Walt Disney Co. believes Maker Studios, the YouTube network that it acquired in March, has the potential to become the next Marvel, Pixar or Lucasfilm.
Maker, the largest network of channels on Google's YouTube, is growing revenue and has the potential to be profitable, Jay Rasulo, Disney's chief financial officer, said Wednesday at the Goldman Sachs Communicopia Conference in New York.
Disney agreed to pay $500 million for Maker and potentially an additional $450 million if the site reaches certain performance targets. Disney hasn't broken out revenues for Maker, Marvel, Pixar or LucasFilm. Marvel released the two biggest movies of the year so far — Guardians of the Galaxy and Captain America: Winter Soldier— which
together have collected $1.3 billion at the worldwide box office, according to Box Office Mojo.
"Over time we believe Maker will be as big of a studio as Marvel or Lucas or Pixar," Rasulo said. "Maker has a studio mentality. They create a lot of their own content, channels and stars, and beyond their technology and algorithms and data, they have built a studio system and speak the same language that we do."
Disney is trying to attract Maker's YouTube viewers, where it splits advertising revenue, to watch programs at its wholly owned site, Maker.tv, Rasulo said. Already, when Disney's other media outlets such as ABC, Disney Channel and ESPN provide short-form videos for Maker, the content resides almost exclusively at its own website, where the company doesn't have to share revenue, he said.
"We’ll continue to put great content on Maker.tv and it’s doing pretty well," Rasulo said. "The behemoth right now in digital advertising in short form is YouTube. We don’t see that as either a short-term or long-term road block to profitability."
Separately, Rasulo said Disney's agreement to provide programming to Dish Network's planned Internet TV service is a way for the company to help attract younger viewers to sign up for traditional pay-TV packages down the road. Dish's service is targeted at the roughly 7 million millennials, cord-cutters and those who have never signed up for pay-TV, he said.
Dish has also reached agreements with Time Warner and A&E Networks for the service, which the company plans to offer by the end of the year. At launch, Dish expects the service to have 20 to 30 channels and cost between $20 and $30 a month.
"We see it, and Dish does see it, as possibility for people to experience the great value of being part of the [pay-TV] system," Rasulo said. "It's an on ramp."
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