ETCA 2016: The rise of Multi-channel networks and personalization

Jim Burger, a familiar figure to those who've attended past SMPTE events, kicked off a panel on how internet technology can be used to make the electronic entertainment experience increasingly personalized, especially through the use of MCNs (Multi-Channel Networks). To kick off the panel, Jim showed that traditional TV viewing is decreasing for every age group except for those over 65 years of age. At the same time, prime-time internet growth is increasing. This represents a unique challenge for content providers. MCNs are one answer.

An MCN is essentially a bundler of related channels, in many cases simply individual YouTube channels. That bundle of channels can then be marketed to advertisers and sponsors. The advantage to the consumer is a curated collection of related channels, that makes finding and watching content of interest much easier and more personal. To put this in perspective, 8 out of the 10 most popular celebrities for teenagers are YouTube stars. Those stars are then often recruited by more traditional media companies, and go onto additional exposure through TV and movies. This can work the other way, also. The Food Network, that might get about a million viewers for a prime time show, has over 180 million views on YouTube in March.

Panelists see a trend where MCNs will become more focused on their most productive content creators, and expanding their portfolio of analytics to further improve their opportunities for monetization. Max Hirshik from Paladin views the change from traditional TV to online video as a revolution that is dramatically changing the entertainment economy. Hirshik said today there are a few dozen major MCNs, such as Maker Studios (now part of Disney), and Fullscreen, that build much of their own technology. Part of the reason for this is YouTube is only providing the tools needed to be an MCN to large players. MCNs got started taking a few percent of the ad revenue that would otherwise have gone to the content creators of their channels, but now are adding revenue streams from sponsored content and other more direct marketing campaigns including merchandise. There is also a proliferation of hosting options for MCNs, as other services like Amazon Video (and soon Facebook) that have added the needed infrastructure -- meaning most MCNs are likely to become multi-platform.