Peter Kafka

Recent Posts by Peter Kafka

Machinima Gets More Serious About Gaming Videos, Grabs Ad Boss From Microsoft

If you want to get a sense of what YouTube’s trying to do with its new “channel” strategy, check out what Machinima has already done: The company uses Google’s video site to serve up a steady diet of clips, for and about gamers.

And it’s fantastically successful. Machinima, powered primarily by YouTube, says it racks up 700 million video views a month.

Now it’s up to Jay Sampson to turn those eyeballs into dollars. He’s joining Machinima as its new EVP of sales, following a 14-year stint at Microsoft, where he most recently ran “emerging media sales” — that is, getting ads on to places like Xbox Live and MSN Games.

He’ll take over ad selling duties from Machinima president Philip DeBevoise, who will use the extra time to do things like making the company even bigger. DeBevoise’s brother Allen, by the way, is CEO.

Sampson’s hire is an indicator that Machinima is going to try to build a really, really big business instead of selling the really big one they already have. Another sign: A recent $5 million follow-on round from backers MK Capital and Redpoint Ventures, which pegs the company’s value “in the low hundreds of millions,” as my colleague Tricia Duryee reported. The LA-based company has raised about $20 million to date.

Machinima’s success is a nice example of two Web media lessons: 1) You need scale to make it in the ad business and 2) You can get scale targeting audiences that other mediums would consider too “niche.”

Machinima, for example, is for “gamers,” but not for Farmville gamers. It’s for hard-core gamers who get a kick out of watching in-game footage of first-person shooters, cut up and edited into entirely new narratives. Not my kind of thing, but lots of people really, really like it.

Here’s a remix of Halo 3, the kind of thing that originally made Machinima famous:

And the site is still doing the same kind of stuff:

But they’re now doing this sort of thing, too — a serialization, using real actors in real time, based on the classic Mortal Kombat chop ’em/sock ’em, produced by Time Warner’s Warner Bros. studio:

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Just as the atom bomb was the weapon that was supposed to render war obsolete, the Internet seems like capitalism’s ultimate feat of self-destructive genius, an economic doomsday device rendering it impossible for anyone to ever make a profit off anything again. It’s especially hopeless for those whose work is easily digitized and accessed free of charge.

— Author Tim Kreider on not getting paid for one’s work