Disney Reserves $198M for Maker Studios Payouts
This post was originally written for The Jungle, a weekly newsletter about the business of YouTube. Subscribe here.
By Sarah Ullman
The news of Maker’s $198 million potential payout was disclosed this past week in a regulatory filing. There has been very little substantive journalism about the details of the filing itself: what portion is guaranteed ($198 million has been “reserved”)? How did they arrive at that $198 million figure? The answer is likely a mix of viewership increases, overall revenue, brand deals, etc.
The deal was structured as a $500 million purchase price with an additional $450 million to be paid out based on performance targets. The performance-based distribution is segmented into two halves by year: $200 million possible in 2014 and $250 million possible in 2015. Maker-focused publicity has been trumpeting positivity, and $198 million is only $2 million shy of the $200 million 2014 target. Keep in mind these are funds that have been reserved; $198 million is not necessarily the actual distribution number for 2014, although it certainly bodes well for Maker.
Here’s a bit of recent news for context:
- Maker continues to search for alternate revenue streams for its creators, including this recently announced Vimeo VOD deal.
- Maker Studios’ US audience has grown 60% since Disney acquisition. (Of course it did…these numbers include TrueView buys and Maker has a Disney-sized war chest now.)
- Disney enlists Maker to create ‘Star Wars’ series online.
- Maker.tv is underperforming, with only 263,000 visitors to the site in December.
- Remember Maker’s hub channel initiative from late 2013/early 2014 that “plan[ned] to build out 20 different verticals which will allow it to carve out homes for 100 different programs across the four units“? Not a whisper of a mention, and it’s clear that Maker has significantly scaled back its internal content production. Dead hub channels (Maker Music, Cartoonium, FriendlyPa) litter YouTube.
All in all, $198 million is an impressive sum, and Maker has an opportunity to earn more payouts over the course of the next year as part of its arrangement with Disney. I’ll keep my eye on this story for you to see if reportage emerges…
This article has been updated to include the most up-to-date information.
Sarah Ullman (@thesillysully) is a writer and creative consultant focusing on the YouTube ecosystem. She writes a weekly newsletter about the business of YouTube called “The Jungle” (subscribe here) and