Everything You Wanted to Know About Working with an MCN: TubeTalk 198 with Shannon Morse

Are you a YouTuber thinking about signing up with an MCN? We discuss the pros and cons of this strategy on this week's episode of TubeTalk!

What is an MCN, or ‘Multi-Channel Network’? Should a small creator work with one to establish a presence? Should larger YouTube channels stay tied to them as they pick up more sponsorship and brand deals?

Welcome to another episode of TubeTalk. I’m Liron Segev, the Director of Customer Success here at vidIQ, which means every day I help creators, big and small, level up their channels, get more subscribers, and generate more views in less time. One of the coolest parts of my job is meeting amazing creators from around the world and discovering their unique YouTube journey.

When we get to learn from other people's experiences, their mistakes, and the winning strategies they have implemented in the past that just helps us grow and hopefully, avoid the same pitfalls.

In this week’s episode, we talk to Shannon Morse, an awesome creator who has worked with MCNs. In this week’s Tubetalk you will learn:

  • The pros and cons of working with an MCN
  • How to understand the different contracts involved in signing up with one
  • The vital importance of negotiation
  • How to understand your YouTube channel’s worth
  • How to confirm the validity and credibility of an MCN

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Everything You wanted to Know About Working with an MCN: Full Transcript

Liron Segev: So Shannon, welcome to TubeTalk

Shannon: Aww, you're too sweet. Thank you so much for having me on. I'm super excited to chat about this.

Liron Segev: I'm so glad we finally managed to get it all together to be able to do this. This is awesome. For those who don't know, who is Shannon in a tweet, what would you say?

Shannon: So I am a host and producer of multiple YouTube channels. I've been doing it for a decade, and I just started going full-time on my personal YouTube channel, and I'm growing that based on my own experiences from my many years working with networks and other YouTube channels. I love technology.

Liron Segev: Going full-time on your YouTube, well done. Congratulations. That's awesome.

Shannon, I really want to dive into the conversation we kind of had briefly about your past. So we get so many questions about an MCN. Is it good working with them? Is it not? Does it help you? Does it not? Maybe we can take it kind of from the top because you've got a lot of experience with an MCN. What is an MCN? Let's start there.

Shannon: Yeah, I do have a lot of experience with MCNs for sure. So MCN stands for multichannel networks, and these are usually some kind of third party company that wants to affiliate with you along with multiple other YouTube channels to help you grow, or at least that's what they advertise.

So an MCN could come to you and offer to sell sponsorships for you or they could help you monetize your channel or deal with digital rights and copyright issues. They could get you connected with a YouTube partnership program or help you with content programming and really get into the nitty-gritty of helping you figure out what your niche is so they could help with audience development.

So MCNs are usually divided into two different types, either you have affiliate channels or owned and operated. An MCN can have two different types of channels underneath whatever their YouTube network is.

So on one hand, they might have affiliate channels, and those are managed pretty much totally by the MCN and they reside in an affiliate content owner type of management by that MCN. On the other hand, we have owned and operated, and those are owned and operated by the MCN solely. So, affiliate channels are what I'm really used to. However, I have a lot of friends who had channels that were owned and operated by the MCN, which means the MCN has full control over what you do on that channel to the point where they could eventually even cancel the channel if it's not doing good.

Liron Segev: So I have alarm bells ringing all over the place.

Shannon: I'm sure you do. Yeah.

Liron Segev: Us as creators, we want control of absolutely everything, and for us to even outsource an editor or outsource someone for thumbnails, that's already a scary thing. Now we're saying somebody else actually owns my content, owns my channel? I don't know. It sounds scary. Is it? Am I misreading this? Is it true to a point? What would you say?

Shannon: So from my experience, when I first started with a channel called Hak5, which is a big channel, but when we started it was relatively small, and we had a very, very specific niche, hackers and information security professionals.

We had Discovery Digital Networks come to us, which at the time was called Revision3, and they offered to either purchase our channel, which I won't give dollar amounts, but they offered to either purchase the channel and own the rights to the channel or we could become an affiliate and they would get a percentage of whatever our sponsorships brought in.

So of course, when we came to them and we were like, "Hey, let's have a partnership going on here," we had red flags as well. We didn't want to be owned and operated by the MCN because that means that they would have full rights over the channel. We would feel like sellouts in a sense, even though they were offering us a good amount of money and they would take on full liability for the content.

Well, when it comes to something like hacker content, you may want to sell your channel and have them take full liability and just take the money and run or continue hosting on that channel and have them just take care of all the background of it and then you would basically just get paid by the operator.

On the other hand, since we were a very niche audience since we did come from a very core passionate background of something that we truly loved, we really started delving into the idea of being an affiliate channel with Revision3. So that meant that the MCN came to us, Revision3 came to us, and they said, "Okay. Well, we will offer you a sponsorship deal where we will sell all these sponsorships for you, help you grow your audience, help you do all the creative collaborations. We'll put you on other channels on our network."

So we obviously automatically had that partnership kind of built-in since they had all those connections, which was really cool and then they would just take a percentage of those sponsorships that they brought in as well as YouTube monetization. So we ended up going with the affiliate channel option, which over time, we found that, Oh, turns out we could probably sell this on our own and make the same amount of money.

Liron Segev: Okay. So it's important to mention two things. They take a percentage of your YouTube AdSense as well as sponsorship deals.*

Shannon: Yes.

Liron Segev: Is that the deals that they bring, or even if you bring a deal, they still get their cuts out of that?

Shannon: So it was deals that they brought. However, if somebody came directly to us and said, "Hey, we want to sponsor on your channel," we would have to give that company, the MCNs, information. So we would have to forward their information over to the MCN and say, "Hey, we are an affiliate of this network. We have to run all our sponsorships through them."

However, that was just our contract. There's a lot of different options that you can have. When it comes to MCNs, a lot of times, the YouTuber is in control. If an MCN is coming to you, that means that they see some kind of value in your channel. So you are the one that has the power to negotiate. That's what we didn't really understand back in the day.

We didn't understand that we could negotiate. We were overjoyed that a network even wanted to work with us. So we were just like, "Yes, sign that contract and go with it." What we should have done was negotiate harder so that we would be able to take more of our money. Because at the end of the day, we are producing all that content, it is our passion, we are growing our audience.

While they are helping and they are doing a lot of that background work, the audience doesn't come unless they like the hosts. Really, if we weren't the ones on that channel, then it wouldn't have grown in the starting place. So I always felt like we should have negotiated better because we didn't understand our own value at that time.

Liron Segev: That's what it is. You've got through the experience and then you realize that hold on, the future, should you do this again, you have a much better, stronger negotiating power since it is your channel and people are coming to you at the end of the day.

Shannon: Yeah. Absolutely.

Liron Segev: When you say kind of negotiate, without giving exact figures, are they talking about kind of a 50, 60% cut out of your AdSense or are they talking about three or 4%, which is not a big deal.

Shannon: Yeah, exactly. So it's more like the bigger numbers. So like, you would have a 40-60 cut or a 30--70 cut, something like that. I believe when we started it was closer to like, they got 60% we got 40, or something terrible.

And then over time, as our contract was going to expire each year or every three years or two years, whatever the contractor was on, we were able to go back and negotiate based on how much money we were bringing in for them, because they were taking home a decent share of those sponsorship amounts, and we were able to renegotiate that information with them. So over time, we were able to take control of what we thought we were owed based on our audience size. Now our audience is over 550,000 subscribers strong, and each episode gets really good views and watch time. So I'm quite proud of what we do.

We thought that we were worth it. I think about four years into my career working with that channel and working with a few other content creators, just doing guest hosting and stuff like that, I developed a mentor in one of my friends, my friend Tom merit, I'll totally name him here because he's awesome. He's a great guy, Daily Tech News Show, that's the show.

But I came to him one day and I said, "I have this guest-hosting opportunity, and I'm trying to figure out what I should ask for." I gave him a dollar amount and he was like, "Oh no, no. That's not the right amount." And I was like, "Oh my gosh, am I asking for too much?" And then he said, "Ask for double." So I did, and they accepted it.

So I feel like a lot of times with creating shows on YouTube or just creating media online, we don't value ourselves as much as we really should, and I think a lot of that is imposter syndrome, and we feel like we maybe don't belong or we read too much into YouTube comments or maybe we just hear what other people say and we just take criticism to heart way more than we think we should or way more than we should.

So I started asking for double what I thought I was worth, and I've never had somebody turn me down. I think says a lot about what I valued myself at when I was first starting to what I think of my job now. I think of it more as a career and something that I can negotiate, and I feel much stronger in my power and having that ability than I did back in the day. So I'm pretty proud of what I've developed since then.

Liron Segev: It makes sense. You've proven it. You've kind of got value, you've got your steps behind you, you can show the brands, you can show the company that you're working with how much value you actually bring. Do you think that maybe someone starting out, maybe they got under 5,000 subscribers, they might not have those views and subs at this stage, are they still in a good position to negotiate and show some ROI, or should they say, "Well, you know what, I'm too small. Let me kind of suck it up for a bit until I get bigger," and then do what you did?

Shannon: Oh yeah, absolutely. You can absolutely negotiate and get good ROI. Return on investment is what we're talking about here. That's something that a lot of companies are finally beginning to understand, is that micro-influencers are people who have like less than 10,000 subscribers or less than 20,000 depending on the social media network.

They're starting to understand that people who have smaller audiences don't cost as much as the million-plus subscriber channels, but they can bring in a lot more money for that company because the audience that we have developed are tried and true, they're people that have chosen to subscribe to us and continue to do so because they trust us and they trust our transparency.

And the more transparent and the more honest you are with your audience, especially when you're starting off, the stronger that smaller audience is going to be. They're going to be the people that keep on coming back and watching every single video that you do and sticking around for the entire video as opposed to leaving after five to 15 seconds.

So having that return on investment is something that you can absolutely build. Now, of course, if you're starting with zero subscribers, you're not going to have any return on investment that you can show.

Something that I started doing when I didn't know if I had any ROI to show for sponsorships, potential sponsorships, was I tweeted out, "Has anybody ever purchased any tech based on my reviews?" And I got a ton of tweets back. So I use that information and I put it into a media kit and I started sending that out to potential sponsors.

That right there is, I think, what helped me really sell my channel. Even though I've been doing this for 10 years and I just started building up my own personal channel, I only have 20,000 subscribers on there, which to me sounds relatively small given I started with a 500,000 subscriber channel, so big difference there.

But it's my channel, and it's something that a lot of people have come over to from that larger channel because they trust me and they realize how honest I am and how transparent I am and how real I am with them. I always tell people like, I am not a celebrity in any sense. This is my job. When I come home, I'm coming home to two cats and my husband, and I do things that everybody does. I watch Netflix and stuff like that. So I'm not some kind of special person here, I've just figured out how to make my job something that people enjoy, and I truly love to entertain and educate people.

I think in a past life, maybe I was an educator or a teacher. So I try to bring as much of that as I can to these networks and to my YouTube channel so that when I do talk to these sponsors, they do see that passion and they see that ROI with all those tweets that I got as replies and they see that I actually can sell a product just by talking about them on my channel.

Liron Segev: So you're not with an MCN at the moment on your personal channel?

Shannon: I am not. I honestly don't think I would go with an MCN, even though it would help me grow, most likely. But I feel like there are a lot of scams out there, and I think there's a lot of things that when you're a new YouTube content creator, you aren't really sure what to look for when it comes to MCNs.

One thing I would ask for is numbers. What kind of numbers can they show you? Since you are the negotiator in here, what kind of numbers can they show you that proves that they know what they are doing? A lot of these companies just want to get in with your channel so that they can get a portion of your money, which is very scary and is a big red flag.

So one thing that I would highly recommend looking for is asking them for their own ROI. What is their return on investment? How can they show you that they have performed over time, and can they give you some referrals or some testimonials from other YouTube content creators so that you can speak to them directly before choosing to sign a contract with an MCN?

Liron Segev: That's always been my frustration with MCNs, because they could spend zero time with you and simply get a percentage of your revenue. But if they've got another channel that's next to you that's doing 500,000, a million subscribers, doing many more views than you are, that's going to get them more money. Why would they spend time with the newbie when they could be focusing on the cash cow that's bringing them all that revenue?

Shannon: Exactly.

Liron Segev: Did you ever find that, that maybe they prioritize the bigger channels even though they've signed you on anyways?

Shannon: Luckily, that was not something that I had ever experienced, but that's personally. But I do have friends that have experienced that, where they did sign on with the MCN, a multichannel network, and they found that the MCN was focusing on the larger content creators and giving them collabs between each other, but they were not focusing on those smaller content creators, and basically just taking a portion of their money and just expecting them to grow their audience on their own. Even these smaller YouTube channels did not even know where to start.

Liron Segev: What's the point of the MCN if you're going to join the MCN with the purpose of growing and if they're expecting you to simply do it by yourself and collect their percentage, that seems like a very big scam to me.

Shannon: It is. It's a huge scam. I was running the show called Tech Thing with my cohost Patrick Norton. The show never hit 100k subscribers on YouTube, but we had very good views, and I think that's what turned a lot of these MCNs into sending us emails. The funny thing is, I can't tell you how many emailed us and just asked us like, "Hey, we would love for you to join our MCN. Go and apply here."

They expect you to be excited about it, which we just looked at it as scams. We looked at it as spam email, and we would immediately delete these emails because they didn't offer us any kind of proof, they didn't offer us any kind of monetary gain from the channel. All they showed us was, "Oh, you should be a part of our MCN, it's going to be great," and that was about it. We had nothing to work off of there, so we would immediately delete those.

That's something that I feel like a lot of YouTubers have experienced, where they turn their channel on, they get really good growth, and then all of a sudden all these MCNs come out of the woodwork, and we've never even heard of them, and they just start emailing you. You have no proof whatsoever that they've actually done anything to help any channels that are on their network.

Liron Segev: You can see at the beginning, it's very flattering. I've just started my channel and these people want to work with me, they want to sign me, which is like a big deal. So you get super, super excited. Their website always looks professional with lots of blah, blah, blah and lots of marketing, and it makes you feel like, "Wow, if I joined this, I could also be the next, whatever big creator you want to name."

Shannon: Right. How exciting.

Liron Segev: It’s great for the ego. But I'm wondering if there's still a place for an MCN. I'm finding out doesn't get many, "Wow. I worked with an MCN and it was absolutely amazing," stories.

Shannon: Yeah. I wouldn't say that it was amazing, but it did bring us opportunities, especially since we were starting to grow. We decided to sign with a very, very smart company. Revision3 was a wonderful MCN for us to work with in the sense that while they did take home a very large portion of our money and we didn't understand how to negotiate with them at the time, they did bring us those partnership opportunities.

There was one time that they flew me out to Chicago to talk with potential advertisers and tell them about my channel one-on-one, which I thought was so cool, because I was able to talk to all these big name brands and discuss how valuable the information security community could be to them.

That's something that I feel like they would not understand, these sponsorships wouldn't understand if they didn't get that one-on-one opportunity with a host. That's something that I still experience to this day, is I build my best sponsorship relationships whenever I'm talking to companies one-on-one.

Because if you just send them your numbers and you say, "Hey, I have a channel with 20,000 subscribers," what are they going to get from that? If I send them my media kit and show them proof of my ROI and I get a chance to talk to them as opposed to going through a third party, like a third party website or an MCN, then they get more of a chance to understand who I am as a creator, know that I know what I'm doing, know that I follow FTC guidelines for example. Stuff like that.

Liron Segev: It sounds like you had some positive experiences with your MCN and then kind of some, not negative but more of, I wish I had done that smarter. So if you could go back, do you think having renegotiated a good contract, do you think that MCN would've helped you then?

Shannon: I think so. Well, I think it did help us overall to grow our channel and everything, mostly due to those collaborations and due to the fact that... If we didn't have them helping us sell sponsorships, then we probably wouldn't have been able to live in the San Francisco Bay area because it's very expensive.

It was hard to sell sponsorships on a hacker channel, basically, quite bluntly. So they did help us in that sense. But I do think that we would've been able to get farther with our profits if we had help to negotiate back in the day, which we didn't get.

Another thing that I did want to mention too, and this was not my experience, but when I heard from a very close friend of mine, is, when he signed his contract, he thought that he was doing an affiliate channel, and it turned out, based on the contract, it was owned and operated.

So he ended up selling the rights to his channel, to the MCN, and he didn't realize it, so they got it for an extremely cheap price based on that contract. He was stuck with it. There was nothing that he could do about it because he didn't read his contract when he signed it. It was that excitement that filled him.

He got super excited about being offered this opportunity, and he didn't take the time to take the contract to a lawyer or even go to a website where you can hire a lawyer to read a contract, which is very inexpensive to do, which could have saved him thousands and thousands and thousands of dollars. So I highly recommend reading your contract so you don't get screwed. Because a lot of these MCNs, they do kind of screw you in the end.

Liron Segev: I think it's an important note that you are locked into a period of time. So even though you might kind of be all excited and ready to do this, you are locked in for 12 months, 24 months. Even if they bring you nothing, you're still paying every month, you're paying a portion of your revenue to a company that's doing nothing for you.

This is why we're all super critical of an MCN, and this is why I love the advice of take it to an attorney. Spend a bit of money to make sure that you are getting the deal you think you're getting because they all have that one clause, it doesn't matter what we told you on the phone, it doesn't matter what emails we've sent, this is the contract. Unfortunately, some of these sharks that do swim in these waters are just out to get as much as they can, make their percentage and move on to the next client.

Shannon: I'm glad you mentioned it doesn't matter what you say on the phone. We actually ended up getting our opportunity with Revision3 because we went to a live show of one of their channels, one of their current shows. We went to a live show in New York, saw the show, we're super excited.

Somehow, maybe we socially engineered our way in, but somehow we ended up in the VIP section, and we ended up talking to the CEO. We had no clue if he would remember what was happening the next morning, but he did. He ended up getting the phone number and calling this guy straight up and saying, "Hey, we talked about this last night. Do you remember?" He was like, "Let's get this in writing."

So we ended up getting the contracted writing. Myself and my other cohost, we had no clue that this was happening until the next morning when he was like, "Hey, we might be on Revision3." And we were like, "What? That's awesome."

But we had no clue what was going on. So there was a lot of like inopportune moments there, but there were also some good opportunities that we had that just happened very happenstance. If we had not gone to that live show in New York, we probably wouldn't have ended up on Revision3.

Liron Segev: Yep, makes sense. So again, a very important note is you sometimes do have to get out of your comfort zone.

Shannon, if I'm thinking about this, you didn't go with an MCN with your new channel, but you've got all this wealth of experience, you know what you need to do to be able to get those brand deals. Regardless of the size of the channel, you're able to operate.

Shannon: Yes.

Liron Segev: A new channel that is up and running at the moment, and they're saying, "Look, I'm getting no AdSense anyway or very little, I'm getting zero brand deals at the moment." Should they maybe take a chance and find an MCN that they're happy with, get their contracts negotiated and written up and all the stuff we've mentioned, but perhaps maybe suck it up for a year or two years and really help build that audience not looking at the money at all, because you're doing it for longterm gain? Would you advise that it as potentially an opportunity?

Shannon: You could absolutely do that, yes. I could definitely see that as an opportunity. In fact, Hak5 didn't make any money for the first five years, that was from 2005 to 2010. We signed our contract with Revision3, I think it was around 2009. So that first year, we were just getting started to get monetized with the MCN and we made a little bit of money, enough to move out here to the San Francisco Bay Area and kind of get our toes wet in the pool.

So I would say from that experience, it's fine to do a show with an MCN and not make money when you're first getting started, and that might happen when they're just starting to understand you and you're building that relationship with your MCN.

But make sure that that's a short contract. Make sure that it's not something that has you tied in for five years because you may find that after they have helped you grow your audience, you may be able to make more money if you aren't with that MCN, especially if they are taking a large percentage of your take-home money from YouTube monetization as well as sponsorships. So I would definitely consider it. It would really depend on your own experiences and what you are currently experiencing. But yeah, consider it.

But definitely, definitely make sure that you have everything in writing, and that you have a lawyer look at your contracts so you're not getting completely screwed.

Liron Segev: And it's a reputable MCN, it's not one of those @gmail.com email addresses.

Shannon: Yeah. No, I've definitely seen those. I know what you're talking about.

Liron Segev: All right. So Shannon, as we're wrapping up here, if you could give a message out to all the creators out there, it's a tweet that every single YouTube creator is going to be able to see, what message would you give people?

Shannon: Okay. I'm going to say focus your niche, or niche, and try not to build your following on every single social media network.

Liron Segev: Okay. Follow your niche, I guess. Niche down. We've always said you can't be all things to all people. We get it. You've got to be very specific. We get that part. Tell me about the second part, you don't have to grow your following on all social networks. Tell me about that.

Shannon: That's correct. You don't. So you have Facebook, Instagram, you have TikTok talk now, you have Twitter, YouTube, Twitch…..

So if you try to grow your network on every single channel, all of them will be mediocre. If you try to focus on maybe two or three of those as opposed to every single one, you have more of a chance of growing those at a faster speed, at a faster potential because you're focusing more of your time and your value on those audiences.

So, for example, I built my Twitter following since 2007, and that's my largest following. It's bigger than my YouTube channel right now, which is so weird to me. But because I have focused down on Twitter as being one of my core social media networks, I'm able to sell that as a part of sponsorship opportunities by saying, "This is a big audience, these are all real people, I didn't buy any of my subscribers or anything like that. This is something that I have built and focused on over time."

Companies actually pay money to have tweets written out by me. Of course, I will label those as an ad because of FTC guidelines. But it's something that I can focus on, and I know that I have built this really awesome brand around that Twitter account. I have niched down on my channel, my YouTube channel, but I have also niche down on the social media networks that I have chosen to focus on.

So, even though I'm on TikTok, I'm mostly just on it to watch other people's TikToks. Even though I'm on Twitch, I only game as a hobby, so I'm not focusing on growing that channel as much as maybe I would want to. But that's because I already have channels that I should be focusing on. So I am, I'm making sure I'm spending most of my time on those few channels or social media networks.

Liron Segev: Love it. I think that's a very wise choice. Again, it's just another thing to add to a sponsorship. So you're not only going to get my YouTube video, but you're maybe going to get social media around that and look at my impressions on Twitter. You want to really give them a good value proposition.

Love that. Thank you for ending on such a good nugget. That was actually brilliant. Shannon, if people want to find you, where can they find you? Where can they hang out with you? Hit us up.

Shannon: So Twitter obviously, at snubs, I would also recommend checking out my YouTube channel, it's youtube.com/shannonmorse. That's where I've been focusing a lot of my time and energy on building that.

Liron Segev: Shannon, thank you very much for hanging out. It's been absolutely awesome. So glad we finally managed to do that. So thank you for your time.

Shannon: Thank you. It was so good to chat with you.

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