Disney buys YouTube network Maker Studios for $950m

01/04/2014

Disney has bought YouTube network Maker Studios in a $950m deal that sees the iconic movie studio make a significant step towards a digital future.

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The $500m acquisition gives Disney stewardship over the network’s 380m subscribers, 5.5bn monthly views and existing stable of 55,000 YouTube channels. Another $450m could yet be added to the price should Maker hit its growth targets.

Maker Studios partners with YouTube video creators on 55,000 different channels that cover a wide range of topics, from video games to sports to fashion- including on of YouTube's most popular channels: PewDiePie.

In exchange for providing technical, financial and promotional support, Maker collects a portion of the ad revenues for videos that are posted in its network.

Details on the Makers financial performance are closely guarded, but it has grown considerably in the past year, from 2 billion YouTube views per month in late 2012 to 5.5 billion currently.

Disney securing a digital future?

While the deal is small compared to Disney’s $4 billion purchases of Lucasfilm and Marvel, the deal could be a much more significant investment in the studios long term future, and marks a step away from traditional entertainment distribution channels.

It also follows acquisitions of social networks Club Penguin and Playdom in previous years.

“Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the centre of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,” Disney chairman and CEO Rober Iger stated.

Disney’s corporate strategy executive VP Kevin Mayer added to Reuters: "This gives a presence online to reach the millennial group that is increasingly getting its video online and it gives us a lot of data to help promote our other businesses to them."

PewDiePie- More popular than One Direction

One of Maker Studios biggest content partners is PewDiePie, a Swedish gamer who shares playthroughs and comic skits on his own channel. Last year PewDiePie beat the likes of Miley Cyrus and One Direction to become YouTube’s most watched star in H2 2013.

Watch a sample of his latest work below, reviewing upcoming PC game Goat Simulator:

Research firm GlobalWebIndex found in 2013 that 87% of 16-24-year-old internet users in the UK had visited YouTube in the past month: an audience of 5.22 million people.

Now, Disney will have direct access to Maker’s viral stars and its 380 million YouTube subscribers. Maker will not be incorporated into Disney’s gaming operations and will instead report directly to CFO James Rasulo.

Maker chairman and CEO Ynon Kreiz will continue to run the network, and said of the deal: “Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video.”

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