MCNs work hard to keep viewers on their creators’ channels to keep money flowing to their advertisers, their creators and, of course, themselves. But they’re not all benevolent giants looking out for their creators’ best interests.
Is your YouTube channel ready to join a Multi-channel Network (MCN)? If you get involved with a good MCN, you’ll be free to create your content without worrying about all the left-brain stuff that the network’s people are paid to do. But as great as that may sound, there are risks to joining an MCN. Make sure to do your research before you sign up and know your rights if you end up unsatisfied.
Before You Sign
“I‘ve been offered a great contract by a top MCN! This could be my ticket to fame and fortune!” True — but it could also be your ticket to a lifetime of indentured servitude. Before you even consider signing that bottom line, read over the contract as thoroughly as you can. Look for words and phrases such as “in perpetuity” and “indefinitely.” Be certain that the effective dates of the contract are clearly spelled out and that there are bilateral provisions for renewals. Also make sure that you have easy access to the people who can help you if you have questions.
Even if everything looks on the up-and-up to you, remember: you don’t speak legalese. Before you sign any contract, hire a contract lawyer to read it. This advice can’t be stressed enough. Always keep in mind, the person who wrote that contract was looking out for their own best interests, whereas the lawyer you hire will be the one looking out for yours. Binding contracts are something that you should never take lightly.
Take the advice that your attorney offers; don’t think “oh, they wouldn’t do that.” If they wouldn’t, they also wouldn’t be making you sign a bad contract. Your attorney can also advise you on what is expected of you under the terms of your contract and what you can expect to get paid.
Multiple MCNs have been known to include language in their contracts that make it extremely difficult and/or expensive for a content provider to leave.
Perhaps most important, talk to your attorney about an “out” clause. Multiple MCNs have been known to include language in their contracts that make it extremely difficult and/or expensive for a content provider to leave. Even if the contract works perfectly for you now, that may not be the case in the future, and if it’s a long-term contract — as many are — that should be a major concern. There are numerous reasons you may want to get out of your contract. For instance:
• If your MCN gets so many clients that you get lost in the mix
• If they get bought out by a corporation that doesn’t give you the placement you deserve
• A lack of transparency in your business dealings with your MCN
• If an offer comes down the pike that suits you better
• If you feel it’s time to get out of the YouTube biz or change the type of content that you want to create
Businesses change strategies all the time, and you don’t want to get stuck in a contract that no longer works for you. If your contract includes a way out for you — usually involving a 30- or 60-day notice to your MCN — then there shouldn’t be any problem getting out of it. However, if you didn’t get that written into your contract, you may have a problem and will more than likely need to consult an attorney.
Disputes and Existing Contracts
Be proactive in your dealings with MCNs so that you don’t sign a bad contract. However, if you’ve already signed a contract with a multi-channel network, it may be a good idea to take it to your attorney and see what your rights are if you do have issues in the future.
If you’re in dispute with your network, the most important thing you can do other than hire a dependable lawyer is to continue to uphold your end of the contract, even if the MCN isn’t doing the same. If you end up in court — and that’s a real possibility if you signed a bad contract — the judge will take your honesty and good faith into consideration when making decisions.
The bottom line is that it’s very difficult to back out of a contract you’ve already agreed to, so make sure you know exactly what to expect from your MCN, and what they expect from you. The results of a contract dispute will be case specific and depend on your particular contract.
Learning from Others
Even the largest MCNs have current and former content creators claiming that they were coerced into signing bad contracts, and there have been multiple lawsuits over these contracts. The biggest and most well-known dispute is that between YouTube creator Ray William Johnson and Maker Studios. Johnson was Maker Studios’ biggest draw and was the first YouTuber to hit five million subs. Seeing the success of its number one star and wanting to capitalize on him even further, Maker Studios, according to Johnson, attempted to pressure him to sign a new contract that limited his access to his AdSense account and would reportedly take 40% of his earnings. The contract also would have required Johnson to give up 50% of his intellectual property rights to the show and his other animated web project, Your Favorite Martian. You can read Johnson’s side of the story, along with PDFs of contract offers and emails here.
More than a year later, months after his contract had expired, Johnson claimed that Maker still had not returned the AdSense money that belonged to him.
Another big legal dispute involves the gaming MCN Machinima, which deals with a lot of very young YouTubers. Machinima, which has come under FTC scrutiny over its supposed deceptive practices and has been accused of taking advantage of the youth and naiveté of its partners by having them sign contracts with indefinite terms. This was first brought to light in 2013 by former YouTuber Ben Vacas, aka Braindeadly, who quit YouTube over his contract with Machinima. In his final video, Vacas stated, “I woke up today hoping to make a video, but I went into a call with Machinima this evening and they said that my contract is completely enforceable. I can’t get out of it,” Vacas tells the camera. “They said I am with them for the rest of my life — that I am with them forever.
“If I’m locked down to Machinima for the rest of my life and I’ve got no freedom, then I don’t want to make videos anymore.” The screen fades to black.
The video closes with a written message: “I’m really sorry guys, but I am completely powerless. If this is the last thing I say, please don’t make the same mistake as I did and always read before you sign something.”
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