YouTube network Fullscreen raises new funding round for expansion

YouTube-focused online video firm Fullscreen has raised a Series A funding round led by former News Corporation president Peter Chernin's investment group.

Comcast Ventures and WPP participated in the round. Fullscreen hasn't said how much it raised, but earlier this year All Things Digital suggested the round would be $30m, valuing the company at $110m.

The company is one of a group of multi-channel networks (MCNs) building their businesses on YouTube, with rivals including Maker Studios, Machinima and ZEFR.

Fullscreen runs more than 10,000 channels on Google's video site, with more than 150m total subscribers and 2.5bn monthly views. It works with new talent on YouTube as well as established TV industry companies such as NBCUniversal and Ryan Seacrest Productions.

"We've built scalable technology and an incredible roster of talent and brand partners since we were founded just over two years ago," said chief executive George Strompolos in a statement.

"This influx of capital will help us accelerate our goal of building a global media company, funding new content initiatives, continuing to invest into new technologies and furthering our rapid expansion into international markets."

Investing in "owned-and-operated" content is a key plank in that strategy: Fullscreen has YouTube stars and big media partners, but it wants to also own more of its own programming, with YouTube eager to present itself as a viable alternative to traditional broadcasters for breaking new shows and formats – not to mention advertising.

"There has been explosive growth in online video, particularly on YouTube, and a growing demand from our clients to reach consumers on its platform as it revolutionises youth media consumption," said Mark Read, chief executive of WPP Digital.

"Our partnership with Fullscreen will give our agencies and clients new expertise, insights, technology and access to help connect with consumers on the world's largest video platform."

Fullscreen's funding comes shortly after YouTube launched a new feature enabling channel owners to charge subscriptions, which could provide a valuable new revenue stream for MCNs.

It may be necessary. Earlier this year, a report on All Things Digital suggested that MCNs were finding YouTube advertising to be considerably less lucrative than they had hoped.

More recently, US entrepreneur Jason Calacanis made waves with strong criticism of YouTube's Original Channels initiative, which funds creators making original content for its platform.

He attacked the average 45% cut of advertising revenues that YouTube keeps, and suggested that many of the MCNs do not have sustainable businesses.

"Sure, it can *feel* like you're making money, but when you look across the landscape of YouTube businesses – and I won't call anyone out here – it's very, very clear they are losing millions and millions of dollars a year," he wrote.

With its new funding round, Fullscreen at least has a little more runway to figure out how to make its YouTube business take flight.