
“They stole $1.7M” – content creators, MCNs, and business on YouTube - kibwen
https://www.youtube.com/watch?v=ACNhHTqIVqk
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kibwen
Summary: because of YouTube's broken copyright enforcement system, the only
practical way for channels to monetize while guarding against spurious
copyright claims is by signing with a multi-channel network, or MCN. Once
done, YouTube delivers a channel's revenue to the MCN, who is responsible for
taking their cut (10-20%) and then transferring the rest to the channel
owners. One could imagine that this would be equivalent to a system where
YouTube paid channels directly and channels were then responsible for paying
MCNs for their service, however, a property of the former model is that it
allows MCNs to claim the full value of each channel's revenue as their own
revenue on their balance sheets, which is then used to mislead stupid
investors (such as, the video alleges, Disney) as to the effective revenue of
the business, even going so far as to delay payment to channels in order to
inflate their cash-on-hand for important reporting milestones. One such MCN,
Defy Media, folded without warning and without disbursing revenue to 50 of its
channels, and this YouTube channel is attempting to raise awareness in attempt
to see that the money that was merely in transit from YouTube to the channels
by way of Defy's bank account is paid out the channels before the normal
hierarchy of creditors start splitting it up (or failing that, warning other
channels about what they should look out for when signing deals with MCNs).

