 5 seconds. Some viewers prefer to avoid seeing ads on YouTube and are willing to pay a monthly subscription to YouTube Premium. YouTube uses some of this subscription money to compensate channel owners (and indirectly MCNs) for lost advertising revenue from YouTube Premium subscribers.
Source: tubularinsights.com
Like most social networks with a formal advertising market, YouTube makes advertisers bid for ad placement, so the price they pay will vary from one day to the next. Bids operate on a CPM basis – Cost per Mille, i.e., cost per 1,000 views.
Auctions occur instantaneously behind the scenes, with advertisers competing for every suitable advertising slot using algorithms rather than physical bidding. Therefore, the potential revenue from each advertising slot may differ depending on the price the winning bidder pays (which will be slightly higher than the bid made by the second-highest bidder). The advertiser with the highest bid for an ad slot pays YouTube at a rate that equates to the winning CPM rate multiplied by the number of views (divided by 1,000). However, people have to fully watch an ad rather than skip it to count as a "view." Google keeps about 45% of what advertisers pay and distributes the remaining 55% to channel owners.
However, if you are a member of an MCN, they negotiate ad deals with YouTube, and they often claim that they can negotiate a better deal, with YouTube paying out more than the typical 55% share. The MCNs then keep an agreed percentage of that payout, paying the remainder to the creator.
MCNs Can Act to Collect Ad Revenue from Videos That Breach Their Clients' Copyright
Source: tubefilter.com
MCNs also sometimes make money from monetizing videos that others have uploaded containing material that breaches copyright belonging to their clients. For example, if an MCN has a record label as a client, and somebody uploads a video that includes one of the record label's songs, the MCN or the record label could ask YouTube to take down the offending video. Alternatively, the MCN (with the agreement of the record label) might decide to leave the video on YouTube but take any advertising revenue the video generates.
What to Look for in Your Contract
Many MCN salespeople are highly skilled and make their networks sound incredibly inviting to YouTube creators. However, you should always stop and think before committing yourself to an MCN partnership. The pivotal question you need to ask yourself is, what can this network do for me that I can't already do for myself. Are the benefits gained from being a member of this MCN greater than the costs of belonging?
The MCN is likely to present you with a contract full of legal language. Remember that you can make changes to a contract before you sign it. They don't have to be a "take it or leave it" situation, although some MCNs may walk away from the deal if you propose altering the contract they present.
You should take particular notice of clauses in the contract relating to:
- The fees charged by the network
- The specific services and level of support the MCN offers your channel
- Your obligations to the network
- The duration of your contract
- How to terminate your agreement
- Any extra revenue opportunities that the MCN may promise to provide you with
Once both parties agree and sign a contract, it will be binding, assuming that it obeys any contract legislation; for example, you're not under the legal age to make a contract (usually 18, but it depends on where the contract is registered.) At that point, YouTube will begin paying any ad revenue from your channel to the MCN's AdSense account, and your MCN gains access to your YouTube Analytics revenue data. You will lose direct access as YouTube is no longer paying you money, so you will have to check with your MCN how to access revenue data.
Popular YouTube MCNs
Socialblade used to keep an up-to-date record of the MSNs with the most members. But unfortunately, they have had to disable this report due to YouTube compliance rules. So there doesn't currently appear to be a definitive list of the largest YouTube multi-channel networks.
Some of the best-known MCNs no longer exist separately, often because larger companies have acquired them. For example, Disney acquired Maker Studios in March 2014 for $500 million and $450 million in performance-based incentives. RTL Group acquired BroadbandTV in June 2013 and StyleHaul in November 2014. After gradually increasing its investment over a few years, Warner Bros. (later WarnerMedia) acquired all the shares in Machinima in 2016 before shutting it down in January 2019.
However, MCNs still survive and thrive. They just tend to be smaller and often more niche-based nowadays. BroadbandTV still exists in the guise of BBTV, however. By December 2015, BBTV had become the number one MCN globally. BBTV works with creators in multiple ways, including assistance with direct sales, developing custom apps, merchandising, genre-specific value ads, and distribution and label services.
Other successful MCNs currently operating include
- Above Average, a New York-based comedy production company
- Channel Frederator Network, an American animation, video game, and pop culture Multi-Channel Network (MCN)
- VShojo, a network of channels founded by Justin "TheGunrun" Ignacio, a member of the team that founded Twitch, and CTO Phillip "MowtenDoo" Fortunat, a content creator on YouTube to promote and empower English-speaking VTubers (virtual YouTubers)
- Disney Digital Network – the section of Disney that took over Maker Studios
- Tastemade, Inc. – a video network that offers food- and travel-related programming for online audiences
- VA Media – an Australian based (but globally operated) network of genre-based Movie and TV channels on YouTube, Facebook, and other AVOD streaming platforms
Should You Become Part of a Multi-Channel Network?
So, the question that any YouTuber who has enjoyed the first stages of success has to ask is whether they should become part of a multi-channel network.
Ensure that you read any contract an MCN offers you before you sign it. Some channels have missed clauses in their contracts, making it very difficult for them to leave the MCN. In addition, if you have agreed to sign up to the Owned and Operated model, you often won't own the copyright to your back video catalog.
Ultimately it comes down to whether they can offer you a better deal than what you currently have. Can a multi-channel network offer you anything you can't get yourself, and does it warrant the cost?
