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YouTube Stars Fight Back 

Machinima and Maker Studios, two of YouTube's most high-profile networks, have come under fire from their own talent

Thursday, Jan 10 2013
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The video titled "Thank you, I will miss you guys" is barely more than a minute long — all one shaky, handheld shot trained on the face of then–21-year-old Ben Vacas.

Vacas, known online as Braindeadly, has big brown eyes, a fauxhawk, a stubbly goatee and a British accent, discernible as he tells his 40,000 YouTube subscribers goodbye.

"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.

click to flip through (6) Machinima has attracted millions in capital by appealing to so-called "lost boys,"untouched by traditional advertising.
  • Machinima has attracted millions in capital by appealing to so-called "lost boys,"untouched by traditional advertising.
 

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"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," he says quietly.

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."

Vacas gained prominence online as a top-ranked hunter in World of Warcraft, a video game he has played for more than seven years. He began making YouTube videos last year, mostly of him joking around with other players and commenting on World of Warcraft and other games.

It wasn't long before Machinima, a multichannel YouTube network that specializes in video game content, came calling. The network offered him a partnership: It would put ads on his videos, and he would get a cut of the revenue generated from those ads. It sounded pretty good to Vacas, and in November 2011 he signed a contract with the company.

But the devil was in the details: After signing with Machinima, he learned that the company would own the rights to whatever videos he posts on YouTube for the rest of his life and beyond, "in perpetuity, throughout the universe, in all forms of media now known or hereafter devised." Not only that, but his contract with the network was open-ended. There was no point at which it was set to expire.

Over the last two years, YouTube has quietly transformed from the province of amateurs to an increasingly cutthroat ecosystem where everyone — stars, networks, advertisers — is competing for views, viewers and view time.

Big money is at stake. That's because YouTube, with the backing of its parent company, Google, is pouring hundreds of millions of dollars into a campaign to compete with traditional television — and it's betting that multichannel networks like Machinima will be the key to its success.

Armed with venture capital, these networks are scooping up talent, offering young creators modest compensation in return for the ability to sell ads on their videos. The more channels a network can bring under its umbrella, the more eyeballs it can promise advertisers, and the richer it becomes.

But a recent string of high-profile disputes is prompting comparisons between YouTube networks and the exploitative Hollywood studios of the 1930s and '40s: Both convinced young and naive talent with little leverage to sign contracts that leave them at a disadvantage. For networks, that means contracts that bind creators to them indefinitely, demand rights to their content in perpetuity and take large ownership stakes in any resulting businesses.

Internet and intellectual-property lawyers say that a rash of public disputes between networks and their talent suggests a serious problem in the emerging industry. Although two of the largest networks, Machinima and Maker Studios — both based in L.A., both darlings of venture capitalists — have been accused of some of the worst practices, investors remain undeterred.

In November, while Maker Studios was in the middle of a public dispute with its highest-profile star, Time Warner was raising $36 million in venture-capital funds on behalf of the network. In May, just weeks after Ben Vacas posted his emotional video, Machinima closed a round of fundraising, led by Google, worth $35 million.

The question, then, is: Can networks like Machinima and Maker sustain their rapid growth if the creators on whose backs they built their businesses revolt?

"I'd always wanted to be a filmmaker," says Hugh Hancock, the man generally acknowledged as the godfather of the art form "machinima," when reached by phone at his home in Edinburgh, Scotland. "The issue was, back then in 1996, it was before the digital video revolution, it was before 3-D animation was in any way affordable, so I'd always given it up as a pipe dream."

Everything changed with the release of Quake in June 1996.

The 28-level, first-person-shooter game was one of the first games in which developers opened up the video game's code and gave it to players — saying, in effect, make your own games with this technology. Players could repurpose Quake's characters and settings to create original stories, then render them in 3-D animation.

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