×
You will be redirected back to your article in seconds

Machinima Ceases Operations, Lays Off Virtually Entire Staff After Merging With AT&T’s Otter Media (EXCLUSIVE)

UPDATED: Machinima may not be officially 100% dead, but that might just be a matter of semantics.

The nearly 20-year-old digital-media brand dedicated to gamer and sci-fi culture — which once operated one of the biggest channels on YouTube — laid off 81 staffers two weeks ago at its Burbank, Calif., headquarters, according to documents obtained from California’s Employment Development Department. That represents the majority of the team that was left at Machinima, which last reported having about 100 employees.

A “select number of Machinima employees” remain with the company, and Machinima is now “actively providing services to supercharge the combined portfolio of Otter Media,” a spokeswoman for Machinima said in a statement to Variety. “Machinima has ceased its remaining operations, which includes layoffs.”

Russell Arons, who was named GM of Machinima in early 2017, is among the staffers who are still currently employed at Otter. Arons “remains with Machinima and is assisting with transitional activities as she explores new opportunities,” the company rep said.

Machinima’s massive job cuts came after WarnerMedia’s reorganization in December at Otter Media, the digital-video venture that is now fully owned by AT&T. The changes included shifting Machinima from Warner Bros.’s aegis to Otter Media. At the time, Otter Media said the restructuring would result in a 10% staff reduction across the organization.

Otter Media is insisting that Machinima hasn’t shut down. “Otter has brought over valuable parts of the Machinima business that we believe amplify our focus on the gaming and anime community,” it said in a statement.

Otter Media in January migrated the independent creators who had been affiliated with Machinima’s network under Fullscreen’s creator services team, led by GM Beau Bryant. In addition, Machinima’s premium-content team joined Otter Media’s Rooster Teeth “as a catalyst for strategic expansion into a premium studio, and their social team supports Rooster Teeth’s existing news brand ‘The Know’ and gaming groups ‘Achievement Hunter’ and ‘Funhaus,'” the representative said.

For all practical purposes, Machinima will no longer be a consumer-facing brand. The cuts come as Machinima — without warning — last month changed all of the videos on its YouTube channel private, rendering them inaccessible, as first reported by Kotaku. Machinima had once boasted 2 billion video views monthly, reaching more than 200 million unique viewers.

The latest layoffs gutted the group, which once had more than 200 employees. Machinima permanently laid off a total of 81 employees, with a termination date of March 16, according to a notice filed under California’s Worker Adjustment and Retraining Notification (WARN) Act, which requires at least 60-day advance notice of mass layoffs. A source familiar with the situation said the mandate for the Machinima cuts came from WarnerMedia’s top brass.

Founded in 2000 — five years before YouTube first appeared — Machinima had adapted over the years to the evolving digital-video landscape, with varying degrees of success. It was one of the first YouTube-centric multichannel networks, aggregating content from multiple creator partners. At one point, Machinima had content partnerships with a range of companies, including Amazon Prime Direct, Xumo, Sony PlayStation Vue, Facebook Watch, and Twitch  in the U.S. and others internationally.

Warner Bros. acquired full control of Machinima in November 2016, and put Machinima under its Warner Bros. Digital Networks group. AT&T closed its $85 billion deal for Time Warner in June 2018 and since then has consolidated or killed off several digital businesses. Under AT&T’s ownership, WarnerMedia shut down FilmStruck, from Turner and Warner Bros. Digital Networks, and WBDN’s DramaFever. In addition, Turner shuttered its Super Deluxe studio.

The effective dissolution of Machinima and the shutdowns of other digital initiatives come as WarnerMedia is concentrating investments into a company-wide direct-to-consumer subscription service. Pegged for a fourth-quarter 2019 launch, the yet-to-be-named SVOD service will encompass content from Warner Bros., HBO and Turner as well as third-party suppliers. WarnerMedia’s streaming service will be available in three tiers and will include some advertising, AT&T execs have said.

Janko Roettgers contributed to this report.

More Digital

  • hdhomerun roku app

    HDHomerun App Brings Live TV to Roku Devices

    Roku users are getting another way to watch live television with the help of their favorite streaming devices: Silicondust, maker of the HDHomerun TV tuners, has released a beta version of its HDHomerun app for Roku TVs and streaming devices. “We need to start out by saying this is very much a beta product,” the [...]

  • Vox Media

    Vox Media Staff Ratifies First Union Contract, Negotiated by Writers Guild

    Staffers at Vox Media, which includes Curbed, Eater, Polygon, Recode, SB Nation, The Verge and Vox.com, have ratified their first collective bargaining agreement with more than 90% in support. The staffers are represented by the Writers Guild of America East. Vox Media’s 350-member unit began bargaining their first contract in April 2018. The campaign to [...]

  • Joslyn Davis, Lily-Marston - Shared Media

    Clevver’s Joslyn Davis, Lily Marston Launch Their Own YouTube Media Venture (EXCLUSIVE)

    Here’s the latest chapter in the saga of Clevver, the entertainment/lifestyle YouTube network marooned by the shuttering of former parent Defy Media and subsequently snapped up by Hearst Magazines. Two of the principal creatives behind Clevver — Joslyn Davis and Lily Marston — together with Clevver Media co-founder Jorge Maldonado have launched Shared Media, their [...]

  • Money-Diaries-Refinery29

    Refinery29 to Produce Interactive Series Funded by Eko (EXCLUSIVE)

    Refinery29 has been bitten by the “Bandersnatch” bug. The millennial-female-focused digital media and entertainment company inked a pact with Eko, an interactive-video platform developer whose backers include Walmart, to produce several “choose-your-own-adventure”-style series based on Refinery29 content properties. The companies have started development on their first project: an interactive scripted adaptation of Refinery29’s popular “Money [...]

  • Dan Howell

    YouTube Star Dan Howell Comes Out as Gay: 'It Gets So Much Better'

    It’s Pride Month, and popular YouTube vlogger Dan Howell had a message for fans that he’d been working on for a year: “Basically, I’m Gay,” he shared in a video Thursday. In the 45-minute video, Howell discussed coming to terms with his sexual orientation and his thoughts on labels that people use to define themselves [...]

  • Netflix Expands Korean Content Commitment

    Netflix Expands Korean Content Commitment as Industry Deepens

    Global streaming giant, Netflix is expanding its involvement in the Korean film and TV industries by greenlighting several new shows and renewing others. “When we started three years ago, we had a high degree of confidence that Korean drama would work well in Asia, but we had no internal metrics of our own,” Korean content [...]

  • Instagram Logo

    Instagram Outage: Facebook’s Photo Sharing Service Went Down For Multiple Hours

    Instagram faced another major outage Thursday afternoon, with users from around the world reporting that they weren’t able to access Facebook’s photo sharing service via its app and website. An Instagram spokesperson told Variety around 5pm PT that the issue had been resolved: “Earlier today, a technical issue caused some people to have trouble accessing [...]

More From Our Brands

Access exclusive content