Sourcefed, Revision3 and other MCNs — What Went Wrong
Yesterday’s news that Group Nine Media was shutting down Sourcefed Studios was a hard blow, as I led the team that bought Phil DeFranco’s company (which included Sourcefed) back in 2013 when I was at Discovery — who had purchased my previous company, Revision3, the year before.
The news got me thinking about why many of the YouTube multi-channel networks ultimately failed, and what could have been done differently. I’ve been mulling this for a while — hindsight is always 20/20 of course — and if I could change just one thing it would be how we structured business deals with our creators.
In the early days of Revision3, like most Silicon Valley startups we had about 10% of our equity set aside in an ESOP or employee stock option plan, and as CEO I insisted that we gave equity to every employee. Many of our early hires were creators, those in front of the camera, and they got options like everyone else. But as we expanded into an MCN, we began bringing on creators who weren’t employees, but instead were promised a significant cut of our sponsorship sales and in some…
