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 book, 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 channelwhich 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.

Hiring practices

Sometime around 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 unfavourable 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 in terms of advertising revenue and exposure.

Acquisitions

Machinima was acquired by Warner Digital Networks in 2016 in a deal worth just under $100 million. Warner Digital Networks was itself 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 in the near future. However, many were confused as to why the YouTube channel was shut down if 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 in perpetuity. These contracts, combined with failed promises to deliver advertising revenue, caused many content creators to avoid the platform.
  • Machinima was acquired by Warner Digital Networks in 2016 that was itself 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.

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