Machinima! Adventures of a Digital Content Company

Millions are watching. When will they cash in?

Last year, Machinima rolled out perhaps its most ambitious project yet in RCVR, a well-received scripted sci-fi drama that would not seem out of place on cable. The show, sponsored by Motorola, pulled in as many as 1 million views for each of six episodes. While Machinima has not yet decided whether to renew RCVR, another series, Bite Me, a zombies-chasing-gamers series being produced with Lionsgate that attracts half a million views per episode, is in its second season.

Machinima says it has dozens of scripted original series in development, and professionally produced content is a major priority. At the moment, Machinima’s programming isn’t necessarily the focus of Machinima the brand. Per YouTube, Machinima’s content has generated over 3 billion views, while the Machinima YouTube network has scored 24 billion.

This, as comScore puts Machinima’s YouTube channel at just 23 million users. The reason for these discrepancies: Machinima has over 4,200 partners—amateurs and semi-professionals who produce Machinima videos and partner with Machinima on distribution and ad sales.

Take Reckless Tortuga, founded by Jason Schnell. Schnell worked for various Web publishers in the mid-2000s while making comedy videos on the side with friends and family.

His spoof show, called The Online Gamer, which imagines Halo fans taking their gaming behavior into the real world, was picked up by Machinima, which offered Schnell a partnership. Reckless Tortuga saw its number of subscribers go from 50,000 to 150,000 in just a few months. “It exposed us to a whole new audience,” says Schnell, who has since quit his day job to work on Machinima videos full-time. Machinima handles ad sales, “and they don’t ever ask for creative control,” he says.

Not every partner is so pleased. According to a report last week on the gaming blog Kotaku, some producers feel trapped by what they feel are restrictive contracts with Machinima. There’s even a video circulating that’s critical of the company, produced by Machinima producer OneyNG, called Mash*tima Partnership. In the past, Machinima retained the rights to sell ads against videos produced for its YouTube channel in perpetuity. The company has since shortened its contracts and made it easier for producers to opt out, says a spokesperson.

“Of the entire group of nearly 4,000 partners, very few have ever had problems or issues—about one or two percent—over the past two years,” says DeBevoise.

Machinima’s heavy reliance on third-party content could potentially pose a problem for its advertisers as well. While Reckless Tortuga’s videos are a bit out there, those from partners Appsro and Smooth Few Films are even farther out there. Take Smooth Few Films’ The Bag Boy, which features a father explaining to his son in the game Halo that he shouldn’t “hump a corpse.” Or Appsro’s Welcome to Gameshop, an animated clip sponsored by Bing that spoofs the aggressive upselling so common in video game retail outlets. In the clip, a clerk asks a patron: “Can I interest you in a butt f--king?”—before dropping equally non-family-friendly terms.

How much of Machinima’s audience is built upon eyebrow-raising, third-party content like this? The company doesn’t break out those numbers but promises it will incorporate more ad-verification tools like AdSafe. “The long-tail content you might find across our global network is very diverse,” says DeBevoise. “Advertisers look to us to help them enter that world, translate that audience to them and translate their brand to that audience in a safe way that’s authentic. That’s something a lot of traditional media are not really able to do.”

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