A Better Network


(from Billboard Magazine, October 19, 2013) Companies in the music industry have started taking advantage of opportunities on various social media platforms.  These companies are reorganizing their business model into a multichannel network, or MCN, on platforms such as YouTube.  They have turned YouTube into a retail space using ads and special software.  One company, The Orchard, who started off as an independent record-distribution shop, has found a way to make YouTube one of its top five digital revenue sources.  Sony/ATV has been testing a program that finds covers of their clients’ songs in order to earn revenue on those videos.

The Orchard has even gone so far as to automatically monetize videos uploaded to its channel using a system called Bulk Automated Claiming for the Orchard Network or BACON.  This system helps the company because most music videos get the majority of their views in the first week of publication.  By using this system the company is able to start earning money right away.  This system has saved the company 250 hours of labor each month because before the system, employees had to manually claim the videos.

Google started their ad-revenue sharing program in 2008, and The Orchard has been a part ever since managing hundreds of channels for their clients.  For some of their clients, YouTube is a top source of revenue, but it has become increasingly difficult to manage channels. This is why several of these companies are hiring more staff.  Not only are they gaining revenue on the ads, but they have their own ads on the channels which has given them the opportunity to use some of the more popular channels to advertise for their other channels.  This is called cross-channel promotion and it has been effective in making The Orchard the sixth largest YouTube partner in the United States with 21.2 million viewers.