Now that alternative platforms to YouTube are taking hold, the Multi-Channel Network (MCN) arena is changing swiftly. Influencers are now reaching millions through their videos and content on various video platforms. With increasing notoriety, many have their own product lines, bestselling books and movie and television cameos. Due to their large fan bases, many of these influencers have marketing and branding opportunities through digital media that are more lucrative than ever. Digital content and strategic positioning of that content is critical to reaching Millennials and the future generations of consumers who will drive increasing demand.

As discussed in our recently published whitepaper New Media Industry Trends: Consolidating to Meet Consumer Demands, the 2015 GHJ Entertainment and Media Survey found that viewers (40.9 percent) now prefer to watch video content on the Internet, which was the #1 answer (with basic cable coming in at 31.8 percent, network TV at 27.3 percent and Subscription Video on Demand (SVOD) at 22.7 percent).

The survey also found that advertising revenue is decreasing in traditional channels like network TV and cable but is increasing on the Internet. In fact, 22.7 percent of survey respondents said their audience primarily advertises via the Internet, which was the #1 answer (with basic cable, network TV and SVOD all tied for second place at 11.4 percent). In addition, 61.3 percent of survey respondents felt the Internet would have the biggest increases in advertising three years from now.

Competition is Increasing

YouTube has long been the go-to platform for digital video consumption, but as discussed in our previous blog post, competition is coming from many other platforms, including well-known names like Verizon, Comcast, Facebook, Yahoo, Amazon, Instagram, Vine, Snapchat, Spotify, Vessel, Vimeo, YouNow and DailyMotion. Due to this expansion, MCNs are able to provide additional services to support their influencers with production and promotion services, creating revenue streams for the MCNs other than traditional video advertising revenue. Branded entertainment deals, large-scale video production contracts and content licensing agreements are now commonplace for many MCNs. We can count on new innovation to continue as the battle for market share rages on.

MCN Mergers and Acquisitions

The GHJ 2015 whitepaper looked at industry M&A, and 50 percent of survey respondents feel that industry companies are using acquisition as their primary growth strategy, reflecting a powerful need for new and unique content to drive growth. Several MCNs have been absorbed into larger corporations. In order to build its digital and video platforms, Disney bought Maker Studios in 2014, RTL Group brought on StyleHaul and Warner Brothers invested in Machinima.

Larger companies are also creating MCNs rather than acquiring them. For example, Univision recently decided to build its own MCN of content creators from platforms such as YouTube and Vine. The new Univision Creator Network is also an effort to build Univision Communications’ connection with bilingual millennials or “Billennials.”

The Rise of Programmatic Content

Just as SVOD channels like Netflix, Amazon Prime, Hulu, etc. are diversifying by creating web series that complement and promote their programming or a sponsor’s product, programmatic content is increasing on digital platforms such as YouTube. Consequently, MCNs are increasing their footprint in this arena. A great example can be found on StyleHaul’s YouTube channel where Maybelline is sponsoring Vanity, a new web series.

Another example is DanceOn, which partners with artists and sponsors on shows like Dance Showdown and their current NOOK sweepstakes. Also, Mitú and Discovery are teaming to produce original programming that will air on Discovery en Español and Discovery Familia.

Programmatic content is a key area to track. The growth and popularity of original programming in just the past few years has been huge, and the GHJ survey respondents clearly felt this will continue, predicting that SVOD will get the most funding for online video content three years from now.


YouTube’s sheer size and proven history make it an almost prohibitive industry leader, for the time being at least. When a competitor figures out a more attractive system, however, the playing field will most probably even out a bit. The 2015 StreamCon NYC convention reflected this, with major sessions centering around MCNs starting to move beyond YouTube as their primary distribution platform. In the meantime, YouTube isn’t going away any time soon — in a recent Tech Times article, CEO Susan Wojcicki says YouTube continues to grow, with a 50 percent year-over-year growth in user base for the last few years.

About Dan Landes (Manager, GHJ)

Dan Landes is a Manager within the Firm’s Audit Practice and is a co-author of our 2015 whitepaper, New Media Trends: Consolidating to Meet Consumer Demands. Dan has more than eight years of public accounting experience and is a manager and provides accounting, auditing and general business consulting to a wide variety of companies and organizations that span multiple industries within the greater Los Angeles area, specifically within the media and entertainment industry.

Dan has been a guest lecturer at the UCLA Anderson School of Management, teaching Revenue Recognition. He also led a film production accounting seminar at California State University, Northridge. In addition to guest lecturing at universities, Dan also leads the Firm’s recruiting efforts at the University of California, Santa Barbara, is actively involved in the Firm’s Mentoring Program, and has led various Firm trainings such as Financial Statement Preparation and Supervision and Review. Dan is also a member of the 2015 CalCPA Employee Benefit Plan Conference Panel and taught a revenue recognition segment of at the 2015 CalCPA Entertainment Conference.

Dan graduated from the University of California, Santa Barbara where he received a Bachelor of Arts in Business Economics with a special emphasis in Accounting. After graduation, he worked at Pricewaterhouse Coopers within their Consumer Products Auditing Practice and joined the GHJ Audit Practice in 2009.

Landes Dan Website

Dan Landes

Dan Landes, CPA, has more than 15 years of public accounting experience and leads GHJ’s Technical Consulting Group over revenue recognition and the application of the recent changes to the revenue recognition guidance. Dan also leads GHJ’s Media and Advertising Practice and is an expert in the…Learn More