Live from MIP Cube at MIPTV: My Interview with Phillip DeBevoise, the co-founder of Machinima

At the recent MIPTV market in Cannes, I interviewed Philip DeBevoise, the co-founder of the super-hot online video startup Machinima. This Los Angeles-based company has experienced some incredible results in the past year. They reach a global audience of 166 million viewers and they serve more than 1.4 billion video views each month. That’s way bigger than any traditional TV channel.

I’ve known Phillip’s brother (and co-founder) Allen for more than a decade. We worked together in the mid-1990s on pioneering online narratives and some early interactive TV concepts. I’ve watched his progress at Machinima with great interest because it offers some useful insight into the dynamics of the new video business that will eventually encompass today’s television industry.

Here’s what I learned:

Early on, Phillip and Allen made the decision to focus on content, not on building a platform for video distribution. That was a fateful choice. Back in 2007, there were several startup companies seeking to be “broadband studios”. At the time, the conventional wisdom was “own your platform to control your destiny.” The companies that followed this mantra invested huge amounts into building proprietary video management systems: nearly all of these companies failed. Machinima (and crosstown rival Maker Studios) succeeded in part because they chose to focus on content, not technology. For them, the platform was YouTube. This was a bold move. It took real courage to make that choice. At the time, I was an advisor to BrightCove and was also in the process of raising money for an online video startup: I recall clearly the prevailing sentiment among investors at the time that YouTube was a rather dubious ghetto for low-grade content, and anyway, investors always feel more confident when there is some sort of core technology asset or distribution infrastructure because they are skittish about pure-play content deals.

Instead of diverting scarce startup resources into the (expensive) problem of hosting, managing and serving video, Machinima’s founders let YouTube cope with the platform. They focused on aggregating great content at low cost. Back in 2007 and 2008, it was ultra low-cost. The word “Machinima” is a mash-up of two words: “machine” and “cinema” with a lingering overtone of Japanese anime. Kids create machinima videos by using the games on their Xbox or PS3 to generate 3D video. All the kids do is edit the video and add voiceover and music tracks. In other words, you don’t need to know how to animate in order to create a machinima. All you need is a game console and a wicked sense of humor.

Wisely, the major game studios did not consider this kind of mashup a copyright infringement. They understood that this was fan culture at its finest. The game publishers tolerated fan mashups…. and eventually they cooperated with Machinima to release special sequences and clips to the fans in order to encourage even more creation. This is brilliant fan marketing. Contrast this approach to the heavy-handed copyright enforcement efforts of the motion picture studios, who issue DMCA takedown notices and bring lawsuits in a fruitless effort to control their fans on the Internet. The fact that the game publishers encouraged fans to remix and redub their 3D game footage led to Machinima’s early success. The company emerged as the dominant aggregator of fan mashups.

Swiftly, the co-founders decided to upgrade their content. They began to groom some of the best content creators amongst the fans, and they gradually became more selective in their aggregation. They managed to evolve from a neutral aggregation platform to a proper publisher, nurturing talent and weeding out the lesser offerings. In the past two years, the company has emerged as a fullblown video studio, financing the production of relatively big budget thriller and action series like a remake of Mortal Kombat and the much-heralded RCVR, a show that resembles the X Files in its gloomy conspiratorial atmosphere.

The decision to focus on content is really a decision to focus on a core audience. In Machinima’s case, the core audience is young men ages 14-34. I’d estimate that this audience skews a lot younger, but for the sake of appealing to advertisers it is necessary to speak about young adults in the audience mix along with the teenagers. Two things about this audience: a) they are heavy users of YouTube, so this is the sweet spot for a content play on YouTube, and b) there are at least two huge groups of advertisers who are struggling to reach young men / teenage boys. Namely, the same game publishers and movie studios mentioned above.

These two kinds of companies face a big problem. During the past decade, teenage boys and young men have vanished from the mainstream media audience. They don’t watch TV. They don’t read magazines. And yet they are the only audience that movie studios can reliably depend upon to leave the home and attend an opening weekend for a big event movie. How do you reach them? Same problem for game companies: during the past decade, the release of a major game title has begun to resemble the dynamics of opening weekend for a major motion picture. In both cases, you need a vehicle for saturation marketing campaigns to build up a frenzy of awareness among young men. Bingo! Machinima is the vehicle. Machinima offers instant access to a vast global audience of young men. Both the game publishers and the movie studios care about the international audience because their products roll out globally. There is no better way to reach this audience than Machinima, where content can be geographically targeted, even locked up until it syncs with the release date of the movie or game.

There’s a lot more to the Machinima story, and we’ll soon be hearing about a big slate of new shows coming from this exciting company. Watch this space.