Poaching, a trend among YouTube Multi-Channel Networks, I define as follows:
poach (pch) tr.v. poached, poach·ing, poach·es – Offering a channel that is already under contract with a competitor a more lucrative deal, thus asking them to break their current contractually obligated agreement in whatever way possible to switch networks.
It’s a very real issue within the online video industry, but I’ve strangely never heard or seen it publicly discussed. I always found that odd, as it’s such a MAJOR problem for BOTH organizations that aggregate YouTube channels and the talent behind those channels. (Note: The ALL CAPS is for a lot of added emphais.) In fact, it’s so much of a concern that there is an unwritten rule between MCNs. It goes something like, “If a channel is currently under contract with another network, that channel shouldn’t be approached.”
But do YouTube Multi-Channel networks follow this unwritten rule? Of course not. Poaching is always occurring, it’s always a concern, and it’s (most of the time) always bad for both the MCNs and the talent they’re trying to attract.
Poaching inflates the advertising rates MCNs pay for talent, which only provides short-term benefits.
One of the ways in which Multi-Channel Networks initially attracted talent was to offer guaranteed advertising rates. By locking in a channel at a $2 or $3 (or higher) CPM for an extended period of time, an MCN could add to its overall view count – making it easier for it to attract big advertisers – and hopefully make a profit in the not-so-distant future. If, for instance, YouTube was able to start selling ads at a $5 CPM, then the MCN could collect that $5 CPM, pay out the $2 or $3 owed to the channel, and pocket whatever was left over.
On the flip side, the guaranteed CPM gave channel owners the ability to rely on a steady income that didn’t fluctuate with YouTube’s ever-changing ad rates. It’s a great business strategy, except for the fact YouTube CPMs haven’t increased as much as MCNs expected.
Multi-Channel Networks are now, for the most part, discontinuing their guaranteed ad rates and switching their business models to revenue share agreements with talent. In exchange for providing marketing, production, programming, partner management, and/or sponsorship support, MCNs are now taking a piece of the action.
That shift in business models and strategy has been disastrous for some content creators. While a high CPM is fantastic for talent in the short-term, it’s created a highly unstable economy for their services.
Let’s say an individual quits her job to work on her YouTube channel full-time. She could be set up for financial failure once whatever MCN she’s signed with is forced to reset its pay rates based on A) what the MCN can afford, B) what makes the most sense for the company long term, or C) is best for the network if the channel’s popularity decreases. A number of networks have renegotiated their deals with talent in the past year, which has forced some of that talent back into jobs that don’t include making videos for a living.
Multi-Channel Networks will often prioritize poaching over other issues.
Support departments will prioritize certain issues over others, like any individual or team in any job at any company. It just so happens that acquiring and holding onto big name talent is generally at the top of the priority list.
Big stars with massive subscriber bases not only attract views, but they attract other YouTube stars, burgeoning talent (who could later become big stars), and advertisers. So, one person looking to leave or come to an MCN may postpone the needs of dozens of other channels. Preventing poaching is a time intensive task, as the Multi-Channel Network has to maintain the relationship with the channel while getting them back on track and passionate about their current relationship.
Thinking ahead, poaching could also lead to worse issues for Multi-Channel Networks, as it could encourage the unionization of YouTube channels when dealing with MCNs.
While the above isn’t likely, it is a possibility. If Multi-Channel Networks show a lack of benefits with channel partnership and prove to not be acting in the best interest of YouTube as a platform, what is to keep YouTube itself from stepping in to provide some form of regulation?
While I doubt YouTube has any desire to police the space more than it already does, I think it’s important for both talent and the MCNs to follow through on whatever agreement they’ve signed. If you’re talent, stick it out with your network unless they end up breaking the terms of your channel partnership agreement and know that agreement inside and out before you sign. If something is promised, make sure it is included in the agreement. If you’re a recruiter, play by the rules and wait for a channel’s agreement to be over before giving them a sales pitch. The last thing anyone wants is for a creator’s income to suffer.
At the end of the day, poaching is a reality and is damaging to both creators and networks. But as businesses grow in our space we need to mature and learn from past mistakes. While things do move quickly and everyone is always looking to get the best deal possible, we need to start thinking about the future and playing by a set of rules that protect all the parties involved.
A former Senior Manager in Affiliate Development at Machinima, Chris Landa developed expertise in YouTube after graduating from Carnegie Mellon University’s Master of Entertainment Management program. An avid Liverpool Football Club supporter, he can often be found in a pub on weekend mornings and is extremely hateful of the 8 hour time difference between Los Angeles and the United Kingdom.