Bloomberg Businessweek calls it the “YouTube land grab,” while the Social Media Times refers to it as a “buying frenzy.” Big brands rooted in old media are investing in multi-channel networks (MCNs) on YouTube at an increasingly rapid rate. Most recently, “Otter Media, a joint venture between the Chernin Group and AT&T, said it had bought a majority stake in Fullscreen, one of the biggest YouTube networks, in a deal…valued between $200 million and $300 million,” reports Bloomberg.
Fullscreen “represents channels that have more than 475 million subscribers collectively,” according to Social Media Times, thus giving “one of the oldest U.S. media companies a straight line to the talent that younger audiences are obsessed with.”
Because YouTube has an outmatched ability to reach the coveted 18-24 year old demographic, media giants like Disney, DreamWorks Animation (which acquired Maker Studios, and Awesomeness TV, respectively), are jumping into the online video ring. Bloomberg notes that “the stuff favored by younger users…has been built by tiny operations drawing huge audiences to low-budget works. Such companies as Fullscreen came in over the last couple of years and promised professional services to help the little guys scale, signing up creators who thought they might not make it by themselves.”
So for big media companies wanting a way in, and not wanting to start from scratch, they’re investing in already established MCNs, which offer “a fast-track into new media, which doesn’t require building their own distribution channels. Since the motivation for buying MCNs is to invest in the already huge fan bases, there’s no need for heavy marketing. In fact, younger audiences are often more engaged with YouTube talent than with Hollywood celebrities,” explains Social Media Times.
Many industry analysts predict that this is only the beginning of the “YouTube land grab.” Big companies have big budgets, and YouTube has the homegrown, fan-fueled talent and built in audience. Keep an eye out for more to come as the media in general shifts even further towards digital content.
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