How To Start A YouTube Multi-Channel Network

September 06, 2014 3:29 PM ‐ Club
YouTube
It seems like a logical thing to do, you're a fairly successful YouTube channel, you have some friends that do pretty well too.  Why not bring them all together in an MCN?

Introduction

Before we delve into the detail of forming an multi-channel network (MCN), it's important to ensure we understand exactly what an MCN is.  By becoming an YouTube approved MCN, you'll be given access YouTube's CMS (content management system) which allows you to "roll-up" channels under your MCN.

This means that these channels you recruit become exclusively part of your network and all of their Google AdSense revenue from their video views goes to you.  The channels are locked into a contract with you and can only disconnect at the end of contract term.  Some MCNs offer a "no lock in" contract allowing Creators to come and go at any time.

There are now hundreds of MCNs, some of the biggest networks currently in operation include the likes of Maker, Fullscreen and BroadbandTV but as well as these full MCNs, there's also hundreds of sub-networks (sometimes also known as virtual networks).  These sub-networks are essentially smaller groups of channels which are rolled up into the parents CMS account but a cut of the revenue is shared with the company running the sub-network.

You may be wondering what's in it for the Creator.  Well, although all of the Creator's ad revenue goes straight to the MCN, the network only takes a cut and an automatic payment is sent to the Creator each month with their share, in exchange a network's primary aim is to help the channels under its control to grow and earn more money.

The split offered by a network typically ranges from 60/40 (in favour of the Creator) for channels who achieve over 1,000 views a month up to 80/20 for channels with over 1,000,000 monthly views.

Starting a network isn't easy, it's competitive market place and there's no clear route into Google.  You can't just apply or fill out an application form.  MCNs tend to be born out of bigger channels who are invited to become an MSN by their YouTube Partner Manager.

First Steps

In order to be considered as a potential network, there are a few milestones you need to hit.  None of these figures are officially publicised by YouTube but anecdotal claims suggest that your channels needs to be achieving more than 30,000,000 monthly views, but this doesn't seem to be set in stone.  It's more crucial that you have a contact at Google in the form of a Partner Manager.

How you are assigned a Partner Manager is also a bit of an unknown, it's commonly believed that you are assigned a contact once you hit the point of achieving 15,000 hours of watch time per month.  YouTube have recently introduced benefit levels.  Channels with under 1,000 subscribers fall into the "graphite" category and have no direct support route into Google.  Channels with up to 1-10k subscribers are "opal" and have access to workshops and local meet-ups and events.

The next level up, bronze is available to those channels with more than 10k subs and at this level, if you want support you can apply to join the Channel Consultation Programme and you're contacted by YouTube and assigned a YouTube Partner Manager.  You cannot join this programme if you are currently a member of an MCN.

Formation Of An MCN

There's a few basic requirements you'll need to fulfil before you can launch an MCN.  Firstly, you need to be a registered company, you can't create an MCN as an individual and you'll need a strong business plan to present to Google.

Running an MCN isn't just about cashing in on Creators' channels, you need to give something back and putting this support in place isn't cheap.  Most expert in this field say that the normal capital required to set up an MCN is $1 million, although some say it can be done for as little as $100k.

These start up funds would be need to staff your network, a successful network needs to have at 30,000,000 monthly views, that's 1,000,000 per day or 5,000 channels with 200 views per day.  5,000 channels will create a lot of work, you'll need Contract Managers to keep track of terms agreed with your Creators and you'll need some specialist staff to offer support to these channels.  

You will also need commercial/sales staff to negotiate product placement and advertising deals on behalf of your partners and staff to deal with the ongoing task of recruiting new channels.

Of course on top of that there are a couple of other core things you'll need to get your MCN off the ground:

1. Creator Dashboard
The hub of your network where you can share information, keep your partners informed and display their stats and revenue reports.

2. Reporting & Payment
You'll need reporting tools so you know how much you're making and what channels are earning, this will then need to send automated payments to your Creators so that they get their share.  There are tools which can manage this for you like Bent Pixels.

As an MCN you need to follow some rules, these are YouTube's "best practice for MCNs" guidelines:
- Avoiding spammy, misleading language to recruit channels to join an MCN.
- Clearly explaining in a contract the services and levels of support provided.
- Acting in an honest and transparent way with respect to services offered and contractual obligations.
- Onboarding and releasing channels in line with their contracts.

How To Get Funding

As a start up, funding your company can be just as difficult, if not more difficult than getting a foot in the door at YouTube. One route you could go down would be to seek investment from an established, traditional media company or talent agency who maybe looking into branching out into social talent and YouTube content. There are also companies like Obelisk.TV which are dedicated MCN incubators who will talk to Google on your behalf to negotiate your CMS access. They can also set up a website for you and work with you to create your brand identity and logo, they may even be able to offer you office/studio space. The final route is to crowdfund your business, you can use sites like CrowdCube to do this.

A Different Approach

If you goal is to help channels grow and not simply to cash in and take a cut of their AdSense revenue, then there are alternatives to starting an MCN, such as creating an online community for YouTubers, or an informal network of channels which could cross-promote each other with a centralised website hub to aggregate and promote their content. You could offer support forums, email newsletter or even a Facebook page like London Small YouTubers.

Which ever approach you take, it's going to take time, dedication and a lot of planning.
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