European MCNs: The Dawn of a New Era?

/ Jan 30, 2015


By Pierre Ziemniak

Did you know the most popular YouTube channel in the world is not US-based?

The US may lead the online video race with no less than 62 channels in the top 100 most-subscribed YouTube channels in the world; PewDiePie’s hilarious comments on video games topped the list again in 2014, with 4.1 billion video views. When it comes to multi-channel networks, however, US-based companies take the lion’s share of views and subscribers. So, what are the biggest European MCNs nowadays? Is the ‘Old Continent’ even ready — if not to say willing — to give birth to online players able to compete with Maker Studios, BuzzFeed, and other giants?

The lack of an official and clear ranking of Europe’s leading MCNs all but shows the huge cultural gap between Silicon Valley’s champions and our local scene. Moreover, the number of MCNs here keeps… decreasing! As New Media Rockstars notes, we’re witnessing a  “growing trend of consolidation in the world of MCNs.” But this doesn’t mean we can’t draw a list of Europe’s most important MCNs – no ranking here!

After securing impressive rounds of venture capital in recent years, UK-based Base79 is sometimes quoted as the Base79(480x400)largest MCN in EMEA, and gathers over 300 premium content partners on 550 YouTube channels, including BBC Worldwide, Endemol’s Tiger Aspect, IMG Media, Simon Cowell’s SyCo, Ministry of Sound, Guinness World Records. Base79 was acquired last summer by its UK-based rival Rightster, making the latter the fourth-largest multi-channel network in the North America and the largest operating outside of the United States.” The conclusion of this success story? MCNs need more money than ever to expand to new territories and further develop original content – that is, at least, what Base79 stated at the time of these funding rounds.

But the biggest European MCN might just be another player entirely. Zoomin.TV – which continued its geographical expansion last year, opening an office in London – considers itself Europe’s largest online video producer and YouTube MCN, creating “bespoke packages of high-quality video content across a wide range of ZoominTVcategories including News, Entertainment, Sport, Music, Fashion, Games, and many more.” In 2014, it produced 400 news videos per day, in 14 languages.

Again, competition is rife, which makes it even harder to distinguish between a so-called European leader and its contenders: German broadcast group ProSiebenSat.1, for instance, is also aiming to become Europe’s number one MCN. Not to mention Endemol Beyond, the digital arm of Dutch-based TV production firm Endemol, which intends to build a premium network of channels on major online video services, with the help of YouTube stars like Michelle Phan, who runs the biggest beauty and makeup channel there.

ProSiebenSat’s move notably underlines a key trend: European media groups’ willingness to expand online via MCN acquisitions. These are similar types of investments to those occurring in the US in recent years, with some impressive deals in 2014.

Is Europe late in this race to merge traditional and “new” media? Probably, but times are changing. In 2013, major fremantlemediaEuropean TV producer and distributor FremantleMedia announced a strategic partnership with Divimove, the second-largest MCN in Germany, which now has 1,700 partners and 80 million subscribers. Divimove has improved its offerings in a number of key categories, including a talent management division.

Interestingly enough, FremantleMedia is a subsidiary of Bertelsmann’s RTL Group, which is investing millions in MCNs as well, starting with BroadbandTV – a network of more than 7,800 channel partners – in 2013; then in YouTube’s lifestyle network StyleHaul in 2014, thus adding 5,000 content creators to its already impressive talent list; and finally in SpotXchange, a Denver-based provider of programmatic video advertising services. It’s hard not to see the signs of a long-term, corporate strategy here, but the same question remains: are all major European TV companies planning to become online video giants, or are these just pioneers in a still very traditional media landscape?

From a creator’s perspective, this new kind of competition between leading media groups is very good news, as it broadens MCNs’ reach in terms of territories and communities. As Divimove’s CEO Brian Ruhe explains, an online Divimovevideo network shouldn’t limit itself to its country of origin:

“In our opinion geographical origin of a MCN is not one of the main factors when looking at MCNs from a creator’s perspective. The competition amongst MCNs in general is the best thing that could have happened to creators. We, as MCNs, need to show that we really are essential in the online video ecosystem.”

From a media group’s perspective though, the stakes are quite different: they have no choice but to expand digitally, and MCNs embody the perfect investment to be made in this particular field. European deals should thus be analysed through this prism: in the end, long-term strategic motivations are just as high as in other territories – like the US. On a national scale, this explains why French TV giant Canal+ acquired a majority stake in local YouTube channels network Studio Bagel in 2014: the official objective was to create an OTT branch.

The very notion of territory is actually questioned when it comes to MCNs and the wave of acquisitions they currently face – and this is where our focus on Europe reaches its limits. As a PwC study from last summer shows, local deals are now just part of global strategies:

“The MCNs’ potential audiences are now global, and users in emerging markets will play an increasingly central role in driving growth in video views. MCNs should pursue these audiences rather than relying only on the more mature markets of the US and Europe. This will require that they broaden their content offerings to suit local markets around the world, and focus increasingly on pursuing local partnerships.”

In spite of a lack of clear rankings and an ever-changing media landscape, Europe may have some MCN champions, but the real question in 2015 is not “how to make them grow” anymore. It’s more like: “how can they conquer the world?”

This is the first in a series of exclusive posts in partnership with MIPBlog, the year-round industry knowledge platform of MIPTV & MIPCOM. Pierre Ziemniak is MIP Markets’ community manager. Follow him on Twitter here.

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