Microsoft Reportedly Paid Machinima YouTube Creators for Positive Xbox One Mentions

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  • Microsoft Reportedly Paid Machinima YouTube Creators for Positive Xbox One Mentions

    Here I am unable to even get an Xbox One from Microsoft because the "Xbox One hardware is limited" and they "aren't able to accommodate additional requests at this time." I guess perhaps I should have just partnered with Machinima because Microsoft has all the resources in the world ready for them.

    Yes, my bitter self was pleased to see that Microsoft is reportedly offering Machinima partners an additional $3 CPM ($3 per thousand video views) if they post videos featuring Xbox One content. Not only that, but there was another campaign that offered an additional $1 CPM for videos that promoted "the Xbox One and its release games" before this latest promotion.

    To qualify, partners had to post a video that had at least 30 seconds of Xbox One footage, mention the Xbox One by name, and include a tag of XB1M13. According to Arstechnica, a search of that term turns up over 6,590 video results.

    But wait, it gets better!

    It's one thing to reveal to your viewers if you're accepting freebies from a company. I try to do this with review copies and other promotional items that sometimes find their way to me. I'm also not typically restricted in what I am allowed to say when it comes to review units. It's also, you know, part of the FTC's guidelines to disclose any endorsements. In this case, however, Microsoft's full legal agreement with the partners said that the partners "may not say anything negative or disparaging about Machinima, Xbox One, or any of its games."

    Yes, if they wanted some of those sweet YouTube and Microsoft dollars, they had to play nice or they got nothing at all.

    So how much was actually paid out by Microsoft? Microsoft reportedly only agreed to pay the first 1.25 million views for the promotion, meaning they only had to pay out $3,750 to Machinima partners. How much Machinima themselves received is another mystery entirely. This also means that after those initial views, those Machinima partners that put up a video after those initial views were met, just gave Microsoft free promotion for nothing in return.

    The full agreement can be found below or over at Pastebin.

    Spoiler: 
    XBOX ONE RELEASE VIDEO CAMPAIGN AGREEMENT
    As of today’s date, You (hereinafter “You” or “your”), have agreed to work with Machinima, Inc. (“Machinima”) to promote the Xbox One Gaming Console (“Xbox One Release”) on your main channel on YouTube.com ("Your YouTube Channel") in accordance with the terms and conditions set forth in this agreement (the “Agreement”).
    1. PROMOTIONAL CAMPAIGN PERIOD AND ELIGIBILITY.
    Machinima’s promotional campaign of Xbox One Release (the “Campaign”) shall commence on January 13, 2014 at 12:00am PT and end on February 9, 2014 at 11:59pm PT (the “Campaign Period”). The Campaign is open only to Machinima Channel Affiliates, who are thirteen (13) years of age or older (Machinima Channel Affiliates who are thirteen (13) to seventeen (17) years of age at the time of signature of this Agreement must receive written permission from his or her parent or legal guardian in accordance with the terms herein prior to participating in this Campaign). A “Machinima Channel Affiliate” is a person or entity that has signed and valid Machinima Channel Affiliate/Partner Agreement (“Affiliate Agreement”), incorporated herein by reference, which includes Your YouTube Channel within the Machinima network and such Machinima Channel Affiliate is neither in breach nor default under such Affiliate Agreement.
    2. PROMOTIONAL REQUIREMENTS.
    Machinima shall consider You active in this Campaign upon Machinima’s receipt and approval of this Agreement by You by clicking the box as indicated and if You are 13 – 17 years of age, upon receipt and acceptance of You and Your parent’s or legal guardian’s signature must also be included below.
    Your role within the Campaign is focused on driving awareness for Xbox One Release, which includes the release of the video games available for the Xbox One Console (the “Games”).
    3. DUTIES.
    (I) Your specific duties shall be to promote the Xbox One Release, as described below.
    (II) You shall perform the following “Promotional Requirements” during the Campaign Term:
    a) Campaign Videos: Create at least one (1) or as many video(s) as You desire, with minimum running time of sixty (:60) seconds, in which You provide commentary about Xbox One Release and Games (each a “Campaign Video”). The Campaign Videos shall be uploaded and viewable on Your YouTube Channel, and nowhere else, during the Campaign Period. The Campaign Video shall include:
    - You Campaign Video is “Tagged” with the following tag “XB1M13” (“Campaign Tag”). The Campaign Tag must not be modified in any way and Campaign Videos that do not incorporate the “XB1M13” tag in their tag section will not be eligible for the Compensation (as defined below) under this Agreement.
    b) Campaign Video Guidelines: As part of the Campaign Videos, You must comply with the following guidelines for this Campaign:
    1. Do not post any Campaign Videos until January 13 at 12:00am PT;
    2. You may not say anything negative or disparaging about Machinima, Xbox One or any of its Games in your Campaign Video;
    3. You must feature at least thirty seconds (:30) of gameplay/footage of any Xbox One game within the first 2 minutes of Campaign Video
    4. You must verbally mention that you are playing the game shown on the Xbox One console.
    5. Campaign Video(s) must annotate to the Xbox One YouTube channel www.youtube.com/xbox, or another Campaign Video on Your YouTube Channel that is part of this Campaign;
    6. Do not use third-party music or third party content in your Campaign Video, that You don’t own the rights to such music or content or have not be properly licensed by You
    7. Do not use excessive inappropriate language or profanity in your Campaign Video;
    8. Each Campaign Video must have a minimum running time of at least sixty (:60) seconds in length; and
    9. Your Campaign Videos must comply with the YouTube Community Guidelines located at http://www.youtube.com/t/community_guidelines; and
    10. If You are 13 – 17 years of age, You must upload a copy of this Agreement signed by You and Your parent or legal guardian along with each Campaign Video in order to participate in the Campaign.
    4. COMPENSATION.
    As compensation for the promotion that You are providing, You shall be paid the consideration of One U.S. Dollar ($3.00) CPM (“CPM Compensation”) for every valid View (as the terms View” is defined in your existing Affiliate Agreement with Machinima, including all the terms thereof, are incorporated herein by reference) of each Campaign Video that complies with the Promotional Requirements set forth above, subject to the “Campaign Cap” (as defined below). “CPM” means cost per thousand views of Campaign Video on Your YouTube Channel, other than views generated by Action Fraud (as defined below). You will be paid within 45 days after the close of the Campaign Period upon Machinima receipt of a signed W-9 or W-8BEN form, if requested. You agree to be paid as an independent contractor and You agree to be solely responsible for payment of any income, sales or use tax(es) or other payment(s), which may become due to any state or federal authority. You acknowledge and agree that Machinima has the right to offset any amounts owed to You under this Agreement against any amounts owed by You to Machinima under any other agreement, including but not limited to Your Affiliate Agreement.
    The budgetary Views “cap” for the entire Campaign is 1,250,000 Views among all U.S. and international participants in the Campaign (the “Campaign Cap”). Machinima will notify You via e-mail if and when the Campaign Cap is reach, and at that point the Campaign will be terminated as of the date of such notification (“Early Termination Date”), and You will not receive the CPM Compensation for Views received for your Campaign Video(s) beyond such Early Termination Date; however You will continue to receive your standard payment under your Affiliate Agreement. However, if the Campaign Cap is not reached during the Campaign Period, then the Campaign will automatically end on the final date of the Campaign Period (i.e., February 9, 2014 at 11:59pm PT).
    5. CONFIDENTIALITY
    You agree to keep confidential at all times all matters relating to this Agreement, including, without limitation, the Promotional Requirements, and the CPM Compensation, listed above. You understand that You may not post a copy of this Agreement or any terms thereof online or share them with any third party (other than a legal or financial representative). You agree that You have read the Nondisclosure Agreement (attached hereto and marked as Exhibit “A”) and You understand and agree to all of terms of the Nondisclosure Agreement, which is incorporated as part of this Agreement.
    6. DISCLAIMERS.
    If You fail to perform any of the Campaign elements outlined earlier in a timely and professional manner or breach any obligation or requirement of this Agreement, Machinima may terminate this Agreement, at any time and in Machinima’s sole discretion, and allocate any remaining budget to other partners.
    If Machinima suspects or determines that You are driving Views as the result of Action Fraud, and/or fail to make Campaign Videos in compliance with this Agreement, Machinima can immediately terminate this Agreement, in its sole discretion and You will be barred from participation in future campaigns. “Action Fraud” means so-called "click fraud" or "impression fraud,” or fraud of any other kind, whether in any automated or human way, including, without limitation, by the use of a person, an automated script or a computer program (for example, online robots or "bots") to click or otherwise activate any form of View, response mechanism, annotation or advertising unit, or any other fraudulent means, to increase Views, impressions, skew results or imitate a legitimate user of a web or mobile browser or other software application for viewing on any device, for example, by clicking on an ad unit for the purpose of generating an improper click value and generating revenue.
    You acknowledge that Machinima shall have to sole right and authority to review each Campaign Video that You make for this Campaign for quality control and compliance with the terms hereof and Machinima has the authority, in its sole discretion, to take down such Campaign Video(s) from Your YouTube Channel or require You to edit any Campaign Video which has content that is not in compliance with this Agreement.
    You understand that Machinima is offering this promotion to You by and through a technical platform owned and operated by Poptent, Inc. and licensed by Poptent, Inc. to Machinima for specific, limited use. You agree to be bound by the Terms of Use and Privacy Policy posted on www.poptent.com. You hereby understand and agree that: (i) Poptent, Inc. will have no liability in connection with Your use of the technical platform or Your participation in the promotion; and (ii) Your sole recourse for liability as a result of or in any way related to, this promotion, if any, is as against Machinima. Notwithstanding anything to the contrary contained herein, You may seek recourse for liability against Poptent in the event that: (i) Poptent breaches the Poptent Terms of Use or Privacy Policy; or (ii) Poptent fails to timely provide the applicable payment due to You in connection herewith; provided that such failure by Poptent occurs only after Machinima has delivered the applicable funds for third-party payments to Poptent and provided all information as Poptent may reasonably require (e.g., the relevant Paypal account information) in order to fulfill any such payment obligation.
    This Agreement is personal to You, is non-assignable by You, and may be modified or waived only in writing signed by all Parties. If any provision of this Agreement is found to be unenforceable, such provision will be limited or deleted to the minimum extent necessary so that the remaining terms remain in full force and effect.
    THE AGREEMENT IS GOVERNED BY, AND WILL BE CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA, AND THE UNITED STATES OF AMERICA AND THE FORUM AND VENUE FOR ANY DISPUTE SHALL BE IN LOS ANGELES, CALIFORNIA. IF THE CONTROVERSY OR CLAIM IS NOT OTHERWISE RESOLVED THROUGH DIRECT DISCUSSIONS OR MEDIATION, IT SHALL THEN BE RESOLVED BY FINAL AND BINDING ARBITRATION ADMINISTERED BY JUDICIAL ARBITRATION AND MEDIATION SERVICES, INC., IN ACCORDANCE WITH ITS STREAMLINED ARBITRATION RULES AND PROCEDURES OR SUBSEQUENT VERSIONS THEREOF (“JAMS RULES”). THE JAMS RULES FOR SELECTION OF AN ARBITRATOR SHALL BE FOLLOWED, EXCEPT THAT THE ARBITRATOR SHALL BE EXPERIENCED AND LICENSED TO PRACTICE LAW IN CALIFORNIA. ALL PROCEEDINGS BROUGHT PURSUANT TO THIS PARAGRAPH WILL BE CONDUCTED IN THE COUNTY OF LOS ANGELES. THE REMEDY FOR ANY CLAIM SHALL BE LIMITED TO ACTUAL DAMAGES, AND IN NO EVENT SHALL ANY PARTY BE ENTITLED TO RECOVER PUNITIVE, EXEMPLARY, CONSEQUENTIAL, OR INCIDENTAL DAMAGES, INCLUDING ATTORNEY’S FEES OR OTHER SUCH RELATED COSTS OF BRINGING A CLAIM, OR TO RESCIND THIS AGREEMENT OR SEEK INJUNCTIVE OR ANY OTHER EQUITABLE RELIEF.
    This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Signatures by facsimile, electronic signature (e.g., DocuSign) and/or scanned/emailed original shall be deemed original signatures.
    (signature page follows)
    By clicking the “I agree” button below signing below, You agree and acknowledge that: (i) You are eighteen (18) years of age or older (or if 13-17 years of age, agree to comply with the requirements set forth herein with regard to parental consent); and (ii) You have read and agree to all the terms above and in the Nondisclosure Agreement, attached hereto and incorporated herein by reference.
    CLICK “I AGREE” TO ACCEPT THIS AGREEMENT.
    IF YOU ARE UNDER THE AGE OF EIGHTEEN (18) OR IS OTHERWISE DEEMED A MINOR OR INCAPABLE OF ENTERING INTO A BINDING CONTRACT UNDER APPLICABLE LAWS, SIGNATURE BY A PARENT OR AUTHORIZED GUARDIAN WITH THE LEGAL AUTHORITY TO BIND YOU IS REQUIRED, BELOW, IN ADDITION TO YOUR SIGNATURE:
    I represent and warrant that I am a legal guardian of
    (print minor’s name here) ___________________________ and acknowledge that I have read the foregoing Agreement and attached Nondisclosure Agreement and am familiar with each and all of the terms, covenants and conditions contained therein; I am satisfied that said Agreement and attached Nondisclosure Agreement are fair and equitable, and I hereby give my express consent to the execution thereof and will not revoke my consent thereto at any time hereafter.
    Print Name of Parent/Guardian: _________________________ Signature: __________________________
    Date: _______________________
    CONFIDENTIAL
    EXHIBIT “A” NONDISCLOSURE AGREEMENT
    In connection with a proposed business relationship, Machinima, Inc. (hereinafter “Company”) have allowed You (the individual or entity named in the Agreement attached hereto) access, or may allow You access, to business, technical or other information, materials and/or ideas regarding Company’s business practices (“Proprietary Information,” which term shall include, without limitation, anything You learn or discover as a result of exposure to or analysis of any Proprietary Information).
    In consideration of any disclosure and any negotiations concerning the proposed business relationship, You agree as follows:
    You will hold in confidence and will not possess or use (except as required to evaluate the proposed business relationship) or disclose any Proprietary Information except information You can document (a) is in the public domain through no fault of yours, (b) was properly known to You, without restriction, prior to disclosure by Company or (c) was properly disclosed to You by another person without restriction. You will not reverse engineer or attempt to derive the composition or underlying information, structure or ideas of any Proprietary Information. The foregoing does not grant You a license in or to any of the Proprietary Information.
    If You decide not to proceed with the proposed business relationship or if asked by Company, You will promptly return all Proprietary Information and all copies, extracts and other objects or items in which Proprietary Information may be contained or embodied.
    You will promptly notify Company of any unauthorized release, disclosure or use of Proprietary Information.
    You understand that this Agreement does not obligate Company to disclose any information or negotiate or enter into any agreement or relationship. You will strictly abide by any and all instructions and restrictions provided by Company from time to time with respect to Proprietary Information or Company systems. You will ensure the security of any facilities, machines, accounts, passwords and methods You use to store any Proprietary Information or to access Company systems and ensure that no other person has or obtains access thereto.
    The terms of this Agreement will remain in effect with respect to any particular Proprietary Information until You can document that such Proprietary Information falls into one of the exceptions stated in Paragraph 1 above.
    You acknowledge and agree that due to the unique nature of the Proprietary Information, any breach of this agreement would cause irreparable harm to Company for which damages are not an adequate remedy, and that Company shall therefore be entitled to equitable relief in addition to all other remedies available at law.
    This Agreement is personal to You, is nonassignable by You, is governed by the internal laws of the State of California and may be modified or waived only in writing signed by both parties. If any provision of this Agreement is found to be unenforceable, such provision will be limited or deleted to the minimum extent necessary so that the remaining terms remain in full force and effect. The prevailing party in any dispute or legal action regarding the subject matter of this Agreement shall be entitled to recover reasonable attorneys’ fees and costs.
    By signing the Agreement attached hereto, You are agreeing to all of the terms of this Nondisclosure Agreement, above.
    Also, don't forget that Machinima is one of many affiliate based networks on YouTube. If it's happening with them, it's more than likely happening with others.

    • CptainCrunch
      #1
      CptainCrunch commented
      Editing a comment
      Yeah, this is pretty big news right now.

      Last week there was a blow up on twitter towards a number of Youtube channels for promoting BF4 as well as they did. Some even claimed that they knew that BF4 was a mess and kept quiet about it. Then this comes out, so even if everything that was said last week isn't true, it adds credibility for it to be so.

      Anymore I guess all you can do is follow those that you like and have similiar tastes and gets friends opinions, otherwise you may be getting a marketing ploy instead.

    • K-16
      #2
      K-16 commented
      Editing a comment
      Worth noting that Arstechnica mentioned the campaign ended on January 16th, so it looks like they already hit their viewer count goal. Too bad for those hoping to join in before Feb 9th. It seems there's some confusion amongst the internet as to what the issue actually is. Many are saying YouTubers are getting a bonus to do what they are already doing, and that there are no ethical issues with the participation of this campaign.

      I don't think they realize the problem we're seeing is how the participation was kept in secret, and how participants are not allowed to criticize the Xbox One and its games for any flaws and issues they run into. What's truly ironic about this, is that Microsoft has done another YouTube campaign in the past, and they did it the right way that time with the Summer of Arcade 2013. How could they get it right the first time, and get it wrong the second time? And what's with the slap to the face compensation to Machinima partners, aka the actual people who made the videos?

      I'm also listing several more examples below (and explained how Summer of Arcade 2013 was done right), but will be using spoiler tags, because I had no idea I had so much to say. The wall of text is painful to read so I'll hide it for those who aren't interested.

      Spoiler: 
      • Nintendo hired Brand About Town to run a campaign for YouTubers to get a free Nintendo Wii U Deluxe Edition and several launch titles in return for videos produced within a relatively short period. There is also a contest to make some sort of video (skit, music video, etc.) promoting the Wii U. Winners will be flown to the Sundance Film Festival. If I recall correctly, the winners also have to make another video to compete against other winners at the Sundance Film Festival, for the best Nintendo video based on randomly chosen conditions as a challenge. (This is similar, but not the same challenge as the one HAWP won, which happened much more recently than my example.)
      • Nintendo also has YouTubers gather around a fake potluck dinner party in "Play With Your Food," where YouTubers contribute a dish or drink based on the theme of the game in question. They chat about the memorable portions of the game and take a few bites and sips until enough footage is recorded to post it on Nintendo's YouTube channel.
      • Microsoft ran an Xbox Live Summer of Arcade 2013 campaign for YouTubers to make a video (mostly reviews) with the free games they received... As you may have noticed, this is not the first marketing campaign with YouTubers by Microsoft.
      • Sony hired Zipatoni to make a fake blog and viral videos to advertise the PSP. Needless to say, nobody was convinced and had brains to check the domain registration. It was apparently too "funky fresh" for anyone to listen to a 35 year old man rap about convincing parents of a friend to buy a PSP.

      So these examples show the big three console manufacturers were involved with online marketing in one way or another. So what's the difference here?
      • Brand About Town allows disclosures of their involvement, where every YouTuber has written in the descriptions that they have received compensation for producing this video. Some were more specific and simply claimed the console and games were all they received. Unknown if review videos allowed disparaging comments, but I did notice none of the games scored anything above 8/10. As for the contest also run by Brand About Town, this can be argued that it's unethical for YouTubers to be making commercials for Nintendo's Wii U, because that's what it is. However, nobody really made a big stink over this because they're not review videos (the challenge was to make a commercial through a skit, music video, etc.), and disclosures were given in the descriptions, while contest details were publicly available from Brand About Town.
      • The videos were filmed and editted by Nintendo video staff and hosted on Nintendo's YouTube channel. Nintendo also provided the location for the "dinner party" to take place. Quite frankly, nobody was hiding the fact that it's a commercial, and it's not meant to be treated as a YouTuber's hampered ability to review the product, since no review was actually taking place. If they did review the game though, I would assume it would receive a high score, so as a personal choice, I would watch a review elsewhere for that specific game only.
      • YouTubers put a disclosure in the descriptions stating they received Xbox Live Arcade games for free in return that they make videos about them within a relatively short period. There were also no conditions on how you can present your opinions of the games. Some people didn't even notice those reviews were sponsored from a campaign, because it was consistent with the YouTuber's usual independent work.
      • Sony and Zipatoni had to apologize for their deceptive marketing practices. Quite frankly, what they did was wrong in trying to trick us into following a fake blog and fake viral videos. This isn't the same as an alternate reality game (ARG) masquerading as a fake website. That's a meta-game and isn't trying to trick you, since the truth is always reveal upon completion of the game. This was a flat out lie in hoping we're too stupid to know a marketing firm is pretending to be kids convincing parents to buy a PSP, and trying to entice us into buying our own while they were at it. And without any footnotes or disclosures on what is really going on, the only way you would know this was a marketing firm was to check the domain registration. Or rethink how old kids can look.


      So my main point is, it's perfectly fine to receive compensation from those who requested their products to be reviewed. There are no ethical concerns regarding that. It's also mostly fine to receive compensation to endorse a product and still review the product; it'll make me question your objectivity, since I doubt you'll bash a product that you're also advertising, but that's still fine in an awkward way (like the Nintendo Challenge or Play With Your Food videos for example). What isn't fine, is if you never tell me what is going on behind the scenes. What isn't fine, is if you are agreeing to never criticize a product for its flaws. I want disclosures, and I want you to be able to express an opinion in the same way as if you bought the product yourself.
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