Consider the YouTube multichannel network (MCN), Google content partners that are responsible for both production and audience monetization and which get 55% of banner and pre-roll ad revenue. The digital audiences MCNs attract is, in turn, attracting telcos and broadcast media companies who wish to grow their addressable audience.
With YouTube generating 300 hours of content uploads every 60 seconds, "there's clearly a lot of video inventory out there just on YouTube," said Rich Raddon, a cofounder of video ads platform ZEFR and Movieclips.com. "As dollars shift from broadcast to online video, you want it to happen in a way that you can charge for the value of reaching that audience."
AT&T’s Digital Video Dreams
Otter Media, a joint venture of media holding company Chernin Group and AT&T, bought in late September a 60% stake in Fullscreen, an online media company and YouTube MCN (WPP remains a strategic shareholder). Fullscreen is valued at roughly $250 million.
This deal preceded German entertainment and media giant RTL Group’s purchase of YouTube network StyleHaul for $151 million. And last spring, Disney acquired Maker Studios for $500 million – a sum that could increase to $950 million if Maker hits certain performance targets.