There's Real Money In Those YouTube MCNs

Regardless of what anyone may think of a particularly piece of video or a video company, one nugget of information always seems to determine its redeeming value to the universe. And that is its value to somebody that wants to acquire it.

A new report helps set a benchmark. According to Ampere Analysis, the 100 largest YouTube multichannel networks have a collective valuation of nearly $10 billion. 

But while it’s not absolutely true that the good times are over--a new multichannel network cluster or two could still happen--for now it appears all the best ones are taken.

Ampere’s conclusion is that over the last three years, the average MCN is worth 10 cents per monthly view.

So an MCN with a billion monthly views would be worth $100 million and there are 22 MCNs worth at least this much. 

(To digress for a moment, a constant amazement to me is that, right under our noses, there are 22 billion monthly views of any content. And more amazing is that, by and large, the adult world has never heard of most of it. Jenna Marbles still sounds like something prospective homeowners fawn over when they’re on “House Hunters.”)

Collectively, the top 100 MCNs receive 100 billion views per month and so Ampere places their valuation of $10 billion.

And Ampere says, like all other media, big means big: 42% of all of YouTube’s views in Q1 came from the top 100 MCNs. That may just seem logical, but when you consider how many YouTube videos there are and how relentlessly more of them are uploaded, it’s a pretty stunning figure.

Ampere, not surprisingly, concludes, it’s a pretty good business. The value of Disney’s acquisition of Maker Studios, and DreamWorks’ acquisition of Awesomeness, has increased 240% in the last 18 months. No wonder media congloms have rushed in.  

The Guardian, reporting on this data, quotes Richard Broughton, Ampere’s research director, who says, “The business model of MCNs is a good fit for many traditional media companies, which understand advertising business models. They are also an extremely effective way for traditional media players to reach a younger audience which is leaving traditional media in droves, as well as to experiment with new programme formats and content types.” 

The Guardian also notes that MCNs have perfectly positioned themselves to receive all the frantic advertisers searching for millennnials. The marketers flee the traditional media sources to buy into YouTube channels--controlled by the traditional media sources.

Not to beat a dead horse, but let’s revisit the uproar in some quarters earlier this week when it was revealed that Felix Kjellberg earned $7.4 million in 2014 for his PewDiePie sites. Given the success of the most successful MCNs, obviously, it’s nothing to apologize for. He’s getting what he deserves as YouTube’s most successful presenter.

And, in true YouTube fashion, he devoted a video to his defense earlier this week that was refreshing because, basically, he reminded his viewers, it’s a business. It is the nicest, least-guilty explanation of sudden wealth you could ever hope to see.
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