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And now to another side of the business of Internet television. We're going to hear about one of the most successful networks on YouTube. Machinima is aimed at people who play videogames. Its backers want it to be a new media empire and it already gets about two and a half billion views a month. Most of those viewers are young men.

But NPR's Neda Ulaby says Machinima is pushing for an even larger audience. And they're doing it as more and more people are watching video on their phones, and the likes of ChromeCast or Xbox.

NEDA ULABY, BYLINE: Let's start just with that word Machinima, coined by a Scottish fan of video games and movies.

SANJAY SHARMA: Which was machine and cinema portmanteau'd together.

(SOUNDBITE OF A VIDEOGAME)

ULABY: Back in the late 1990s, Hugh Hancock was part of a group of hardcore gamers who commandeered their game software to make their own animated movies. So, suddenly a big muscley fighter character could the star of a story a gamer made up.

(SOUNDBITE OF A VIDEOGAME)

UNIDENTIFIED MAN #1: Try it.

HUGH HANCOCK: The early ones were made inside games like "Quake" and "Doom."

ULABY: Sanjay Sharma would have an important role in Machinima's future.

SHARMA: The notion that: Wait a second, this is a videogame and these characters are inside of a videogame but they're being manipulated and puppeteered and voice over-ed to enact an entirely new story.

ULABY: A story that could stand on its own. Hugh Hancock, the Scottish guy, started a website for Machinima's fan community. But soon he was overwhelmed by submissions and hundreds of thousands of views. So he sold Machinima.com to a couple of Hollywood entrepreneurs. They hired Sanjay Sharma.

SHARMA: We were not unlike a lot of startups in kind of, you know, trying to find our way.

ULABY: Right at the beginning, Sharma says the company decided to do something that felt risky.

SHARMA: We made a bet on YouTube. And the bet was this was the platform that is going to win the lion's share of video viewing.

ULABY: Now that seems obvious, but back in 2006 nobody knew what YouTube was going to be. Machinima pioneered a YouTube channel back when that was a novelty.

(SOUNDBITE OF A VIDEOGAME)

ULABY: The company gathered hundreds of mostly young men to make amateur animated movies about, for example, giant aliens facing down two futuristic cops in gas masks.

(SOUNDBITE OF A VIDEOGAME)

UNIDENTIFIED MAN #2: Hey, I dare you to shoot it.

UNIDENTIFIED MAN #3: No, I'm not going to shoot it.

UNIDENTIFIED MAN #2: Chicken.

ULABY: That's from a science fiction comedy series created by Ross Scott. Starting five years ago, he says he made about 60 videos for Machinima. But he says he never intends to work with them ever again.

ROSS SCOTT: My personal experience is that it's been unethical and predatory.

ULABY: Scott ended up in a lawsuit. He settled, so he can't really talk about details. But plenty of other people started complaining about Machinima; about how much it tried to control copyrights and paid less and less while scooping up more and more advertising and investors, including Google. Now, scaling up is a struggle for all kinds of online media companies. When Machinima hired Neneah Reeves as chief operating officer, she set to work to address its reputation.

NENEAH REEVES: I think it's one of the things I'm most proud of is how we have turned the corner on providing better support and more opportunity for our partners.

ULABY: A lot of what they're posting on Machinima these days are videos of themselves playing video games.

(SOUNDBITE OF A VIDEOGAME)

UNIDENTIFIED MAN #4: OK. You go down and you go hit the ground.

ULABY: This British kid, who calls himself the Syndicate, has made enough money from his how-to videos on Machinima to buy his mom a house, says Neneah Reeves.

REEVES: Some of these kids make a lot of money. There are many who make over a thousand dollars a month.

ULABY: But Machinima, like a lot of YouTube channels, is getting slicker. It's partnering with major studios to make the videos it's putting online. Videos it hopes will attract the same nerdily inclined audience who watch some of TV's most popular shows, "The Big Bang Theory," "Game of Thrones," "The Walking Dead."

(SOUNDBITE OF A VIDEOGAME)

ULABY: So Machinima developed its own "The Walking Dead" series online with AMC. Jay Sampson runs Machinima's advertising. He says the ambition is to be something bigger than a cable channel.

JAY SAMPSON: We want to be on a billion devices.

ULABY: Your phone, your game player, maybe even your TV. But even as Machinima expands into science fiction and sports and comedy and professionally-made content, it needs to hang on to that homegrown fan feel it started with. Sampson says all those homemade videos communicate a sense of authenticity; perhaps most importantly, to marketers.

SAMPSON: Marketers are always searching for quote-unquote, "the lost boys," right? So males, you know, 13 to 34, 18 to 24, hard to find in a lot of different medias.

ULABY: But even though Machinima is the top video network for young men and one of the biggest successes on YouTube, it's still struggling with what comes next. Just this year alone, the company has gone through two rounds of layoffs. And the entrepreneurs who first bought Machinima are stepping down from their current jobs. For Machinima to be the new media empire they dreamed of, they say it needs more professional management.

Neda Ulaby, NPR News.

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