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As YouTube networks struggle to turn a profit, Disney spends $500 million on Maker Studios

As YouTube networks struggle to turn a profit, Disney spends $500 million on Maker Studios


PewDiePie, meet Mickey Mouse

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Disney is betting on YouTube in a big way. The company just announced plans to acquire YouTube video network Maker Studios for $500 million, with a further pay out of $450 million possible if certain performance targets are met. Maker is currently home to around 55,000 channels generating 5.5 billion YouTube views each month, according to the company, and it's home to some of online video's biggest names, including video game star PewDiePie.

Disney says that the deal will help the company expand its reach online, utilizing Maker's "unmatched combination of advanced technology and programming expertise and capabilities," according to CEO Robert A. Iger. It also helps the company tap into a very specific demographic — Disney specifically cites Maker as "the top online video network for millennials."

"Disney is synonymous with the best entertainment."

However, even with Maker's success, the deal does pose somewhat of a risk. Despite the massive number of viewers YouTube has managed to cultivate over the years, many networks have complained about the difficulties of actually turning a profit on the site at a larger scale. For every massive PewDiePie-style success, there are many struggling to turn YouTube videos into a legitimate business. For Maker, partnering with Disney could help it combat this by expanding beyond Google's video site.

"Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video," says Maker CEO Ynon Kreiz. The deal is expected to close during Disney's third fiscal quarter.