Why Chimchakman Left His MCN

Chimchakman, Kwaktube, Syuka World, Ppanibottle

In April 2024, Chimchakman left Sandbox Network. After five years under contract, he founded his own company — named "Geumbyeongyeong" after his family members' names. A year before leaving Sandbox, he had purchased a building in Songpa-gu, Seoul for 5.3 billion won (~$4M). In other words, this was not an impulsive decision but a planned departure. In June of the same year, Kwaktube and Ppanibottle left, followed by Syuka World in August. Syuka World posted a brief note on a community board: "I thank Sandbox for their hard work over the past five years." No one voiced conflicts or grievances.

Four mega-creators leaving a company to go independent at the same time is not a coincidence. It is a symbolic event that reveals the MCN business model has reached its limits. And those limits stem not from emotions or relationships, but from cold, rational arithmetic.

The Math Behind MCNs

The basic structure of the MCN business model is remarkably simple. MCNs take a cut of creator revenue — typically 30–50% — and in return handle ad sales, contract management, brand negotiations, and more. Usually one manager handles three to five creators. Exchanging video edits with advertisers, negotiating rates, coordinating schedules, reviewing contracts — this kind of unstructured communication makes up more than half the workload. It is extraordinarily labor-intensive.

Say a manager's annual salary is 40 million won ($30K). If a creator's average annual revenue is 30 million won ($22K) and the commission rate is 30%, the MCN takes 9 million won (~$7K) per creator. If one manager handles three creators, the company can't even cover payroll. With five creators, only 5 million won remains after salary — and once you factor in rent and other overhead, you're back in the red.

The financials of Sandbox Network — Korea's largest MCN — prove this isn't just theory. Based on its 2023 consolidated financial statements, Sandbox reported roughly 69.7 billion won ($52M) in revenue. After subtracting creator payouts and content production costs, the actual money Sandbox kept was 23.2 billion won ($17M). That same year, its personnel costs — salaries, benefits, and severance — totaled 23.3 billion won. Personnel costs exceeded net revenue.

Creators pay over 30% of their income and still don't get adequate support. MCNs collect over 30% in fees and still can't escape losses. This isn't a management failure. It's an insurmountable arithmetic problem.

How MCNs Can Make Money

When you follow the arithmetic, MCNs have only two viable paths to profitability.

First, increase the number of creators per manager. The economics only start to work when a single manager handles ten or more creators. Some MCNs have adopted structures where one manager oversees 10–20 creators. They share common traits: they specialize in nano-to-micro creators who require fewer resources, they offer lighter-touch management, and they abandon low-margin lines of business in favor of focus.

But this comes at a cost. If one manager handles 20 creators, the time spent per creator drops to roughly one hour per week — two at most. Can that really be called full service? Commission rates naturally fall, and the arithmetic collapses in a different way.

Second, manage bigger creators. Instead of managing 100 creators who each earn 30 million won per year, what if you managed 10 creators who each earn 200–300 million won (~$150–220K)? At a 30% commission, each creator generates 60–90 million won for the MCN. That comfortably covers a manager's salary with room to spare.

But here lies the dilemma. A creator earning 50 million won per year pays 15 million won in MCN fees. Hiring a dedicated manager would cost at least 40 million won — so the MCN is a bargain. There's a reason to stay. At 100 million won in annual revenue, the fee becomes 30 million won, and the decision gets harder. At 500 million won? The fee is 150 million won. You could hire three people dedicated exclusively to your business and still spend less than you'd pay the MCN. Staying becomes an act of throwing money away.

The tipping point is roughly 200–300 million won (~$150–220K) in annual revenue. Beyond that threshold, leaving becomes the arithmetically rational choice. Chimchakman, Syuka World, Kwaktube, and Ppanibottle had all crossed that line by a wide margin. When the creators who generate most of an MCN's revenue leave, average creator revenue drops while fixed costs remain constant — deepening losses and creating a vicious cycle.

The Demand Hasn't Changed. The Premise Has.

What does the MCN's 30% actually pay for? Creators plan their own content, shoot it themselves, and edit it themselves. MCNs ride on top of channels that already exist and take 30% in the name of management. The only reason this model could persist was the absence of alternatives — no infrastructure existed for creators to handle all of this on their own. MCNs were beneficiaries of a lack of options, and the 30% was not the price of service but the price of monopoly.

As Chimchakman's departure illustrates — he left Sandbox, incorporated a company, and hired a full team — the sheer volume of work a creator must shoulder as a solo entrepreneur hasn't changed. The desperate demand to outsource that work hasn't changed either. What has changed is the premise that fulfilling that demand requires surrendering 30% of your revenue.