Disney Snaps Up Maker to Court Millennials

Disney this week announced it would acquire Maker Studios, a provider of short-form videos, for at least US$500 million — a number that could go up if Maker meets performance targets.

Maker’s videos account for more than 5.5 billion monthly views on YouTube — it has 380 million subscribers. The company’s content lineup includes popular YouTube channels like Epic Rap Battles of History, Snoop Lion’s WestFestTV and PewDiePie, a Swedish comedian with more than 25 million subscribers. With more than 55,000 YouTube channels, Maker serves as a network for less high-profile names as well.

Those channels could serve as a new way to connect Disney to its audience of millennial YouTube consumers. The company is eager to be in the center of the action as short online videos from platforms like YouTube emerge as one of the most popular forms of media for today’s younger consumers, Disney said.

If Maker can draw those viewers and meet Disney’s performance goals, Disney could add as much as $450 million to the acquisition price.

Making It Count

With short-form online videos emerging as a prime source of entertainment for today’s consumer, this acquisition is a win-win situation for Disney and Maker Studios, said Steve Hawley, principal analyst and consultant at TVstrategies.

“Maker bolsters its lineup with some of the most desirable content in the business, and as a company which has had mixed results online, Disney gets a proven channel to market,” he told the E-Commerce Times. “For a company with the size and leverage of Disney, this is a relatively inexpensive additional path into the consumer’s hands.”

In order to make the most of the acquisition, Disney should utilize all the talent, knowledge and technology that Maker has to offer, said Paul Gillin, social media marketing strategist.

“Disney needs to learn from Maker about creating content for the millennial audience. Disney has not fared well in the game business, and talent like PewDiePie can give them great insight on what drives those young customers,” he told the E-Commerce Times.

“I hope Disney doesn’t see Maker as just another channel [to] push Mickey Mouse and Disney World promos. They need to learn how to connect with these new customers, which is something a company like Maker understands in its DNA,” Gillin added.

That could be a tall order for a company like Disney, said David Dines, principal analyst at ACG Research.

“There are so many things that Disney can do to make the most of the talent, but the underlying mindset behind success would be to listen and be open to new ideas and businesses,” he told the E-Commerce Times. “If Disney is like the typical large company, people are heavily invested in the status quo and groupthink, which nearly always quashes innovation.”

Further Consolidation?

Disney’s acquisition of Maker is a sign of the times, as large media companies reach out to the up-and-coming studios that have figured out how to connect in new ways, said Joost van Dreunen, cofounder and CEO of Super Data Research.

“The way audiences consume media today is different, and media companies are best served by adjusting their strategy,” he told the E-Commerce times. “This acquisition is part of a larger industry consolidation as brands and media firms are trying to reconnect with their target demographics.”

If Disney can effectively use Maker’s talent and resources as a pipeline to those target demographics, it could open up entertainment and media platforms way beyond YouTube, van Dreunen added.

“All at once we’re seeing e-sports, online game play videos and user-generated content emerge as important hubs for next-generation digital consumers,” he pointed out. “It only makes sense for Disney to claim a stake.”

Rachelle Dragani is a freelance reporter based in Brooklyn, NY. She enjoys staying on top of e-commerce deals, reporting on what new gadget is coming your way, and keeping tabs on anyone trying to hack into your info. Feel free to e-mail her at [email protected]. You can also connect with her onGoogle+.

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