YouTube has a content partnership program where if you create videos and those videos are popular you make money off those videos. How? Google, YouTube’s parent, runs ads on your videos. If your videos are generating enough ads, this can translate to a nice chunk of change. While some people would look at their YouTube video creations of funny cats, dog footages and funny jokes as a good source of beer money or spare change, there are professional outfits and well-organized corporations that really seek to build a business based on YouTube.
One of these is Machinima. Machinima is a specialist in video game specific videos and boy, its’s successful. It is successful that it generates billions, that’s with a B of views on YouTube every single month. Machinima is no joke. If you are looking for specific tips, game announcements, game features, video games news, you name it— you just go straight to Machinima’s channel and you will not be disappointed. This is how deep and how awesome this company is. The problem is while it generates billions of news, it hasn’t really translated its ability to get dollars. Consequently, the company has had to lay off employees twice this year alone— that’s two rounds of retrenchments. At last count, it laid off ten percent of its people.
Machinima is huge; it has over two hundred staff but now it is shrinking because of its layoffs. Another sign of trouble that was put on the news is it is trying to raise money and its CEO is stepping down and entirely looking for a professional management. Quoting the words of this former CEO and cofounder “professional management”, Machinima’s fete just goes to show you that consumer driven content businesses are very hard to handle. Unless you are Instagram or Tumblr and you get bought out for a million dollars, content firms usually have a harder goal at it.
Also, Machinima’s situation is quite compounded by the fact that it’s running on the YouTube platform. There’s definitely a lot of questions in the air regarding the video business model per se but in terms of Machinima’s ability to reach its niche audience, it has that locked down— that’s not the problem. The problem is how to turn those page views into dollars.