Will TikTok Lead to the Rebirth of Multi-Channel Networks?

 In the early 2010s, traditional marketing companies were rushing to invest in Multi-Channel Networks (aka MCNs). Multi-Channel Networks functioned in a similar capacity to talent networks- signing new YouTube stars, connecting them to brands, and helping them monetize at scale. YouTube was considered the next big platform amongst Millenials and traditional companies had struggled to create platform-specific content. Companies like Viacom and Disney were rushing to purchase companies such as AwesomenessTV and Maker Studios. But, the MCN model wasn't built to last and in 2019 Disney indicated that they view Maker as basically worthless in their 10k. 

This rapid decline happened for a couple of reasons the main one being that MCN's had basically morphed into multi-platform production companies and were focused on signing YouTube stars at a massive scale and pooling the meager profit from their portion of the advertising cut. YouTube would send the money to the MCNs and then they would take their cut before distributing the money to their creators. The problem with this model is that many MCNs were portraying the total sum of money from YT as their cut instead of the percentage that we were keeping after sending the money to creators. On paper this made it seem like they were much more profitable than they actually were creating an unsustainable business model and a mad dash for potential investors. A former Maker exec who joined the company following the acquisition said this on Disney's $675 Million acquisition of Makers studio, “I was excited to be there — I thought it was going to be the next big thing, but when you started to poke around, it was obvious there wasn’t much there." 

As TikTok stars race for brand deals and monetization there is a window for a new form of MCN's to rise again. Creators will need teams of people who can help sell their channels to companies and figure out the best way to price their campaigns and companies might want a one-stop-shop in terms of reaching creators. One positive sign that MCNs might not re-emerge is that many TikTok stars have begun to be signed to talent and modeling agencies cutting out the middleman. Getting creator monetization to scale will be important for making sure that TikTok is here to stay as a platform as they an incentive for its creators to stay.