Gamer Channel Machinima Offers New Model for YouTube's Premium Strategy

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Machinima may just be the largest TV network you've never heard of -- only it's not technically on TV. Rather, Machinima is a YouTube channel and studio that caters to video gamers, offering up how-to clips, additional footage and user-generated films for both niche titles and top franchises such as "Call of Duty" and "Halo."

It's also viewed as the model for YouTube's forthcoming premium-content strategy. The Google site is expected to team up with best-in-breed partners to produce original content in vertical categories ranging from sports to cooking to video games, with programming help from the team at recent acquisition Next New Networks, another "neo-studio" with a loyal subscriber base, not unlike Machinima. If YouTube is the Comcast or DirecTV of the web, then Machinima wants to be its MTV.

"Because of their consistent traffic they can offer advertisers a very unique package," said Kenji Arai, strategic partnership development manager at YouTube. "Hopefully we will create other standout partners like Machinima in other categories as well. It'll take a combination of both companies that combines a comfortable niche and a part that really engages on the YouTube platform like Machinima does."

'Mortal Kombat: Legacy'
'Mortal Kombat: Legacy' Credit: Warner Bros. Entertainment/Machinima

Its users are predominantly young males with a penchant for social media and user-generated video production (Machinima takes its name from a type of 3-D animation). It also comes equipped with audience numbers that rival most top-tier cable networks. Machinima's YouTube channel logged 67 million unique viewers in March. In April it launched an original series, Warner Bros. Digital's "Mortal Kombat: Legacy," which was seen by more than 5 million viewers in its first five days of release -- comparable to a top-rated show on TNT or USA. "Bite Me," another original series, has racked up more than 13 million views since premiering last December, generating millions of impressions for co-sponsors Microsoft and Capcom.

Not surprisingly, many of Hollywood's top agents and producers and, increasingly, Madison Avenue are looking to the studio. "Media companies can be and are being built in nontraditional ways. At what point does Machinima rival, equal or surpass a cable network?" said Tim Hanlon, CEO of Velociter, the strategic partnership and investment arm of Interpublic Group's Mediabrands. "These gigantic numbers suggest their distribution model is just beginning."

For the full story on YouTube's Machinima Gamer Channel, go to Adage.com.

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