Video-sharing site YouTube will terminate its partnership with Yeah1 Group, a Vietnamese media corporation that owns shares in various multi-channel networks (MCNs), claiming the group has violated several of its policies.
MCNs are third-party service providers that affiliate with multiple YouTube channels to offer services that may include audience development, content programming, creator collaborations, digital rights management, monetization, and sales.
Yeah1 Group owns Yeah1 Network Pte Ltd, which claims on its website to own more than 1,500 YouTube channels and is the seventh-largest MCN in the world in terms of total views. Yeah1 Network also indirectly owns a 16.93% stake in Thailand-based network SPRINGme Pte Ltd and 100% of U.S.-based ScaleLab LLC. Yeah1 acquired the U.S. MCN in January for US$20 million.
In a statement, Yeah1 said YouTube would terminate its content hosting services agreement with Yeah1 Group and its affiliates after March 31 due to violations of channel management policies by SPRINGme. YouTube claims SPRINGme has abused its privileges as an MCN by providing illegal services to third-party channels.
Newly-created YouTube channels are found to have paid SPRINGme to be admitted into the network, which makes enabling monetization on the channels easier thanks to the MCN’s credentials.
Normally, an independent channel needs at least 1,000 subscribers, 4,000 hours of accumulated video view time and appropriate content in order to enable monetization, which allows the channel to make money from ad placement, a YouTube content creator told Vietnamese news site Zing.
These requirements are not needed when a channel is under the affiliation of an MCN, which YouTube entrusts with filtering out unqualified content creators. After monetization has been successfully enabled, SPRINGme terminates partnership with such channels to rid itself of any responsibility for their content.
The practice was recently discovered by YouTube, which launched a massive campaign to close thousands of channels found to have enabled monetization using this method.
In a statement, Yeah1 Group pledged to fulfill its responsibilities with partnered channels before and after the March 31 deadline, even in the “worst case scenario” that its partnership with YouTube is terminated, which will affect all MCNs under its ownership.
Yeah1 says it is still working with YouTube on the issue with a goal to reach a deal to limit the punishment to channels managed by SPRINGme only, and will announce the final outcome by March 11. In 2018, YouTube earnings contributed around $1 million, or around 13 percent, in after-tax profits to Yeah1.
On a medium-term basis, the loss of revenue from YouTube is expected to cost the company more than $20 million USD in revenue losses. Some shareholders are calling for a shake-up in the company’s management amid claims that they have neglected their corporate and legal responsibilities.