What happened to Machinima?

Machinima, a portmanteau of machine and cinema, was an American online entertainment network founded by Hugh Hancock in 2000.

The network started as a hub for machinima, a process that involved the use of real-time computer graphics engines to create cinematic animations.

Over time, Machinima branched out into film, comic books, video game culture, and technology content, in addition to articles that promoted machinima as an art form.

Machinima launched a YouTube channel in 2006, where it worked with animators to create cinematic videos for release under its own brand.

However, the channel – which had amassed 12.6 million subscribers – was abruptly shut down in early 2019, with all videos made private.

Machinima itself then ceased operations in February, with 81 employees losing their jobs.

Aspect	Explanation
Founding and Early Success	Machinima was founded in 2000 by Hugh Hancock and Philip DeBevoise. The company’s name is a portmanteau of “machine” and “cinema” and referred to the practice of creating animated films within video games, often using the game’s engine. In its early years, Machinima primarily focused on creating and promoting user-generated content, particularly videos created using video game graphics and assets. The company’s YouTube channel became one of the most popular destinations for gamers, and it played a significant role in popularizing the concept of Machinima as a form of online entertainment.
Growth and Partnerships	Machinima experienced rapid growth and gained recognition for its unique content. It formed partnerships with video game publishers and advertisers to create sponsored content, often featuring game reviews, trailers, and promotional material. The company raised funding rounds to support its expansion and content production. By the mid-2000s, Machinima was a major player in the gaming and online video space, with millions of subscribers and views on its YouTube channel. It was seen as a pioneer in the emerging field of online video content creation.
Challenges and Changes	In the late 2000s and early 2010s, Machinima faced challenges related to changes in the online video landscape and the evolving preferences of its audience. YouTube’s algorithms and policies shifted, impacting the visibility and monetization of content. Additionally, the rise of individual gaming content creators, known as “YouTubers” or “streamers,” began to overshadow the Machinima brand. The company also faced criticism for issues related to content contracts and payments to its network of content creators. These challenges led to a decline in Machinima’s influence and viewership.
Ownership Changes and Reorganization	In 2016, Machinima underwent significant ownership changes and a reorganization. The company was acquired by Warner Bros. Digital Networks, a division of Warner Bros. Entertainment. Under Warner Bros.’ ownership, there were attempts to refocus Machinima as a multiplatform network. However, these efforts did not lead to a resurgence in the brand’s popularity, and many of its original content creators had moved on to other platforms. In early 2019, Warner Bros. officially retired the Machinima brand.
Legacy and Impact	Machinima’s legacy lies in its role as a pioneering force in the online video and gaming content space. It played a crucial role in introducing the concept of using video game assets and engines for storytelling and entertainment. While the Machinima brand itself eventually faded, the practice of creating content within video games, often referred to as “machinima,” continues to be a creative outlet for gamers and content creators. Many former Machinima creators went on to have successful careers as independent YouTubers and streamers.

Table of Contents

Hiring practices

In early 2013, it was reported that Machinima was forcing its creators into life contracts that they could not break.

The contracts, which many creators did not read or even understand, stipulated that Machinima would own the rights to whatever content the creator produced for the rest of their lives.

Many also claim that Machinima promised them a share of YouTube advertising revenue and never delivered. In truth, however, many of these games could not be monetized because they were based on copyrighted material.

The unfavorable contracts caused bad press, which meant new creators avoided Machinima at all costs.

Revenue decreased over time, exacerbated by YouTube favoring individual creators over content networks regarding advertising revenue and exposure.

Acquisitions

Warner Digital Networks acquired Machinima in 2016 in a deal worth just under $100 million.

Warner Digital Networks was acquired by AT&T two years later.

In December 2018, AT&T announced that Machinima would be incorporated into Otter Media, a digital media company and division of WarnerMedia.

Machinima then faded into obscurity as it was absorbed into Fullscreen, another subsidiary of WarnerMedia that offers tools and services to brands and content creators.

At the time, Otter Media announced it would work with what was left of the Machinima team to create new content for distribution over multiple channels shortly.

However, many were confused as to why the YouTube channel was shut down if the content was to be redistributed.

Corporate churn

Some also believe that Machinima was the victim of corporate churn, with the various corporations involved with the platform not understanding the purpose of a multi-channel network or how popular it was with creators.

While Machinima was not immensely profitable, it was noted that AT&T had shut down popular movie streaming service FilmStruck under similar circumstances because it was not reporting Netflix-sized revenue.

Key takeaways:

Machinima, a portmanteau of machine and cinema, was an American online entertainment network founded by Hugh Hancock in 2000. The network started as a hub for using real-time computer graphics engines to create cinematic animations.
Machinima forced its creators into life contracts that enabled them to use their content perpetually. These contracts, combined with failed promises to deliver advertising revenue, caused many content creators to avoid the platform.
Warner Digital Networks acquired Machinima in 2016, which was acquired by AT&T two years later. Machinima then faded into obscurity under various subsidiaries, with many believing the network was a victim of corporate churn.

Timeline and Key Highlights

Year	Event	Description
2000	Founding of Machinima.	Machinima, founded by Hugh Hancock, emerges as an online entertainment network focusing on the creation and promotion of machinima, a form of animation created using real-time computer graphics engines within video games. The platform becomes a hub for user-generated content and cultivates a community of creators and enthusiasts interested in the creative potential of machinima.
2006	Launch of Machinima’s YouTube channel.	Machinima expands its reach by launching a YouTube channel, leveraging the platform to collaborate with animators and creators to produce cinematic videos under its own brand. The YouTube channel quickly gains traction, amassing a substantial subscriber base of 12.6 million users, and becomes one of the leading destinations for gaming and entertainment content on the platform.
Early	Machinima’s hiring practices draw criticism.	Machinima faces backlash over its hiring practices, particularly concerning alleged lifetime contracts that grant the network perpetual rights to creators’ content. Creators also claim that promised shares of YouTube advertising revenue were not delivered as expected. These controversial practices lead to negative publicity and a decline in trust among creators, contributing to the platform’s challenges and eventual downfall.
2016	Acquisition by Warner Digital Networks.	Warner Digital Networks acquires Machinima in a deal valued at nearly $100 million. The acquisition reflects Warner Bros.’ strategic interest in expanding its presence in the digital entertainment space and aligning with emerging trends in online content creation and distribution. Machinima becomes part of Warner Bros.’ digital portfolio, with expectations of leveraging its brand and resources for further growth and expansion.
2019	Shutdown of Machinima’s YouTube channel and cessation of operations.	Machinima’s YouTube channel, with its substantial subscriber base, is abruptly shut down, and all videos are made private. This unexpected move leads to the cessation of operations for Machinima as a whole, resulting in job losses for its employees. The shutdown marks the end of an era for the pioneering online entertainment network, leaving many in the community and industry surprised and saddened by its sudden demise.

Origin and Focus: Machinima was an American online entertainment network founded in 2000 by Hugh Hancock. It started as a hub for machinima, a process of using real-time computer graphics engines to create cinematic animations.
Diversification: Over time, Machinima expanded its content offerings beyond machinima and ventured into film, comic books, video game culture, and technology content.
YouTube Channel Shutdown: In 2006, Machinima launched a successful YouTube channel with 12.6 million subscribers. However, the channel was abruptly shut down in early 2019, and all videos were made private, leading to the cessation of operations and job losses for its employees.
Controversial Hiring Practices: In 2013, Machinima faced criticism for allegedly forcing creators into lifetime contracts that granted the network perpetual rights to their content. Creators also claimed that promised shares of YouTube advertising revenue were not delivered.
Acquisitions: Machinima was acquired by Warner Digital Networks in 2016 for nearly $100 million. Warner Digital Networks was later acquired by AT&T, and Machinima was incorporated into Otter Media, a division of WarnerMedia.
Obscurity and Corporate Churn: After being absorbed into Fullscreen, another WarnerMedia subsidiary, Machinima faded into obscurity. Some attributed its decline to corporate churn, with the involved corporations failing to understand the platform’s purpose and popularity among creators.
Unprofitability: While Machinima was not immensely profitable, its fate seemed tied to AT&T’s strategy of shutting down less lucrative ventures, similar to how they shut down FilmStruck.