Illustration by Jesse Lenz
The video "Thank you, I will miss you guys" is barely a minute long — all one shaky, handheld shot trained on the face of then-21-year-old Ben Vacas.
Vacas, known online as Braindeadly, has brown eyes, a faux hawk, and a British accent, discernible as he tells his 40,000 YouTube subscribers goodbye.
"I went into a call with Machinima this evening and they said that my contract is completely enforceable. I can't get out of it," Vacas tells the camera. "They said I am with them for the rest of my life — that I am with them forever.
"If I'm locked down to Machinima for the rest of my life and I've got no freedom, then I don't want to make videos anymore," he says. The screen fades to black.
The video closes with a written message: "If this is the last thing I say, please don't make the same mistake as I did and always read before you sign something."
Vacas gained prominence online as a top-ranked hunter in World of Warcraft, a video game he has played for more than seven years. He began making YouTube videos last year, mostly of him joking around with other players and commenting on games.
It wasn't long before Machinima, a multichannel YouTube network that specializes in video game content, came calling. The network offered him a partnership: It would put ads on his videos, and he would get a cut of the revenue. In November 2011 Vacas signed a contract with the company.
But the devil was in the details: After signing with Machinima, he learned the company would own the rights to whatever videos he posts online for the rest of his life, and beyond, "in perpetuity, throughout the universe, in all forms of media now known or hereafter devised." Not only that but his contract with the network was open-ended. There was no point at which it was set to expire.
Over the last two years, YouTube has quietly transformed from the province of amateurs to an increasingly cutthroat ecosystem where everyone — stars, networks, advertisers — is competing for views, viewers and view time.
Big money is at stake. That's because YouTube, with the backing of its parent company, Google, is pouring hundreds of millions of dollars into a campaign to compete with traditional television — and it's betting on multichannel networks like Machinima.
Armed with venture capital, these networks are offering young creators modest compensation in return for the ability to sell ads on their videos. The more channels a network can bring under its umbrella, the more eyeballs it can promise advertisers, and the richer it becomes.
But a recent string of high-profile disputes is prompting comparisons between YouTube networks and the exploitative Hollywood studios of the 1930s and '40s: Both convinced naive talent with little leverage to sign contracts that leave them at a disadvantage.
Internet and intellectual-property lawyers say these disputes suggest a serious problem in the emerging industry. But while two of the largest networks, Machinima and Maker Studios — both based in L.A., both darlings of venture capitalists — have been accused of some of the worst practices, investors remain undeterred.
In November, while Maker Studios was in the middle of a fight with its highest-profile star, Roy William Johnson, Time Warner was raising $36 million in venture-capital funds on behalf of the network. And in May, just weeks after Ben Vacas posted his emotional video, Machinima closed a round of fundraising, led by Google, worth $35 million.
Can networks like Machinima and Maker sustain their rapid growth if the creators on whose backs they built theirbusinesses revolt?
"I'd always wanted to be a filmmaker," says Hugh Hancock, reached by phone at his home in Edinburgh, Scotland. Generally acknowledged as the godfather of the art form "machinima," Hancock says, "The issue was, back then in 1996, it was before the digital video revolution, it was before 3-D animation was in any way affordable, so I'd always given it up as a pipe dream."
Everything changed with the release of Quake in June 1996.
The 28-level, first-person-shooter was one of the first games in which developers opened up the code to players — saying, in effect, create with this technology. Players could repurpose Quake's characters and settings to create original stories, then render them in 3-D animation.
A small, devoted community developed around these "Quake movies." As creators expanded to other games like the Sims or World of Warcraft, their art was dubbed "machinima" — a portmanteau of "machine" and "cinema."
"Back in '97, '98, there were probably 50 of us who were really serious about it and another 200 who dabbled," Hancock says.
In 2000, Hancock registered Machinima.com to be a hub where people would watch and upload videos.
As the community grew, the cost of hosting videos increased. Six years after its founding, Hancock sold the site to an enigmatic pair of serial entrepreneurs, half-brothers Allen and Philip DeBevoise. (Hancock declines to state the purchase price.)
Before buying Machinima.com, the DeBevoises ran Creative Planet, a collection of digital tools and film industry-related web properties, including Directors Net, Editors Net and VFX Pro.
That company followed the typical boom-and-bust pattern of the first wave of the Internet: It grew fast, and imploded. "Ultimately, it crashed and burned," one former employee says.
The DeBevoise brothers purchased Machinima.com in 2006 — the same year Google purchased YouTube. One of their first innovations was hosting Machinima videos on YouTube. Not only did it significantly cut down on the server costs, but it was done at a time when YouTube was hungry for content and, in 2007, just beginning to pay video creators for their work.
The brothers also began to cut deals with video game companies to advertise alongside the videos that used their games as source materials.
Today Machinima describes its content as being about not just video games but anything that appeals to men ages 13 to 34. CEO Allen DeBevoise calls them the "lost boys": males largely unreached by advertising. They don't watch TV; they don't read magazines. They just play video games.