Fullscreen and Stylehaul, two companies that have largely built their businesses by selling ads on YouTube, have each had layoffs in recent days.
FullScreen, which is majority-owned by Otter Media — a joint venture between AT&T and The Chernin Group — has let go of 3% of its workforce, reports Video Ink.
Meanwhile, the beauty-influencer-focused Stylehaul — which is owned by the European media conglomerate RTL Group, has let go of nine staffers out of 100, the company said.
A few years ago, these startups, along with a slew of others, burst onto the media scene as new media outlets promising to bring some order to the YouTube creator landscape. Known as ‘multichannel networks,’ or MCNs, companies ranging from Machinima to Fullscreen to Maker Studios helped sell ads on thousands of YouTube channels, while also often operating as talent agents for influencers and production firms.
At its peak, a lot of money poured into this sector from big media companies. The biggest deal was Disney’s 2014 acquisition of Maker Studios for nearly $US700 million. Since then, Disney has significantly scaled back much of Maker’s operations and has folded the brand.
The MCN business model has often been seen as inherently challenged, since when these companies sell ads on YouTube they must share a large portion of that revenue. Meanwhile, many MCNs have focused on helping weave marketers’ product and messages into custom videos produced by influencers, which can be tough to scale.
More recently, Fullscreen has focused on building up its fledgling subscription video service, which features original content. The company could not be reached for comment.
For its part, Stylehaul says its overall headcount is up in 2017 versus last year, and that its revenue for the first half of this year has jumped 50% versus the same period in 2016.
“We have made the strategic decision to reallocate some of our resources to enable us to double the size of the technology and data team over the last two months in keeping with our strategic vision,” said Stylehaul CEO Stephanie Horbaczewski in a statement.
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