Google, YouTube Continue Betting Big On Machinima, And With Good Reason

Google, YouTube Continue Betting Big On Machinima, And With Good Reason

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A funding round of $35 million went to Machinima, one of YouTube’s most visited sites, to the tune of 1.6 billion views last April, and a lion’s share of the funding came from Google.  Already-invested Redpoint Ventures and MK Capital also joined in.  All of this makes perfect sense: Machinima cranks out content like no other, and the possibilities presented by the channel are immense, since its ties to the video game world can tap into so many properties and generate insane tent-pole events surrounding those properties.  By the way, this is 7 times the investment they got last year.

In the weeks leading up to the huge video game release Halo 4, a web series based on the game will be gaining a huge amount of attention and has the potential to be a blockbuster, a game-changing moment for web series.  While a few web series like Mortal Kombat: Legacy have banged out tens of millions of views, Halo: Forward Unto Dawn could easily beat all of them, with Microsoft funding a highly-anticipated production.

Machinima Has Provided YouTube With Content, Engagement And They Have Been Rewarded With Cash, Confidence

A $35 million investment is huge, of course.  But it’s not without reason.  Machinima has gathered more than 3.3 billion views on YouTube, but boast over 28 billion across their network, over 109 million subscribers, and claim over 800,000 videos to their name.  What’s most important in the numbers is the engagement, which is what we’ve been talking about for awhile and what YouTube covets the most.  We talked about how the average YouTube engagement has increased from 2.96 minutes to 3.95 minutes in the last year, and how YouTube is looking to sell more ads with the increased time spent on each video.

Machinima’s engagement was a whopping 65 minutes per viewer last month.  Not only are they getting an insane amount of views, providing loads of content, but they are keeping their viewers glued to the channel.  Now you can see why Google has spent a lot of money on them.  They reach a highly-coveted demographic and can keep viewers watching, and the ad money that they can command will be greater than almost any other channel they have spent money on over the past few months.

And a blockbuster web series like Halo: Forward Unto Dawn is going to be an immense opportunity for Machinima and YouTube: 5 episodes of around 15 minutes each, playing before the launch of one of the most anticipated games of the year.  I think quite a few people are looking at this show as the possible tipping point where web entertainment grows up and starts playing with the big boys.  Here’s a video with the announcement:

Machinima’s funding will allow them to focus on even better content and expansion over the next year, and their growth could be one of the big reasons video becomes a juggernaut in the coming months.


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