The Stars of YouTube and Vine
J Thoendell stashed this in Tech
But digital feels like the future. Big media companies couldn’t buy YouTube, which has long belonged to Google, and they couldn’t buy most of the individual creators, who’d already been signed by multichannel networks. (They couldn’t even buy Vine, which had been acquired by Twitter; software-based companies were much quicker to see the promise of video.) So, to at least be hedged on this digital thing before it was too late, they started snapping up the M.C.N.s, which had begun styling themselves “next-generation media companies.” Once DreamWorks Animation bought AwesomenessTV, Disney bought Maker Studios for five hundred million dollars; Otter Media, a joint venture of A. T. & T. and the Chernin Group, bought a majority stake in Fullscreen for more than two hundred million; and the European broadcasting group RTL bought most of StyleHaul for a hundred and seven million.
As Michael Green, the chairman of an M.C.N. called Collective Digital Studio, said, “The play is that billions of dollars in TV advertising is going away—everybody zaps past the ads, and kids don’t watch TV anymore—and we all have our hands out, waiting for it.” This idea makes intuitive sense, and, indeed, Nielsen reports that, while people over sixty-five watch about forty-seven hours of television a week, most teens watch only about nineteen. Yet the payoff may be slow in coming: young adults still watch more than five times as much TV as online video, and TV advertising is actually growing much faster than digital-video advertising. YouTube will make an estimated $3.4 billion this year from advertising—but CBS alone earned $8.8 billion in ad revenues last year. Thus far, few, if any, of the M.C.N.s have made a profit.
A ridiculous amount of money has changed hands to own the M.C.N.s.
YouTube is going to make $3.4 billion this year from advertising?! That's astounding.