That’s according to CEO Ynon Kreiz of Maker Studios, the online multi-channel network that Disney bought earlier this spring for $500 million (plus the chance to earn out $450 million more). “We did not want to sell the company to Disney initially,” said Kreiz during a “fireside chat” at today’s Vidcon conference and fan festival in Anaheim, Calif. “The conversation started out as a partnership. As the conversation evolved, it became very clear that there was a very strong fit between the companies. It became very clear that we belong to each other.”
Kreiz cautioned that it’s still early given that the deal only closed in March, but the plan is to connect the YouTube creators in Maker’s network (there are tens of thousands of them) with the big entertainment brands that Disney controls, including Star Wars, Marvel, Pixar, ESPN, ABC, Jimmy Kimmel and more. “What we did is bring Disney into the YouTube ecosystem, right through the front door,” Kreiz said. “The idea is to allow our creators to embrace the Disney franchises. This will provide access to our creators, our talent to be part of that ecosystem in working with Disney content.” Read More »
Next Time On Lonny, the satirical online video series executive produced by Ben Stiller‘s Red Hour Digital and Disney-owned Maker Studios, debuts the first three episodes of its second season on Maker.TV and, for today only, YouTube, with a raft of guest appearances by Hollywood notables including Adam Scott, Patton Oswalt, Kal Penn, Jerry O’Connell, Kathy Baker, Haley Joel Osment and Paul Scheer. The entire season is being sponsored by Verizon, with more episodes rolling out twice a week on Maker.TV and Maker’s comedy hub, Nacho Punch. The show is a satire of reality TV, blending sketch comedy and imaginary film preview segments. It was created by Alex Anfanger, who also stars, and Dan Schimpf, who directs. Besides Stiller, Anfanger and Schimpf, executive producers of the show include Stuart Cornfeld, Mike Rosenstein and Debbie Liebling. Brillstein Entertainment Partners represent Anfanger and Schimpf.
Yesterday, reports surfaced that about 10% of the company’s 380 employees had been laid off, part of a continuing restructuring in the fast-changing online-video space. A Maker spokesperson declined to comment on whether any layoffs had occurred, but said, “Maker’s business is constantly evolving, and we routinely reassess our internal resources and make strategic adjustments, reducing staff in some areas while actively hiring in others.” A source close to the company emphasized the company is continuing to hire in some areas of its business. “If there is at any point a reduction, it’s not tied to the Disney acquisition,” the source said. “Maker is in a very healthy place, given the acquisition. It’s aligning its resources to its goals.” Read More »
This is a big day for the online short form video company that Disney’s spending nearly $1B to acquire – Hollywood’s biggest bet so far on the new production platform. Maker Studios stages its first NewFront presentation in NYC today. And Disney CEO Bob Iger talked it up in his earnings call with analysts. “We bought a lot of different capabilities, but mostly distribution” on the YouTube focused business, Iger says. “They also have access to great data and algorithms.” Although the purchase will shave a few cents from Disney earnings for a few years, “there’s a huge marketing opportunity for this company,” he says.
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Disney‘s in the process of spending potentially $1B for Maker Studios, and today’s agreement means that — when the deal closes — it will also indirectly manage YouTube channels and videos from Jukin Media, described as “the world’s leading licensing platform for viral video clips.” It has more than 30 YouTube channels including FailArmy, which has 4.8M subs and specializes in videos of people screwing up. Indeed, one of Maker‘s specific goals is to create a website for “all things FailArmy.” (Please, Disney, don’t turn this into a theme park attraction.) The companies also plan to co-produce shows for both the Internet and TV. “Maker clearly has the best expertise and collection of resources for helping us grow our business and brands both on and off YouTube,” says Jukin CEO Jonathan Skogmo. “This was an obvious alliance for us and we’re very excited to get started.”
While the multichannel YouTube network awaits a big buyout payday, it has signed a deal to create its first scripted drama series. Maker Studios, which last week thwarted Relativity’s acquisition bid weeks after making a deal with Disney potentially worth $950M, has partnered with the fashion/lifestyle brand Nylon. They will create programming for the Nylon TV YouTube channel, starting with Oh, You Pretty Things, starring Francesca Eastwood (watch the trailer below). The 10-episode series follows a lifestyle blogger and her group of twentysomething trendsetters looking to make their big break in the underground music and fashion scene on LA’s Eastside. Sarah Dumont, Tui Asau, Alexander Nifong, Julian de la Celle and Matthew Grathwol co-star. The show will premiere May 19 on Maker’s fashion and beauty channel The Platform.
In this week’s podcast, Deadline Executive Editor David Lieberman and host David Bloom preview what could be a very big day in the history of broadcasting and technology, as the Supreme Court hears legal arguments Monday about Aereo and its business model. The Davids talk about what’s at stake and how it might play out, where broadcasters might go if they lose and whether a win will turn the broadcasting business upside down. They also look over that very messy, and pricey Disney acquisition of online video powerhouse Maker Studios, and examine why ESPN, pay-TV’s most valuable brand, felt compelled to pitch investors that it’s just fine despite competition, cord-cutting and other existential challenges.
Listen to the podcast in your choice of audio formats here:
Deadline Big Media podcast 81 (.MP3 version)
Deadline Big Media podcast 81 (.M4A version)
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UPDATED: Maker says Relativity is too late. The online studio’s deal with Disney “has been approved by Maker Studios’ Board of Directors and the majority of its shareholders and is expected to close in the next few weeks, subject to regulatory approval.” Oh, it also notes that the effort to block he deal in court “was denied today by The Superior Court of California; County of Los Angeles, Central District.” Relativity responds that it “made a compelling offer” and will “continue to aggressively explore future opportunities that align with our strategy to accelerate digital content creation and distribution.”
PREVIOUS, 8:58 AM: Is $1B in stock from Relativity worth more than $950M in cash from Disney? That’s the proposition Relativity is offering online multichannel company Maker Studios today. It sent a letter of intent last night that it says “is superior to the current offer from Walt Disney” that the Maker board accepted last month. The plan developed with help from Jefferies and Barclays includes $500M in Relativity shares, $400M in stock when Maker hits “certain financial milestones,” plus $100M in stock to go to “key talent and executives” who also “are not existing stockholders of the Company.” Relativity says that both it and Maker “are natural partners” because both “share a commitment to challenging the status quo, breaking down old models that don’t work and inventing new ones that do.” Disney believes that the deal it struck with Maker last month — $500M upfront and $450M with milestones — is binding, so we’ll see where this goes.
The proposal does not appear to be directly related to an effort by former Maker execs including co-founder Danny Zapplin to persuade the LA Superior Court to block the deal with Disney. The application for a temporary restraining order wants to put things on hold while the plaintiffs try to demonstrate that current Maker execs are “skimming tens of millions of dollars for themselves by kicking back to the other stock adverse to the common shareholder.” Disney isn’t named as a defendant in the matter. Read More »
Disney’s proposed $500 million plus purchase of Maker Studios may have a problem from the past. The former CEO of the multichannel YouTube network wants a California judge to issue a temporary restring order against the planned vote next week on the big ticket merger. “Permitting the April 15, 2014 vote on the Merger to proceed without requiring additional disclosures would irreparably harm Plaintiffs, as well as Maker shareholders, because it would deprive them of the opportunity to make an informed vote in the Merger,” says the redacted and previously sealed application, filed yesterday in LA Superior Court by co-founder Danny Zapplin and three other former Maker execs. The TRO application alleges that something has to be done before it “will be too late” because current Maker execs are “skimming tens of millions of dollars for themselves by kicking back to the other stock adverse to the common shareholder.” The application to Judge Elihu Berle became public today. Disney is not named as a defendant in the matter.
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UPDATE, 2:35 PM: Nearly two weeks after the first report surfaced about an acquisition of the multichannel YouTube network, the studio made it official today. Disney said Maker Studios shareholders will be compensated to the tune of $550M plus a “performance-linked earn-out” of as much as $450M more. The full release is below the original story.
PREVIOUSLY, MARCH 11: The deal isn’t set, but if it makes, it would represent the biggest bet yet that a Hollywood studio has made in a company built on YouTube, the world’s largest video site. Disney reportedly is in talks to buy Maker Studios for at least $500 million, Re/Code reports, citing people familiar with the negotiations. According to Maker Studios, the multichannel network generates 5.5 billion video views a month, with almost all of its content on YouTube. This is the latest move by a traditional media company to expand its focus on digital content. Just yesterday we reported on Warner Bros leading an $18 million financing effort for Machinima. a YouTube network aimed at gamers and other young men. Online video company FullScreen also scored an investment led by Comcast and others, and in May DreamWorks Animation agreed to pay $33 million for YouTube destination AwesomenessTV. The reported talks also come after Disney’s announcement last week that it was laying off 26% of its interactive division.
Related: Is Google Growing Its Own Online Video Competition?
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If you have kids — or, let’s face it, if you’ve been alive during the past few decades — you know about the Mario Bros video game franchise. Evan Daugherty certainly knows the Bros: The Snow White And The Huntsman scribe has teamed with Maker Studios’ gaming and geek culture network Polaris to create The Four Players, a quartet of live-action shorts that give each of the playable characters from Nintendo’s Super Mario Bros 2 game a gritty twist. “Making these short films gave me a chance to really ‘do my own thing’ while having a little fun treating one of my favorite video game properties with a darker vibe,” said the UTA-repped Daugherty, who also penned the upcoming Divergent and Teenage Mutant Ninja Turtles and is working on G.I. Joe 3. “I had been kicking around the idea for years before I was even working in the industry, so to finally be able to share these films with fans on Polaris is a very exciting thing.” Daugherty funded the films himself. The Fixer (which focuses on Mario), The Addict (his brother Luigi), The Star (imperiled Princess Peach) and The Soldier (Toad) are posted at Polaris’ YouTube channel. Check out Mario doin’ work in The Fixer below:
David Bloom is a Deadline contributor.
That’s the intriguing notion floated by Kelly Day, who headed online video distributor Blip.TV before it was bought by Maker Studios, the even bigger creator and distributor of online content based in Culver City. Day, still an adviser to Maker, was keynote speaker as the WestDoc conference for documentary, nonfiction and reality-show makers opened this morning. Online pundits have been griping lately about the 45% cut of ad revenue that Google takes for video it distributes on YouTube, up from a 70-30 split early in the platform’s life. While Day acknowledged it’s expensive and technically complicated for Google to host and distribute the massive amounts of video it makes available on YouTube, show creators have a sense that, because YouTube has so much content, “for the most part there hasn’t been a lot of sophistication about how to monetize the best of that content.” For companies such as Maker that operate so-called Multi-Channel Networks, or MCNs, that represent dozens or even thousands of individual online creators, “there is a great opportunity to think about how to package and monetize that content better,” Day said. And Google might not even mind, she said, given its previous pronouncements and how it allowed a similar ecology of outside companies to grow and thrive atop its core search-engine business. Read More »
Media company Maker Studios today announced its new gaming network Polaris, formerly known as The Game Station. “By re-launching our gaming channel as Polaris, we’ll be able to focus not only on videogames, but offer original content that embodies our deep love of pop culture, movies, comics and all-things-geek, said Dar Nothaft, VP and general manager of Polaris, Maker Studios. The new network features YouTube’s most popular gamers, including PewDiePie, Yogscast and Dodger, in addition to game reviews, trailers and original programming. The Polaris channel serves as a hub for a broad network, which attracts more than 1 billion+ views a month across 500+ top channels, according to Maker. Chris M. Williams, Chief Development Officer, oversees Polaris along with Maker’s other major vertical channels. The Polaris team also includes Luis Medina, Director of Partnerships, Isaac Zucca, Director of Programming, Nathan Kitada, Director of Branded Integration, Sarah Wick, Talent Strategy Manager, and David Rostal, Head of Network Development.