State of the Network (November 2nd 2013)

As I mentioned back in June, we’re currently in the process of getting a seed investment. An investment is a 4-6 month process.

One challenge for us to grow the Martell Brothers Studios network organically has been our difficulty in getting channels into the network. Some of you may recall that we had to ask you to make brand new channels so we could add you, because you’d already entered your channel into a Partnership with Google and/or you had copyright strikes on your channel preventing us from adding you to our network. This problem has continued and made it challenging to grow the network in the way other MCNs have.

Back in June I made a decision to stop focusing on trying to recruit channels into the network and instead on finishing the app so we’d have a tool to assist our partners in the long-term rather than the short-term.

In order to best understand what I mean by long-term you can watch this unlisted video meant for Station clients. http://www.youtube.com/watch?v=yoZH7SqK7lQ

YouTube has not given us a lot of support. I wouldn’t say they are antagonistic, but they are indifferent to our requests for things as basic as transferring existing Partnered channels into our network. As many of you have undoubtedly read, since last January YouTube has changed its approach and become a network itself with its events like Geek Week and the YouTube Music Awards. However it is a network that is only interested in the top-tier talent who already command large audiences. YouTube isn’t interested in helping individuals building brands like we are. They merely wish to take advantage of brands that already exist. This is all the more reason why Martell TV is necessary for us.

Although we don’t have an investment yet and development on Martell TV has been slower than I’d like, I want everyone to know we are on schedule for a consumer launch release during SXSW on March 7th and a followup at Playlist Live on March 21st. Even without an investment, we will make these launch dates. I and others have worked tirelessly to sell Stations listings in the app to third-parties, and we have also negotiated deals with our software development team to make sure we launch on time. The third-party Stations will be operated by other networks, who will bring their audiences to our platform. It’s a type of co-branding marketing partnership. I cannot yet make announcements about which third-parties are operating Stations, but you will learn by March.

However, our QR coded brand materials will be all over Playlist Live and we expect that their 85K attendees will help make the app go viral. At the Gold sponsorship tier, a Martell TV logo will be on every grab bag given out, along with other promotional materials around the event. We feel confident in this kick-off resulting in a good sized audience for our network, as SXSW ’14 will have over 150,000 attendees and Playlist Live ’14 is expected to have 85,000 attendees.

Our existing Partners’ videos will be included in the Stations our network runs, and they will receive a cut of the ad revenue against inventory sold within those shows. We have spent a lot of time trying to figure out how to use the episode container system to slot in our Partners’ videos as segments in half hour programs. Furthermore, once we do have an investment we expect to compensate everyone for their faith in us with a bonus reward which will take the form of video production equipment and access to our production facilities in Austin, TX. We also plan to obtain a medical insurance plan that will allow our US-based partners to qualify for coverage through our network. I have personally looked into the matter and found a plan that will work for our needs.

When I first started this network in August of last year, I did so with several assumptions.

  1. I would be able to use my veteran’s benefits to fund the company.
  2. Several of my friends who are popular YouTube creators would join the network.
  3. The Martell TV app would be finished by March ’13 and ready for a SXSW launch.

Unfortunately, the Department of Veteran’s Affairs employees in charge of administrating the program I need are highly uncooperative. The counselors have never heard of a YouTube MCN before and refuse to even look at the information I have submitted to them. They have operated with a belief that this business is not to be taken seriously, and looked for every trick in their book to prevent me from accessing funding through their programs. Sadly the VA has no qualms with wasting $6.1 million dollars on conventions for their own employees and giving its employees fat bonus checks unrelated to actual job performance (which, finally are starting to be taken away from them).

It also turned out that many of my friends were fair-weather, and when they did leave their networks to join mine, instead decided to join other networks which, even though my offer was more generous, they felt those larger networks would help them with marketing (but did those other networks deliver on their promises? Of course not). As tends to happen, a lot of people think about the short-term and not the long-term.

Because I was unable to obtain any seed money from the VA’s Chapter 31 program and we didn’t get any ‘celebrities’ into the network (which is why investors invest into MCNs) we have struggled to complete the development of the Martell TV application.

Unlike other networks, we are not primarily funded by the ad revenue; I have put in over $20,000 of my own money into the app development, and over $35,000 into other monthly expenses such as our office space, printing materials, business meetings and such.

Once we have received seed money you will also see a dramatic difference in how we operate, because the only thing holding us back right now is a lack of funding. The will to build the greatest TV network is still strong.

Carey Martell

CEO, Martell Brothers Studios