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Machimina CEO Search Hints At MCN’s Future

on Thursday, Jan. 23rd

In the world of online video few brands are more recognizable than Machinima, the multi-channel network that regularly boasts of over 2 billion video views served up each month. Their core demographic: the much-coveted 18-34 year old male.

Even so, 2013 was a rough year for Machinima, they cut roughly 11% of their core workforce. Co-founder Allen DeBevoise announced that he was stepping down as CEO last November, and the search has been on since.

Now Tubefilter is reporting that former Shine America CEO “Emiliano Calemzuk is on the very short list to become DeBevoise’s replacement.”

The Argentinian-born executive came to run the American division of Shine Group – the production company behind super hits like The Office, Ugly Betty, and The Biggest Loser – by way of Fox, where he had a very successful, 15-or-so-years-long career and rose as high as the position of President of Fox Television Studios.

If there was ever a signal as to which way the productions winds blow for Machinima this rumor would be it.

While Machinima has built its audience base thanks to user-generated content deals the tension between “affiliated” creators and the network have been growing for months.

Adding to this pressure is the very nature of business-as-usual with YouTube video promotions coming under closer scrutiny thanks to revelations that some content creators were paid to promote certain brands without clear disclosure.

Microsoft went so far as to throw Machinima under the bus when these practices were linked to an XboxOne campaign (via Polygon):

“As part of this campaign, Microsoft advertising dollars on Machinima were specifically for banner and pre-roll media placements,” according to the Microsoft spokesperson. “The additional video content creation was provided by Machinima as a value-add program. Microsoft was not aware of the terms and requirements that Machinima has in place with its content providers.” (Emphasis added.)

Ouch.

To be fair to Machinima: some variation of this is how much of YouTube “integrated marketing” works. Brands are connected to creators by way to the MCNs so that their products are featured in videos. This method means fewer middlemen: YouTube doesn’t have a way of taking a cut. In fact, YouTube’s relatively large percentage of pre-roll and banner advertising sets up an incentive for creators and MCNs to pursue these kinds of deals.

What gets left out are the disclosures. As Polygon’s Brian Crecente reports the Federal Trade Commission offers up guidelines on disclosures, not red-lined laws.

Dive into the wide world of YouTube and anything from a video game “Let’s Play” to a makeup review might actually be receiving financial support from the product under consideration. That fact might only pop up in the text description on the YouTube page itself, and not be mentioned in the video proper.

All perfectly legal, and ethically hazy.

Which raises the question: how long can this practice last before consumers get sick of it? If you can’t trust AutoBob19318 to be objective about boozy popsicles who can you trust?

That leads us back to the pivot Machinima appears to be destined for. Calemzuk is from the world of television, both scripted and unscripted. Machinima already puts a lot of effort into partnering with major studios as a distribution network for first looks (Black Sails) and genre content (Mortal Kombat: Legacy). A figure like Calemzuk at the helm would likely lead the network farther down that path, towards a model that shied away from the issues associated with affiliate programs.

Know this: Machinima won’t be the only MCN to face some existential questions in the coming months.

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