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DISNEY TO PAY $500 MILLION FOR STRUGGLING YOUTUBE FIRM

March 25, 2014 by · Leave a Comment 

Analysts were puzzling today (Tuesday) over the announcement on Monday that Disney had signed a deal to buy YouTube network Maker Studios for $500 million. While the network reportedly generates 5.5 billion views per month, it is far from profitable. As Peter Kafka at recode.net remarked, “Over the last few years a growing consensus has emerged: YouTube is the best place in the world to find video viewers, but it’s not a great place to build a business.” But in an interview with the New York Times, Kevin Mayer, Disney’s executive vice president for corporate strategy and business development, said, “Maker already has a very large audience that will only keep growing, and that is something that would be hard to build on our own.” Indeed, commented the Times’s media writer Brooks Barnes, Disney is “counting on Maker to help it learn how to best interact with the raised-on-the-Web generation.” If Maker meets certain performance targets, its investors could come away with as much as $450 million more from Disney. In a statement, Disney chief Robert Iger said, “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.”