Machinima: important changes

[Wreckless Eating]

Machinima announced today that they are laying off 42 employees-which represents 30% of their workforce. A big part of the layoffs have to do with restructuring their sales force. Pre-roll and banner ad sales are being outsourced to YouTube and the remaining sales staff are only concentrating on brand deals. It's unknown at this time if they will continue to use outside sources for ad sales as they did in the past. What does this mean for the average partner? Unless you are large enough to be receiving brand deals, it probably means less revenue as they are almost completely dependent on YouTube for ad sales.

Sources:

http://www.reelseo.com/machinima-youtube-ad-sales/
http://www.tubefilter.com/2014/03/06/machinima-lays-off-42-employees-restructuring/
http://www.thevideoink.com/breaking-news/machinima-lays-42-employees-latest-round-cuts/#.UxknipK9KSM

 

[sickmind33]

well then, glad I don't work there. I'd be freakin out

 

[Shane]

Saw this earlier, what's this now? 100 staff laid off in a year?

Depending on YouTube entirely might be ok if they filled 100% of monetizable views but with a 65% average fill rate, you're losing out on potential earnings with any MCN that doesn't sell in-stream and overlay advertising

If I was partnered with them especially as a top 100 or so channel, I'd be pretty p****d right now

 

[Kamran Sankey]

This is interesting, saw it earlier today as well. I believe their strategy is a little outdated but who knows maybe this could lead to something noteworthy.

 

[Shane]

Their strategy is stale, the board needs a younger outlook if they are to survive in this market I believe.

The whole business strategy needs re-structuring tbh

That's including hub channels, smaller channel partnerships and the top 50 channel partnerships

For hubs, they need to get back to the good quality, 3-5 uploads a day they used to have instead of just spamming videos out by 13yr olds recording voice with their iphones
For smaller channels, they need to lower the lock-in to 1 year and possible offer 70% instead of 60.
and For the top 50 channels in the network, they need to concentrate on in-stream adsales, especially mobile and only take a cut of ads they sell not those sold by AFV.

My opinions

 

[ConnersCraft]

The whole business strategy needs re-structuring tbh

That's including hub channels, smaller channel partnerships and the top 50 channel partnerships

For hubs, they need to get back to the good quality, 3-5 uploads a day they used to have instead of just spamming videos out by 13yr olds recording voice with their iphones
For smaller channels, they need to lower the lock-in to 1 year and possible offer 70% instead of 60.
and For the top 50 channels in the network, they need to concentrate on in-stream adsales, especially mobile and only take a cut of ads they sell not those sold by AFV.

My opinions

I think they need to stop focusing on those hubs all together if they cannot return them to what they were created to be. In the golden days of Machinima, their hubs were basically a homepage for people to view all of their favorite game commentators. Hutch, Seananners, Whiteboy7thst, OpticJ, etc all used to post there often. Those big names brought viewership, and the viewership brought the big names. In recent years views have been higher on personal channels, so the big guys don't want to post on hubs. The only way they will ever have successful hubs again is if they assemble a team like the original Respawn team that was the face of Machinima. They need to understand that offering partnerships did not make them a business that at one point tried to get a $1 billion evaluation. Having an ad sales team of 100 people did not get them where they were. The high quality content on Respawn drew millions of viewers who envied the prestigious 'M' logo on the channel banner. This led to more people wanting partnerships, so they slowly lowered the requirements making their partnership less "special". They had a monopoly on gaming partnerships, and if they stuck to their working business plan they would still have that. Imagine if PewDiePie, SkyDoesMinecraft, Syndicate, CaptainSparkles, etc were all on Machinima (as every large gamer was on Machinima in the beginning). They would be the billion dollar company they once claimed to be. Obviously they need an ad sales team to stay competitive, but they need to go back to what they once were. One channel the size of someone like PewDiePie is worth 10x all their channels under 1k subs combined, so why partner them? Currently they have people employed whose only job is to sign contracts with 13 year old kids who will never earn the company a dime. Machinima could easily be run by 20 employees, but they decided to scale to something they did not need. They tried to become "TV on YouTube" with Machinima Prime and they lost millions of dollars. They try to have big offices in huge cities like London when in reality they could operate perfectly with one office is just LA. Some of the most successful businesses in the world are so successful because they operate with almost no overhead. Machinima never had the revenue to support their business plans. In conclusion, bring back the original Respawn team at any cost, and bring back a profitable Machinima. I bet they profited more off Respawn shirts than they have on all their small channels combined, and there is literally no cost to the to sell the shirts as it went through a third party company. I didn't notice how long and repetitive that was but i'm done with this rant now...

 

[MrTacticious]

If they hit the average partner (me included) I will just switch networks. They are really open to why you want to leave, even if you still are under a contract

 

[markkaz]

Unfortunately, I think that the whole Google/YouTube/Adsense/Networks business model is not sustainable. Google won't give more favorable terms and networks can't afford to really have the man-power that is needed with such a small slice of the pie.

 

[TheBatteryChicken]

I actually used to like watching Machinima when the had Hutch, Sark and Seanners presenting everything, they had the sort of humour that i like. Ever since there was the big uproar about their shady contract dealings though they have just been constantly going downhill and im sure not many people are surprised with the layoffs. It sucks that people have lost their jobs but with the way Machinima handle a lot of things it will probably just keep getting worse.

 

[Shane]

Unfortunately, I think that the whole Google/YouTube/Adsense/Networks business model is not sustainable. Google won't give more favorable terms and networks can't afford to really have the man-power that is needed with such a small slice of the pie.

From what I've seen I disagree for the most part plus Machinima never take a small piece

Also I get the need for TV/ Netflix quality content but laying off most of your sales team when you are a few months away from a 10-15M$ investment just so you can sink pretty much all of it into projects some of which, knowing Machinima will likely be cancelled before they air but after being partially paid for.