The secret sauce behind YouTube Stars - Multi Channel Networks

Today I want to reveal to you a little known secret about successful YouTube Content Creators.

Most of them have signed up to a new breed of networks: Multi Channel Networks. The XXIst century version of record labels, but adapted to video, so we could call them "video labels".

These new networks approach rising or established YouTube stars, wherever they might be in the world, with a simple proposition: you dedicate your time to creating cool stuff, and we take care of everything else. Now, this everything else can be different depending on the multi channel network (MCN) as I will cover later on.

According to the best analysis I have seen on MCNs developed by Enders Analysis, "MCNs provide production, traffic, monetisation and rights management services to content creators and brands"...and ..."are a key element in the professionalisation of YouTube".

I wanted to share a video from Techcrunch dedicated to Fullscreen, one of the top MCNs, where they describe what is their business, and how they go about servicing their partners. Interestingly, one way they do so is by providing a Creator Platform, a dashboard and user interface where partners can monitor their performance and gather crispy insights that enable them to create better contents and make more money.

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MCN's have proven successful at aggregating top content from YouTube, and creating networks segmented by content, thus enhancing the opportunities for audience to find hot videos in any topic. Also, has made it easier for advertisers to connect to relevant passion communities. In fact, some MCNs have even got their own sales force with which they can sell advertising inventory direct to clients, thus helping their partners get a higher fill rate of ads in front of their content.

MCNs make money by taking a share of the advertising revenues YouTube pays out to the content creators that are under their influence.

These networks, which are mostly US based, have attracted a lot of interest in the past 24 months, specially by venture capital firms and established multimedia groups that see in them the future of how these huge online video ecosystem might operate, and a potential source of great profit.

Going back to Enders Analysis report, they segment MCNs in basically two big groups with diverging models:

• Aggregators
• Studios 

"This general distinction between Aggregator and Studio MCNs is based on the services they offer to the majority of their channels. Aggregator MCNs tend to have thousands of channels in their network, while Studio MCNs tend to have only up to a few hundred channels. With regard to their entire network, Aggregator MCNs are hence more focused on scale and less on individual channels and premium development than Studio MCNs. Aggregators are sometimes compared to ad networks while Studio MCNs resemble content development platforms."

Aggregators try to help out with copyright infringement, royalty clearance, advertising dollars etc. While Studios focus more on helping YouTube creators in improving their capacity to ship great content. And while some focus on YouTube native content, others are working hard to monetize better traditional content uploaded to the web.

Most recently, some MCNs are starting to help advertisers integrate their brands within their partners' content, and thus have brought to YouTube the typical product placement that has been working in TV and movies for ages. This said, they are doing so with an elegant twist as YouTube creators are not as easy to manage as the typical production houses of the TV world.

Take notice of some of these names because you are probably going to hear a lot more about them in the coming years: Machinima, Base79, Maker Studios, Stylehaul, AwesomenessTV, Big Frame, Channelflip and host of traditional players such as Endemol, or BoomerangTV, which are just learning the ropes of the new model.