Parallel to the OTT and multiscreen revolution, user-generated content evolved into professional-standard UGC and YouTube stars and channels were born, appealing to millennials. The talent made some money, then hooked up with people who could make them more thanks to experience in business generally and media sales and distribution in particular. The result was MCNs (Multichannel Networks) who slowly added more channels and stars to their stables, achieving economies of scale and an ever-growing viewer and fan base. Now, with proven audiences and revenues, they have become a ready-made solution for traditional media companies looking for greater reach into the youth market, whether as a partner or an acquisition. Some broadcaster groups are building their own MCNs as well.
Through most of this evolution there has been one dominant route to market: YouTube. YouTube lowered the barriers to entry for content creators and provides the advertisers â€“ albeit taking a sizeable share of the video ad revenues. YouTube is still king of the viewing sub-culture that has emerged over the last decade, with hundreds of niche interest channels watched by millions of teenagers and young adults, but it appears that this segment of the media industry is getting too big to be contained within umbrella â€˜platformsâ€™ anymore and the time has come for the MCNs to effectively go â€˜direct-to-consumerâ€™ with multiscreen platforms and portals of their own. It is almost as if YouTube, Dailymotion and their like are about to face their own â€˜OTT momentâ€™ with the emergence of â€˜MCN-directâ€™.
The decision by Endemol Beyond to create an owned-and-operated platform rather than rely on YouTube for its MCN content distribution is a significant precedent. The company, which launched GetBeyond.US in the United States in September, made it clear that the portal does not replace YouTube but complements it and other distribution outlets like Facebook. But Adrian Sexton, Interim President & COO of Endemol Beyond USA, said: â€œThis helps drive our business forward from a unified platform while also syndicating our content. With the roll-out of our premium networks â€“ ICON and upcoming SMASHER and LOOKSY networks â€“ GetBeyond.US streamlines our consumer experience with strong branding, promotion and distribution.â€
The media company talks about achieving greater control over its distribution and allowing it to develop a direct relationship with viewers and advertisers. It is also keen to set new standards for the user experience.
Endemol Beyond worked on this ground-breaking project with Piksel, a company specializing in back office and client technologies and services for multiscreen viewing. Piksel designed and developed the new platform and one of the things it provides for Endemol Beyond, apart from live streaming and monitoring capabilities and the user experience, is analytics. The content owner says it will be able to continuously monitor and tailor the UEX, dramatically increasing personalization in the way the content is delivered.
Kevin Joyce, Chief Strategy Officer at Piksel, points to another important motivator: â€œThis approach consolidates their programing and allows them to reclaim their revenue streams.â€ At the GetBeyond.US portal, Endemol Beyond will be taking 100% of advertising fees.
Joyce reckons this move by Endemol Beyond USA opens the door to deeper branding of content and increased fan engagement through the accumulation and analysis of data. And he claims: â€œUltimately, their content will reach more consumers and devices at a faster rate.â€
Endemol Beyond is an interesting business in its own right. It is owned by Endemol Shine Group (the new joint venture that combines Endemol and Shine Group), so represents â€˜traditional TVâ€™ as the creator, producer and distributor of shows like â€˜MasterChef USAâ€™, â€˜Broadchurchâ€™, â€˜Deal or No Dealâ€™, â€˜The Bridgeâ€™ and â€˜Humansâ€™. The company calls Endemol Beyond USA a â€˜premium content networkâ€™ rather than an MCN and apart from YouTube it uses Dailymotion and platforms like Roku and TiVo to distribute its content. YouTube itself accounts for over 1.8 billion monthly views.
One of the biggest stars in the Endemol Beyond stable is Michelle Phan, with 7 million subscribers for her make-up, beauty and lifestyle content. She also created FAWN (For All Women Network), which includes tutorials about make-up, style and fashion. Phan is also the creative lead for the new â€˜premiumâ€™ lifestyle network, ICON. ICON is one of the many content brands being made available via GetBeyond.US.
Another Endemol Beyond star is Herr Bergmann, whose gaming channel in Germany includes him playing Minecraft along with short films using scenery created using the game engine. He has 790,000 subscribers.
Neil Berry, EVP Commercial for EMEA at Piksel, points to the power of the individual stars as one reason why MCNs can be confident of bringing audiences to their owned-and-operated platforms. â€œThese celebrities and artists have an audience on social media and not just on YouTube and they use social media as a way to engage people and drive the audience to their brand,â€ he points out.
â€œYou can use â€˜teaserâ€™ content, like syndicated short-form and clips, to attract your Facebook and Twitter followers. They have millions of followers on social and that reduces the barriers to entry in terms of building audiences. If the audience is already out there, you no longer have to be nervous that YouTube has all the eyeballs.â€
Berry points to celebrity gamers and how they can lead their audience from one location, like Amazonâ€™s live gaming platform Twitch, to another, like the new YouTube Gaming offer. â€œArtists never had such a one-to-one relationship with their audience before,â€ he contends.
In the traditional TV industry we have already seen how broadcasters and channel owners have used OTT to establish direct relationships with viewers. Channel 4 in the UK provides one good example, with its registered database of over 12 million users for its All 4 online service, all of them providing details on their age, gender and postcode. Harnessing this data, Channel 4 now offers advertisers demographic targeting for advertising within on-demand content.
Piksel provides the back office and client technologies, including analytics, for All 4 and has worked with various broadcasters and platform operators on their multiscreen deployments. This new market development (which we are going to call MCN-direct for want of a better term) could be a useful boost to multiscreen platform developers, resulting in a new breed of online multiscreen platform â€“ all in need of UEX development, client apps integration, analytics, content recommendation and their own content management and streaming capabilities.
Miles Weaver, Innovation Lead at Piksel, has no doubt that MCNs doing â€˜direct-to-consumerâ€™, like Endemol Beyond is doing, is a trend to watch. He says there will be more. As with broadcasters, a key benefit is that you start to own the customer. He reckons one of the key advantages of an owned-and-operated platform for a content owner, compared to YouTube distribution, is the analytics you get access to. These analytics also give you more control over how you present content because they underpin search and recommendation.
Improved content discovery and presentation should be a key ambition for an MCN-direct initiative, Weaver reckons. â€œIt allows new talent to get seen and exposed more. They are all in one place in a centralized platform so there is a higher chance of new talent being seen.â€
Weaver also highlights the possibilities for branding, including branding and sponsorship from advertising partners, when all the content and talent can be found around a central location.
One of the things major brand advertisers want through MCN content is more native advertising opportunities â€“ where effectively their brand is embedded into the content rather than advertised against it. There are plenty of examples of this already from Endemol Beyond, like the way the San Pellegrino water brand created a universe for food lovers, captured in videos, photos and words at www.finedininglovers.com, or the way Optic 2000 got opticians to overcome their fear and perform stunts like parachuting on the condition that, in return, people afraid of using contact lenses tried them out. You can imagine how, with your own portal and UEX, native advertising can be promoted more readily.
Weaver also reiterates that all the advertising you sell via your owned-and-operated portal is yours alone â€“ so no more revenue shares. â€œThe revenue shares are a big issue. It can be challenging to monetize content if you are handing over 45% of the ad revenue.â€
Neil Berry notes that if you build your own platform you can operate different business models, as well, combining advertising, subscription VOD and transactional VOD. Piksel is working with another MCN where this flexibility is needed to suit different content creators. â€œYou cannot do this today on YouTube,â€ he says. â€œYou may have music content where you want to sell it as pay-per-view and then move it into an SVOD library. Everyone is different.â€
Perhaps most shockingly, Berry reckons that YouTube is showing its age, in terms of the user experience, and is handicapped by the need to appeal to everyone. â€œRight now, the YouTube UI experience is very dated and it is the same experience for everyone. MCNs can create a more compelling user experience, including content recommendation, and within the service you can personalize the UI experience according to the channel, genre or artist. You cannot do that on YouTube.â€ The umbrella UEX for the MCN-direct platform can be tailored for a target (and if necessary narrow) demographic, as well.
Weaver points out that you can only evolve your UI as fast as the slowest runner, implying that the mass appeal of YouTube has become an Achilles heel when it comes to user experience. â€œYouTube has not changed much in five years; we are way ahead of where we were five years ago,â€ he declares.
Weaver adds: â€œWhen it comes to the UI, millennial expectations are huge. Our research shows that the user experience is one of the most important aspects of a service. If it is not compelling enough, people will go elsewhere. Brands like Endemol Beyond want to be at the cutting edge.â€
The MCN content market is only likely to grow â€“ explaining why media giants like Disney, RTL Group, ProSiebenSat.1 Group and Modern Times Group (MTG) have made MCN content and distribution a key part of their digital strategies, whether by establishing their own MCNs, buying them or both. And Weaver predicts that while millennials and Generation Z may be â€˜digital-firstâ€™ (meaning those that prefer to get their content online, even if they still watch traditional TV) the kids that follow them will, in ten years time, be digital-only.
The original â€˜prosumerâ€™ video revolution on YouTube has blossomed into a significant video sub-culture that appears to be near the tipping point at which it has to be considered mainstream. That explains the rush of â€˜mainstreamâ€™ media into the MCN space, the growing scale, the apparently natural progression towards wanting a bigger share of the revenues yourself and greater control of your customers, the increased investment to exploit new markets and with that, the ability to launch your own multiscreen services. Launching a direct-to-consumer multiscreen platform is still a big deal.
We could be about to witness a repeat of what happened in traditional TV, where aggregators were confronted with channel owners who were their partners and also their competitors (thanks to direct-to-consumer online services). Pay TV operators might enjoy watching this battle from the sidelines. The likes of GetBeyond.US might also provide them with the perfect weapon for keeping their younger consumers on-platform. After all, if you can integrate Netflix and Maxdome onto the set-to box to stop people picking up their Roku or Apple TV remote controls, then why not include a well-designed MCN portal with a great user experience that is filled with content that does not directly compete with premium drama, movies, sports or wildlife programming?