[UPDATE] Microsoft Paying YouTubers To Talk Nice About The Xbox One

UPDATE 3: YouTube personality boogie2988 (also known as ‘Francis’) has made a video explaining how these types of promotions work. Check it out.

UPDATE 2: A Machinima representative contacted Kotaku about the promotion, and provided the following statement:

“We execute large network wide activations routinely and, where part of a promotional campaign, typically require channel partners to include certain language in their video content relating to the promotion. That didn’t happen here and we’re evaluating why. All participants are being asked today to include our standard language going-forward. We apologize for the error and any confusion.”

At least now you’ll know who’s being paid for their content, right?

UPDATE: Microsoft and Machinima issued a joint statement in regards to the Xbox One promotion (via The Verge):

“This partnership between Machinima and Microsoft was a typical marketing partnership to promote Xbox One in December. The Xbox team does not review any specific content or provide feedback on content.  Any confidentiality provisions, terms or other guidelines are standard documents provided by Machinima. For clarity, confidentiality relates to the agreements themselves, not the existence of the promotion.”

A little context makes the world go ’round, yeah? This update makes the Xbox One promotion sound a lot like the EA/Ronku promotions in 2013 (see below), which is more in line with what we expect in a YouTube-specific marketing deal.

Original Story

Microsoft is paying YouTube content creators for talking about the Xbox One, and the fine print in the agreement is leaving many with questions about ethics, disclosure, and the product endorsement relationship.

Reports starting surfacing over the weekend that Microsoft was pushing a new marketing campaign on YouTube — a $3 CPM (that’s three dollars per 1,000 views) for video creators talking about the Xbox One. In order to get some of the extra cash, YouTubers would need to show 30 seconds of Xbox One gameplay, mention that they’re playing the game on an Xbox One, and use the appropriate tag on their video (XB1m13). They would also have to following the guidelines set by Microsoft and Machinima, which is where this starts to get murky.

There’s nothing wrong with promoting products on YouTube — and it’s certainly not a new practice — but a lack of disclosure on the endorser’s part (that is, whoever is making the YouTube video), shines a light on the ethics involved in such a relationship. Disclosure is strictly forbidden in this case, according to the contract that comes from Xbox and Machinima:

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.

It could also infringe on a few FTC regulations, as Ars Technica points out, specifically those regarding “…a connection between the endorser and the seller of the advertised product that might materially affect the weight or credibility of the endorsement.”

I don’t think video creators need to subscribe to the same ethical standards as “journalists,” unless they are referring to themselves as such, but an endorsement disclosure, particularly when there are laws on the books about such relationships, is probably a good idea, yeah?

YouTube endorsements are quickly becoming the norm, with companies like EA regularly paying YouTubers for EA-related videos. According to YouTube personalities familiar with their practices, EA also pays significantly more than Xbox and Machinima — $10-$15 per 1,000 views as opposed to the $3 CPM offered by Microsoft — and its video programs are more frequent. The Battlefield 4 videos you saw last year (before the game was released), uploaded by Battlefield and Call of Duty players and commentators? Many of those were paid for by EA. Many of these videos don’t have any sort of endorsement disclosure, but participants we’ve talked to said EA didn’t bar any sort of disclosure, either — it was completely up to the content creator to disclose if they wanted to.

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6 Comments on [UPDATE] Microsoft Paying YouTubers To Talk Nice About The Xbox One

Judas

On January 20, 2014 at 6:10 pm

Wow,

Microsoft is at it again with their shady and underhanded ways.

They can’t be trusted! No wonder some gaming affiliates downplay that they never get compensation..that’s a lie too.

You can’t believe anything folks. It’s all a sham to waste your time and money.

Goodbye Microsoft. You were once a good company!

Hellz

On January 20, 2014 at 7:04 pm

It is called Advertisement, Nothing wrong with that, if you had business and strategy you would do the same, and find as many was possible to find ways to promote your product. Stupid Gamefront

Loveless

On January 20, 2014 at 7:33 pm

It goes by the affectionate term of “Payolla” it is no different than anything the Music and Movie industry have been doing for the last 3 decades. I Imagine if you look hard enough you will find instances of SONY, SEGA, NINTENDO, hell probably even Phillips, 3DO, Atari, and *GASP* Apple doing it as well over the past couple of decades. Do you really think you keep hearing about that special game, movie, album because it is that good or because it is being payed for by a marketing team? I know it is shocking that someone would pay for press but come on even politicians do this. This is surprising like the sun rising in the east is a surprising story.

james

On January 21, 2014 at 2:01 am

thats nothing new a lot of companies do that to promote there product no big deal

Ron Whitaker

On January 21, 2014 at 5:24 am

I think a couple of you are missing the point here. It’s not the fact that Microsoft paid people for good reviews. That happens all the time with endorsement deals. Where it gets shady is when they bound those folks through a contract that did not allow them to disclose that endorsement. As Devin mentioned in the article, it runs directly counter to FTC regulations for endorsements.

If a YouTuber wants to take an endorsement deal, that’s up to them. They just need to disclose it so that the folks watching their channels are aware that the positive Xbox coverage they are seeing might have a monetary motive as well. If they can’t because of the terms of their contract, well, I think you see the problem.

Loveless

On January 21, 2014 at 8:06 pm

@Ron

It is nothing new, it’s the same thing the Record companies have been doing for decades with the Radio Industry. Play our song and say good things we give you $$ put in a little confidentiality clause to protect both parties while keeping it hush hush and bam, you hear the same song 12 times a day on your local radio. Make a little Indemnity Clause and you put the responsibility on someone else, depending on the format and the contract it might be really easy to bend the law to what you want. This is nothing other than some sly marketing negotiation that people are getting twitchy about. I am sure your company has some very specific contract wording worked out for the people who advertise on your site incase you review one of the games they advertise here. You have to protect your image and make money at the same time. How is that any different? People tend not to read the fine print when they sign something and do not know what things actually mean when they do.

If you take the time to read Exhibit “A” (as mentioned in the above post) you can see that this is nothing untoward and a fairly straightforward contract. People kneejerk when Microsoft or another big company is involved, this isn’t anything to get worked up about.

p.s. The full contract is in the link in the original article, everyone should read it and see if you really understand what it says, it may help you in the future to know what a lot of the terms in a contract are about.