Walt Disney Company has agreed to buy YouTube channel network Maker Studios for $500 million. Maker, a producer and aggregator of YouTube clips and returning shows, is home to some of the most-watched bloggers and content creators on the platform. Particularly active in gaming channels, many of Maker’s thousands of channels also show fashion and comedy.
The total value of the deal will increase by up to $450 milllion if Maker reaches performance targets, according to Disney. The purchase is subject to regulator’s approval.
The Maker acquisition is the latest in a series of buy-outs of multichannel networks (MCNs) by major broadcasters, and by far the largest yet. In 2013, DreamWorks Animation paid only $33 million to buy Awesomeness.tv, another youth-skewing YouTube producer, although that also came with a performance-related uplift. Also last year, RTL Group bought Broadband TV, Shine Group (part of 21st Century Fox) acquired Channelflip and this year Canal Plus bought French MCN Studio Bagel. Time Warner has previously made investments in Maker and Machinima.
The price is high, and YouTube channel management is not always a high-margin business. But the acquisition gives Disney an audience which it cannot afford to be alienated from. Maker's combined view count, while it can't be directly compared to a TV audience share, is impressive (its own figure is 5.5 billion views per month; PewDiePie, one the top gaming channels under Maker Studios, is currently at 3.9 billion views alone). YouTube's young-skewing content appeals to the same demographic as many of Disney's concerns in movies and cable TV. The ‘zero-sum’ idea, that YouTube is taking away those audiences rather that increasing overall viewing time, is hard to prove - however, this move shows that Disney is not taking any chances.
The 'talent incubation' element forms a second prong to Disney’s strategy. It clearly has plans for the sometimes-chaotic, unscripted DIY ethic of some of Maker's channels. Some examples in the past of leveraging a larger, linear entity include YouTube hits finding life on a cable network (Annoying Orange going to Cartoon Network) or Awesomeness.tv’s long-form show Side Effects, produced with Universal Cable, premiering on YouTube. Forerunners like this show how YouTube talent can grow in a way that feels natural to its online audience, while giving it opportunities that it didn't have while independent.
From the games perspective, this acquisition underscores the importance of YouTube as a platform for connecting with audiences that now goes beyond, say, a first-party social-media campaign plan for disseminating official video assets. Conversations with communities of significant size now reside in the hands of third-parties as much as official channels. YouTube outlets such as PewDiePie, The Yogscast and Total Biscuit arguably command the kind of reach and influence on a par with the biggest franchises in gaming, and thus represent a growing presence with which publishers must collaborate in order to converse with various fan bases.