What's Next in TV: Machinima, The No.1 Entertainment Network on YouTube

Video content is one of the fastest growing categories online. Television networks are scrambling to keep up, because the success stories so far have been smaller entities creating highly targeted and Web native content. The most successful video content producer right now is a company called Machinima, currently in the middle of an investment round that will include money from YouTube parent company Google. Machinima (its name is a combination of the words 'machine' and 'cinema') is a "video entertainment network for video gamers," specifically targeted at the 18 – 34 year old male demographic.

This is the first in a series of posts we're calling 'What's Next in TV.'

Machinima's main distribution point is its YouTube channel, where it has 109 million subscribers and gets more than a billion views a month. In fact, Machinima is now the number one non-music channel on YouTube. As YouTube looks to compete with the big television networks, like CBS and NBC, it needs successful content producers like Machinima. 

While exact comparisons are difficult, you can think of Machinima as a specialist video network in the same way that MTV was a music-focused TV network in the 1980s. That's precisely how Machinima co-founder and CEO Allen Debevoise describes his company: "MTV was born in the notion of a video format that related to music. In the same way, Machinima is a video format that relates to core gaming."

According to comScore's March 2012 U.S. Online Video Rankings, Machinima is the third biggest YouTube partner site - after music video providers VEVO and Warner Music. But Machinima has the highest engagement, at 69 minutes per viewer per month. That's an increase of 5 minutes from December. Engagement, meaning that users keep coming back to the site and spend time there, is the golden metric these days. Just ask the biggest beneficiary of user engagement on the Web: Facebook.

YouTube is by far Machinima's main "distribution platform," but its tentacles are spread elsewhere too. It's on Facebook (via a series of 'Pages' such as this one for gameplay), Twitter (with four Twitter accounts), mobile devices (apps for iPhone, iPad, Android phones and Windows Phone 7) and Internet TV devices (Boxee, Roku and Samsung).

Machinima has various types of video content. One is news and reviews, an example of which is a daily gaming news show called IGDaily. It's a fast-moving 6-7 minute roundup of news of the day in the gaming world, hosted by two wise-cracking, chuckling male gamers. The highlight today was a new Star Wars game starring Boba Fett.

Another type of Machinima video content is original programming, similar to the shows you'd find on CBS (or maybe on the Disney Channel). The latest is a drama series called Bite Me. Every Friday, a new 10-15 minute episode is released. The premise of the show is three gamers "in the midst of a real life zombie outbreak." There is an interactive component to Bite Me, in the form of clickable pop-ups.

The opening episode of Season 2 of Bite Me, in March of this year, has been watched nearly 1.5 million times so far. That's less than half the 3.5 million viewers who tuned in to episode 1 of Mad Men series 5 on TV, also in March. But remember that Machinima has a narrower target audience: males 18-34. 1.5 million views in that context is very valuable to advertisers who want to reach that demographic. Plus, Machinima has proven that it can get the big numbers: its most successful original series so far has been Mortal Kombat: Legacy, which finished last year and attracted 4-6 million views per episode.

Machinima also features a variety of resource type content, such as short "gameplay" videos with gaming tips and tricks. Much of this comes from around 4,200 partners, amateurs and semi-professionals who produce videos for Machinima.

However, there has been controversy about the restrictive contracts offered to producers of semi-professional content. Just today, a Reddit thread about an unhappy video producer attracted unwanted attention (and many YouTube dislikes).

Problems with partner contracts can - and should - be easily fixed by Machinima. Regardless, it has built an incredible success story on the back of YouTube. Television networks will be watching closely, because this is probably what the future of TV resembles. Interactive videos, on demand. Shorter, more narrowly targeted content.

There will of course still be a place for the Mad Mens of the TV world, but the type of content that Machinima is producing will be the next big area of opportunity for TV networks... and YouTube, which wants to be one.