The last time Music Ally saw Courtney Holt, he was being interviewed on-stage at MidemNet 2009 in his role as president of MySpace Music.
Two years later, he joined YouTube multi-channel network Maker Studios as COO, and has remained there since. Multi-channel networks (MCNs for short) weren’t really on the music industry’s radar in 2011, although that’s changing.
Why? Partly because the industry is realising just how popular some of the musicians on these networks are, and partly because of high-profile licensing deals signed in February by Maker Studios and rival Fullscreen Media with Universal Music Publishing Group.
(Yes, parts of the industry are just realising that these MCNs weren’t already covered by licensing deals, which we’ll get to a bit later on.)
Holt has a long history in the music industry, starting as director of video production for Atlantic Records, then moving through roles as head of new media for A&M Records; SVP of new media and strategic marketing at Interscope Geffen A&M; EVP of digital strategy, music and media at MTV Networks; and then MySpace Music.
“My original goal was never to work in the music business. I have a film degree, and was always looking to be in the film business,” he says. “Even at MTV, my main goal was consumer-focused video. In that sense, Maker Studios is the culmination of a lot of work I’ve done historically.”
MCNs are fascinating entities, part TV networks running lots of individual channels on YouTube and cross-promoting between them, and part talent agencies spotting and developing musicians, presenters, comedians and other on-screen talent.
“Music is one of our four core verticals, but in our world, music also blends into other types of genres,” says Holt. As an example, he cites its Epic Rap Battles of History channel, which blends music and comedy, and has 4.5m subscribers and 534m total video views.
Maker Studios works with established musicians as well as new talent – it signed up Snoop Dogg’s WestFestTV channel in June 2012 for example – but the boundaries blur here too. “His show is primarily comedy and news and entertainment,” notes Holt.
“The conversation started last year at Coachella. Snoop had been making videos on YouTube, but he didn’t have a strategy. I knew it was in his DNA to have a longer-view sustainable programme, exposing him to an emerging media platform that would allow him to have a direct consumer relationship.”
Schedules and shows
Whether for big names like Snoop Dogg or emerging musicians, the key to working with an MCN is about order rather than chaos: releasing shows regularly, often to a TV-like schedule, and really responding to YouTube data and feedback from viewers to refine the content.
“This is the new model: it’s how committed you are that’s important,” says Holt, who adds that Maker fields lots of interest from “traditional entertainment people”, whose expectations of YouTube success may need diplomatic correction.
“One thing that’s consistent for everybody that works with us – whether they’re an established or emerging creator, is that they’re committed to this like it’s a full-time job,” says Holt.
“When you publish, how often you publish and how you leverage your social networks… There is a skill to this. It’s not luck! You can have a viral video, but that’s an accident. Our business can’t be rooted in accidents. We’re looking for sustainable success.”
Maker’s YouTube network of over 15k channels currently has more than 200m subscribers and racks up more than 2.9bn views a month, with 70% of the audience aged 13-34, and 40% accessing it from mobile devices.
“We have talent that gets over 100m views a month on average,” says Holt. “If you look at the reach someone like Snoop can get, he could have appeared on every late-night talk show in the US for a month, and not reached 40m people.” Something achieved partly through Snoop’s collaboration with the Epic Rap Battles team.
This, in a nutshell, is the potential of MCNs, and why they should be even more on the radar of the music industry. Young, tech-savvy people who may not be watching as much traditional TV, but who are watching channels produced by MCNs like Maker, Fullscreen, Machinima, The Collective, ChannelFlip and others.
“The audience has made a decision. They’re consuming content differently, and the influencers they are connecting to are different to who you and I historically believed to be influenced,” says Holt.
“They’re getting music tastes, fashion tastes and discovering new programming through a different mechanism than professionally-curated programming. But make no mistake: this is not user-generated content. This is programming. And we are seeing the rise of formats, seasons and professionally-produced programmes made for this audience.”
Label-like functions
So, a company like Maker Studios, with music as one of its verticals, has a number of musicians on its books with their own channels. They’re making videos/shows, reaching millions of people, and making this their career.
Interestingly, the company is exploring some traditional functions of what management or labels might do for artists: setting up package tours, and even planning the release of a compilation album of Maker artists later this year.
“Well, whatever an album is in 2013. We are going to have artists that are releasing a collection of songs at a moment in time, and creating a marketing campaign to create awareness and focus to those songs at that moment in time,” says Holt.
“We are playing around with the notion of what a packaged music release is.”
It’s intriguing. Holt talks about breaking down the traditional functions of a music label into those that are “rentable” and those which are not, noting that an MCN can provide capital for emerging artists, recording facilities, merchandise services…
“We have resources we can provide to an artist to grow their business, and we have a flexible deal structure to provide them in exchange for rights on a fair and equitable basis, similar to what a record deal could be,” says Holt.
He admits that other things – relationships with retailers, radio and press for example – aren’t in an MCN’s core skillset, but suggests that they can be brought in from outside (the rise of ‘label-services’ companies or divisions of existing labels suggests he’s right on this score), if they matter enough.
“Some of these things we value, but some of these things don’t have value. If an artist can generate 10m-20m views a month on YouTube, what’s the value of getting them mentioned in a music magazine?” says Holt.
“I’m not anti-label. Certain talent requires the infrastructure of a traditional label. The work-ethic of the talent we work with is… a little different to what I was historically used to!”
Hard work
Holt adds that this can be the biggest shock for artists who’ve recently fallen out of a record deal, and come to a company like Maker Studios to explore the possibilities of working with an MCN.
“When I explain what’s required, they say ‘Oh my god! I have to do a lot of the work…’, but you have to compete with the work ethic of the people who’ve grown up with this,” he says.
“This is a continuum that started with MySpace right at the beginning. The artist needed to put the work in to get that direct consumer connection. People like Will.I.Am and Rivers Cuomo were building the pages themselves, and were on there having the conversation.”
His theory: a market of middlemen quickly emerged to run artists’ MySpace pages for them – something that’s continued through to modern social networks like Facebook and Twitter, even if there are plenty of artists tweeting for themselves in the latter case.
“On YouTube, you can play a character if you want, but it’s still you. That authenticity has to be recognised, and it’s sometimes hard for some artists who don’t want to be that real with their audience. But when you are, it does resonate, and there are artists using that smartly.”
This kind of talk tends to raise hackles in the creative community, if it seems to be saying every artist must be on social networks every day, must be opening up their lives to fans, and must be doing lots of this stuff themselves rather than leaving it to other people in order to concentrate on making music.
That’s not what Holt seemed to be saying, though. Rather than suggesting artists who just want to focus on their music can’t survive, he’s more saying that they’re not well suited for the MCN model – which in turn he’s not claiming is the replacement to labels, more an alternative.
Licensing questions
About those licensing deals, then. The month after Maker and Fullscreen’s UMPG deals, Billboard published an op-ed piece from SONGS Music Publishing CEO (and NMPA/ASCAP board member) Matt Pincus, who had some stiff criticisms for MCNs.
“How good have MCNs been about getting licenses for the music they broadcast on YouTube? In a word: abysmal. Maker Studios signed a deal with only one major music publisher two weeks ago. It has been in business for over 4 years, building huge audiences streaming acapella videos,” wrote Pincus
It’s a touchy subject, because it’s true that a lot of emerging artists on MCNs record cover versions of popular songs. Pincus’ complaint was that because MCNs sit within YouTube’s Partner Program, they’re not covered by the video service’s licensing deals – they’re expected to clear their own rights. And haven’t.
Holt declines to address Pincus directly, although he says Maker is open to licensing discussions with more rightsholders, especially if those negotiations can encompass ideas for original formats and programming as well as royalties for covers.
He talks up the UMPG agreement as a step forward on that score. “We have artists that want to celebrate the music they love, and so we wanted to create a mechanism for that. We also wanted to work with the publishers to collaborate with them on programming opportunities,” he says.
In fact, Holt’s pitch to music publishers is that they have a problem – young people being less connected to catalogue classics – that MCNs might be in a good position to help solve.
“There’s a lack of knowledge that there’s a history there, but I believe we have a responsibility to make sure the new generation of music fans are connected to the generation that came before,” he says.
“If my son is listening to The Stooges or The Clash, I feel it’s making a connection to music that means a lot to me. So there’s a lot we’re going to do to play around with the music catalogue programmatically, as a result of these deals.”
Moving forward
It’s not a simple heroes and villains debate. Publishers are right to wonder why they’re not getting paid when a musician signed to an MCN gets millions or tens of millions of YouTube views for a cover of one of their songs. Yet Holt is right to suggest that there is scope for deeper collaboration between rightsholders and MCNs.
A lot depends on how willing the latter really are to strike licensing deals, and whether the revenues they’re making from YouTube will enable them to cover those royalty costs.
Earlier this year, one report suggested that MCNs were finding YouTube ad revenue-shares less lucrative than they had hoped thank to “a glut of inventory” on the service, for example. An interesting time for publishers to hove into view looking for their slice of the pie.
Private negotiations (and the odd public spat) will continue, but the bigger picture for artists, managers and labels is that understanding what MCNs do, how they work and how their businesses should be high on the To-Dos list for 2013.
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