Factors Shaping Multichannel Network Strategy

By , June 24, 2015

A multichannel network (MCN) is an entity that aggregates multiple online video channels and provides assistance in funding, promotion, partner management, digital rights management, monetization, and audience development. Channels are often branded in a multichannel network to provide a consistent cross-channel user experience, similar to how television channels are branded under the same network family. MCNs can present themselves on a video hosting site with easy access to individual channels, or they present themselves on a web page with links to individual channels through a video hosting site. Multichannel networks operate in numerous ways to provide value to both viewers and their partners:

Current multichannel network strategy is shaped by several factors:

Aggressive acquisition – Currently, the MCN industry is in the midst of a “land grab,” with networks acquiring a high volume of partner channels. The vast majority of acquisitions by MCNs are unlikely to generate appreciable viewership for the network.
Platform availability – Some multichannel networks offer video on different platforms, including access via web, mobile devices, and streaming media devices. While some networks, like Discovery Digital Networks, offer their own apps on devices, most large MCNs have focused on video sharing platforms, including YouTube and Dailymotion.
Niche audiences – Traditional television advertising relies on a limited set of demographics like age to market mass audiences to advertisers. With digital video, providers can mine data beyond basic demographics, like preferences, viewing history, and social media, to push targeted advertising to the viewer. In addition, the hyper-targeted nature of online video allows niche content and ads to feasibly reach niche audiences.
Investment by traditional players – The MCN phenomenon has not been ignored by traditional players in the content space. Many content companies and video service providers have invested in or acquired ownership in one or more MCNs.

Parks Associates outlines the current landscape of the Internet video market in the industry report Webisodes and Multichannel Networks: Future Content Opportunities. Click here to learn more.

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