Yeah1 unable to salvage content-hosting contracts with YouTube

By Phuong Dong April 1, 2019 | 11:02 pm PT

Yeah1 has failed to salvage its MCN partnership with Youtube. Photo by Shutterstock

YouTube’s termination of its relationship with Yeah1 and all its multichannel network subsidiaries took effect on March 31.

Speaking to VnExpress, a Yeah1 executive confirmed that the Vietnamese digital media company had been unable to convince YouTube not to cancel its content-hosting service agreements (CHSA) licenses.

Yeah1 and its subsidiaries will no longer be multi channel network (MCN) partners. With 6.9 billion monthly views Yeah1 had been the third largest MCN in the world, according to Bloomberg.

An MCN acts as an intermediary connecting creators of video content and YouTube. Content creators in return receive benefits such as copyright protection, income tax support, access to IP licensed contents to develop new products, and optimized advertising.

A CHSA is the license for a partner media company to earn from third-party businesses that run ads on channels.

Yeah1 recently notified the Ho Chi Minh City Stock Exchange (HOSE) that it was prepared for termination, and would focus on its organic channels on YouTube.

Nguyen Anh Nhuong Tong, Yeah1 chairman, reassured shareholders that termination of the MCN status would only affect the company’s ability to select and manage channel partners and third-party adverts. This had contributed VND23 billion (nearly $1 million) last year, equivalent to about 13 percent of profit after tax.

Other revenue sources such as direct sales and B2B cooperation for content production remain normal, he said.

YouTube Inc. had announced it was canceling Yeah1 Group’s CHSA after Thailand’s SpringMe. Ltd., in which the Vietnamese company owns almost 17 percent, was involved in an incident that violated YouTube’s policies. The company did not elaborate.

The YEG stock fell for 13 consecutive sessions, from VND245,000 ($10.53) to VND95,700 ($4.19), and its market capitalization reduced by more than half in less than a month.

The company has made a bid to buy back 3.12 million of its shares, equivalent to 10 percent of its capital, and is awaiting approval from the State Securities Commission. It currently trades at VND102,600 ($4.41).

The company recently sold U.S.-based ScaleLab, just two months after buying it. ScaleLab connects creators of video content and YouTube.

Founded in 2006, Yeah1 is Vietnam's largest MCN ecosystem, operating TV channels, movie studios, YouTube networks, and digital news. It was also the first media company to go public, listing on HOSE last June.