The Walt Disney Co.’s decision to pay $500 million to acquire Maker Studios is a big step up by Disney to get itself deep into the YouTube content creation business.
In fact, it probably is a more important deal for giant Disney than it is for Maker Studios, even though Maker is an uber YouTube land holder, with 55,000 channels, 380 million subscribers and 5.5 billion views a month.
Those are the kinds of numbers that just roll out there without much comment in the digital universe because YouTube is such an absurdly huge world, and the average content is just a few minutes long.
But it’s also where youth and millennial audiences can be found. While Disney itself has a suite of YouTube outlets, it has nothing like PewDiePie (aka Arvid Ulf Kjellberg), the Swedish gamer whose YouTube franchise has 24 million subscribers alone, and accumulates new subs at a ridiculous rate—like a million every two weeks these days, says TubeFilter. As marketers can tell you—and as Walt Disney could have told you--when teens and young adults like something, they do it with a vengeance.
YouTube content creation is not like anything in Burbank—a channel can be added to the family with just a work up with the content management system folks, in seven to 10 days. There are no
focus groups, I'd guess. Typically, users produce their own stuff, or next to it, but that’s up to them. A few weeks ago PewDiePie told his followers he was going to cut back his production to
oh, maybe four videos a week.
“I want YouTube to be YouTube,” he said on his video. “I’m just one guy and I still manage somehow.”
Whistle-while-you-work is a tune Disney likes to hear.
Maker gives tech help and provides sophisticated analytics, of course, and an in-house sales team. But of special interest to Disney, there’s an active merchandising arm that Disney ought to quickly start flexing. Maker has a stable of vloggers, colorful characters all, like Dodger, the top female gamer and GloZell, a comedian/musician with a penchant for green and such YouTube-worthy songs as “Pick Up After Your Dog.”
Disney said the price tag could be increased by $450 million if Maker revenues reach other incentive-tipping points.
It’s not like Maker is operating out of the back of a car, even if some of its stars sometimes come off like that. Before Disney got there, Variety reports, Maker already attracted $70 million from investors that include Time Warner Investments, Elisabath Murdoch, M+C , the investment company for media moguls John Miller and Jimmy Yaffe; producer Jon Landau, Canal Plus, and the government of Malaysia’s strategic investment fund (sounds dangerous, that one) .
The Disney acquisition at first makes you think, wow, look how Disney could turn these vloggers into stars on ABC Family, prime time or late-night TV. But more like, it’s how Maker Studio can provide entry and cross-promotion for Disney/ABC brands on YouTube. Or how Disney might smooth the way for Maker channels to migrate away from YouTube to their own, well-supported place online, where their YouTube overlords wouldn’t get a cut of the take.
“Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,” said Robert A. Iger, chairman and CEO, in a statement. Indeed, it would seem Disney is buying a key to a new magic kingdom where it doesn’t speak the language.
That’s what Dreamworks was buying last year when Jeffrey Katzenberg crashed YouTube’s upfront party to announce his studio was acquiring YouTube fave AwesomenessTV for $33 million, and a satchel of incentives that could drive the price even higher. Better and easier to buy a giant than try to create your own.