Microsoft pays to watch YouTube

Youtube played by the Xbox One

YouTube played by the Xbox One.

YouTube viewers may need to closely read the credits of videos starring the Xbox One from Microsoft (NASDAQ:MSFT). The word "credit" has multiple meanings; one definition is "an entry recording a sum received". This is the preferred meaning for a subset of "video partners", and "influencers" in the gaming community, who've allegedly been paid to create Xbox One astroturf videos.

Fast forward to Microsoft's partner-in-marketing Machinima, reputed originator of emails defining Xbox promotion video terms. In Microsoft's Xbox movies, a handsome, rugged, "don't mention Microsoft" clause always acts the leading role. Predictable and formulaic, these movies might be block-busters, but critical bloggers in the audience believe the US Federal Trade Commission may have to step in to rewrite scripts.

In IT Blogwatch, bloggers know a good thing when they see it.

Filling in for our humble blogwatcher Richi Jennings, is a humbler Stephen Glasskeys.


Hayden Dingman depreciates dinero:

Forget the console wars of years past. ... Those days are gone. We've now entered the Cold War phase of the console wars, a period of secrecy and cloak-and-dagger tactics.


[Reports are that] Microsoft secretly paid out money to YouTube personalities who promoted the Xbox One—three dollars per thousand views, to be exact. That might not sound like much, but we're talking about channels that often receive hundreds of thousands or even millions of views per video.


With YouTube a growing force in games coverage, it's naive to think [this] won't happen again. Still, the tactic is questionably legal. Under FTC rules...bloggers are supposed to make it clear which posts are paid endorsements—a condition that was potentially violated here.


This type of promotion is a betrayal of hard-earned trust. YouTube personalities gained sway largely because they were seen as trustworthy and "one of us" by fans, without the taint of advertising dollars.  MORE


Generous Dylan Zellmer shares a fistful of dollars:

Reports surfaced earlier this evening that Microsoft was paying YouTube influencers a fistful of dollars to promote Xbox One have now been confirmed. This email [image]...has been sent to some of the popular channel’s top personalities.  MORE


Technical trader Preston Galla predicted this chart:

There have been increasing calls for Microsoft to sell off its Xbox division, but selling it would be a big mistake. Here's why: It slaughters Apple and Google in the living room.


What people don't realize, though, is that the Xbox is far more than a gaming system, and is vital to Microsoft's future.


The Xbox is key to Microsoft winning the fight over entertainment. It may look like a gaming system, but it's really an entertainment-delivery system, and it beats anything that Apple or Google have.  MORE


Caveat emptor, warns Kyle Orland:

This weekend, word started leaking of a new promotion offering Machinima video partners [money] for posting videos featuring Xbox One content. ... The promotion...also appears on Machinima's activity feed on Poptent, a clearinghouse for these kind of video marketing campaigns. The Poptent page also mentions an earlier campaign surrounding the Xbox One's launch in November, which offered an additional $1 CPM for videos "promoting the Xbox One and its release games."


To qualify for the campaign (and the extra payments), Machinima partners had to post a video including at least 30 seconds of Xbox One game footage that mentioned the Xbox One by name and included the tag "XB1M13."


Whatever you think about the practice, there's reason to believe this kind of stealth promotion of "consumer-generated media" is likely to get more popular going forward. ... Something to keep in mind the next time you watch a video or read something from someone who says they're just an average, everyday consumer.  MORE


Kwame Opam closes a deal:

Microsoft has reportedly partnered with Machinima to quietly pay the YouTube channel's video partners to promote the Xbox One. ... However, the deal is particularly unique in that video makers could not disclose the details of the agreement and payment, potentially violating FTC rules in the process.


[A] copy of the full legal agreement leaked recently, detailing the confidentiality rules partners must abide by when they sign up.


However, according to FTC guidelines, endorsers are liable under the law if they don't "clearly and conspicuously" disclose that they are being paid by an advertiser for their services.   MORE


A free marketing economy attracts Dave Thier:

Sony’s PS4 and Microsoft’s Xbox One are already locked in one of the biggest mainstream marketing battles in the world right now, but it appears that one of those companies may be employing some less traditional means.


Theoretically, there’s no problem with that — if Microsoft wants to get large numbers of semi-crowd sourced spokespeople rather than a few high-priced ones, that’s its prerogative. It’s no secret that the Xbox One has struggled with hardcore gamers since before it was announced, and this sort of astroturfing is hardly anything new.


Advertisers are struggling with traditional means on the internet, and in some cases getting creative appears to mean getting a little bit shady.  MORE


Meanwhile, Jacob Siegal nullifies an agreement:

It has been hard to escape the endless barrage of next-generation console coverage over the past several months. The launches of the Xbox One and PlayStation 4 were accompanied by two of the more extensive marketing efforts of 2013, but it appears that Microsoft might have taken its strategy a step outside of legal boundaries.


Last Friday, iGame Responsibly shared an email addressed to Machinima "influencers" which details the [marketing] offer. Beginning on January 14th, in order to earn an additional $3 for every 1,000 views, partners would need to...follow the [email provided] guidelines and submit the link through Poptent.


On Saturday, someone anonymously uploaded the aforementioned guidelines to Pastebin. The legal agreement is a little more sinister than the leaked email.


The campaign apparently ended almost as quickly as it started. Microsoft had hoped to reach a combined 1.25 million views on participating videos, and Poptent lists the campaign as "expired" as of January 16th.   MORE

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