The Confessional #4: C-Suite Executive at an MCN

My latest interviewee for The Confessional is a former C-Suite executive at a well known MCN. In this extensive interview we covered a great deal of material, including what he feels MCN’s should be offering creators and wow creators often get sucked into signing with MCN’s and why there’s no loyalty between creators and MCN’s.

The major points of our interview transcript include:

•           – Why YouTube created MCN’s and how they’ve evolved
•           – Why creators often sign with MCN’s
•           – How brands should work with creators

The Confessional is a series of anonymous interview with influencers, brands, marketers, agencies and MCN executives to get honest, no-bullshit opinions on working in the space – the biggest gripes, the toughest lessons, the most valuable advice.

The following has been edited and condensed for clarity.

Coming from the MCN side of the equation – what was it like working with the brands, the creators, the agencies? What worked and what didn’t?

My understanding of the MCN industry is that Google created it as a way to help produce better quality content and help support creators. It’s largely populated with people who are coming from the talent side of the equation versus the advertising agency side or the technology side.

The biggest challenge is that the industry is new, so the norms have not been defined clearly. You have the MCNs, you have the agencies, and I’m saying “talent agencies,” like WME and CAA. You have the advertising agencies. You have managers. You have creators.

You have a lot more inputs to that equation than what you had back in the old television days. All those inputs and all these people who think that they have a role in the equation make it complicated to establish any real norms, or rules of engagement, metrics, and ways of doing business.

The players have not clearly defined their roles, and because of this everybody is running towards every opportunity. And that causes murkiness. That causes aggravation. It causes the true value of influencer to be masked because of the immense amount of waste of people’s time to get to the bottom line.

So, depending on your entry point you could end up with a very different deal?

Right, and just to focus on the MCN part of it, one of the big problems with MCNs is that they don’t harken back to their mission. Basically their mission was not defined by themselves.

Their mission was defined by Google and it is to add value. That’s ambiguous, but you could say there’s three places that MCNs could add value.Very few are doing this. You could say ad agencies and talent agencies could do two out of three of these easily. 

•       – By growing views & subscribers
•       – Providing business and/or production support
•       – Growing revenue

So, it’s important for MCN’s to be doing something different – creating technology, interesting integrations with available APIs etc.  Because you want to differentiate yourself and if you want an acquisition it’s good to own IP or unique processes .

Even if a creator is signed to an agreement, then at some point that creator’s going to want to get out of that agreement or that agreement’s going to expire. That’s not something other companies really want to invest in because you can go and hire talent.  This is the secret many in Hollywood do not want you to know, talent will “go” with almost anyone who is creating interesting stories, product, services.  The challenge is managing the workflow.  A lot of brands have success working directly with talent.

Anybody can hire your talent. That’s something people forget.

So, what’s the future of MCN’s?

It’s hard to build a product in technology that is actually going to be used by creators, but that’s the need.

We should be more focused on technology to help channels grow.

My classic example is Brendan’s Omelet Channel and my Crêpe Channel, and your handler at the MCN says, “Hey, Brendan. There’s this guy who’s making omelets and you’re making crêpes and you basically have the same audience and you’re both releasing videos on Tuesday. Why don’t you switch to Wednesday and point people there to Interviewee’s channel on Tuesday? And he’ll reciprocate and then down the line, let’s see if there’s a collaboration we could do.”

So, that is a perfect example of not only adding value, but growing the network because traffic goes back and forth.  A couple of MCNs have automated this process again points to the power of making great product and/or using technology to add value. More monetization opportunities. That’s an example of a great way an MCN could add value.

What actually happens is that everybody goes running into the space and the investors who put money in go, “Hey, wait a minute. You guys aren’t making any money. You’ve got lots of expenses, but you’re not selling enough.”

So, the MCN’s try and sell more media (not just brand integrations). The problem with that is that that media is already being sold by a person who has a Google business card OR it’s being sold in real time via an exchange.

The largest ad exchange called ADEX, which is part of DoubleClick, which is owned by Google.

By definition, if you have a seat on the exchange, you can buy and sell YouTube inventory. So, you can just go bid on channels in the exchange because there’s not an exclusive. You can get that inventory if you want it and probably pay less than what the Google salesperson is selling it for if you buy it via the exchange.

So that’s a challenge for MCN’s. Any savvy media agency is going to know that they can buy inventory via an exchange. They have a trading desk.

That is a perfect example of how an MCN fails because an MCN goes to try and sell more media, which isn’t really working because of the exchanges. And, as a result, helping to grow their audiences is falling by the wayside.

Why would the MCN’s sell media? Forget about that the exchange even exists – there are hundreds of Google salespeople crawling over every agency with piles of data. You can’t compete with that nor should you.

They [MCN’s] are just not going to sell the media. They’re not going to get the price that they want. And, the customers don’t want to buy their media because they’re able to get it already and from a cheaper source.

So, how were you guys actually adding value to creators?

Every channel, as part of our agreement would get optimized. We were trying to create technology to solve this, so that it wouldn’t become such a manual process.

You really need a technical understanding of what the Internet and in particular YouTube is…how it works. If you don’t understand the technical intricacies or the map of how to navigate this web, you basically won’t get the views that you need for free via SEO. And that is, once again, a point where MCNs have failed, where they don’t offer leadership. They don’t offer enough of those services.

I’m proud that we offered that. I think most MCN’s just made a lot of promises, and were just casting a wide net and pulling channels in as fast as they could without actually delivering much value.

There’s a lot of name dropping and that’s like heroine to a lot of young creators. They want to work with the big names or go to Hollywood and that’s what sucks them in. They have a little success and they think they’re going to be on CSI. That’s it. They’re just like, “Oh, my God, Hollywood. I’m doing this. Yeah.”

Let’s transition to the advertising side of things. Do you feel brands are doing enough to capitalize on this space?

What’s happening now is that MCNs, advertising agencies, talent agencies, and creators themselves are making it very difficult for a brand to figure out how to get from A to B.

I think that brands over a certain size…let’s say, if you have over $50 million in gross sales per year, they should be interacting with influencers and creating content directly.

And when I say “directly,” I meant they shouldn’t be going down the chain, the digital agency goes to MCN, who goes to the manager, who goes to so and so and then finally goes to the creator who comes up with the idea. That needs to stop.

There’s no reason to have that kind of expense. The whole thing about the Internet is that it removes layers, so you can have more direct control and access and that usually means you save money and you can do things quicker. And that’s what should be happening in 2015.

It should be, “Decide, create, deploy, measure.” And then you just keep doing it.

In terms of execution, there’s always tension between the creator and the brand. What do you think is the best way to navigate that?

Well, that’s called “creative tension” and that’s something that has existed since day one. And it exists in the writers’ room. It exists on the set.

When Martin Scorsese or Francis Ford Coppola is yelling at you and Marlon Brando in “Apocalypse Now” to act a certain way.  It exists everywhere. So, I think people are just basically fucking idiots if they don’t understand that.

But you have to set and control expectations. My rule is early, loud and often. You over-communicate to ensure everyone’s on the same page throughout the process.

What advice do you have for those working in the space?

I don’t care what anybody says. This is goddamn 2016.

There is so much talent, out there.  If someone’s an asshole and difficult to work with.  Guess what. You can find somebody else just as good. I’m not saying it’s going to be easy, but you can find somebody.