For those that don’t know, Microsoft owns Machinima, a site that hosts several networks which produce machinima. Machinima, as in the genre, are stories made from games. Think Red v. Blue made with Halo.
Here was the issue: Machinima paid video creators to feature and say nice things about Xbox One. However, there was a lack of disclaimers that the views in the videos belonged to Machinima, not from the video creator.
Ok. What’s the big deal?
The FTC views this practice as “deceptive,” obviously. But wouldn’t you take some money to a promoter? Well, before you say yes, here’s the difference: Viewers reached the conclusion that the opinions within the video were genuine and independent of promotional influence.
The viewers were unable to distinguish what was opinion and what was an advertisement.
In the settlement, Machinima promised to disclose any monetary transaction between them and the video creator in the future. If the maker of a video creates a video and receives money for it, they now must give that information to the viewer.
