Disney Ponders the Biggest Big Media YouTube Bet Yet: Buying Maker Studios

Disney has been talking to Maker Studios about an acquisition that would value the YouTube network at $500 million or more, according to people familiar with the negotiations.

A deal isn’t guaranteed. If it goes through, it would be by far the biggest bet by a traditional media company in a company built on top of YouTube, the world’s largest video site. Maker says it now generates 5.5 billion video views a month, almost all of which take place on YouTube; it works with some of the site’s most popular video makers, including Felix “PewDiePie” Kjellberg, a 24-year-old Swede who is currently YouTube’s biggest star.

Ynon Kreiz, Maker’s executive chairman, declined to comment when I asked him about the negotiations this morning in person. I haven’t heard back yet from Disney reps.

Maker is one of several big YouTube companies that have already received investment dollars from traditional media companies. In late 2012, Time Warner’s venture arm led a $36 million round in Maker. Time Warner’s Warner Bros. studio has also put money into Machinima, a YouTube network aimed at gamers and other young men; Comcast* has invested in FullScreen, which operates a YouTube network and also provides tools to YouTube video distributors; and Bertelsmann has invested in StyleHaul, a YouTube network that concentrates on fashion and shopping. Last May, DreamWorks Animation paid $33 million, and agreed to terms that could eventually push the payout to $117 million, for AwesomenessTV, a tween-focused YouTube network.

But that enthusiasm for YouTube investments has been tempered in the last year, as big players on Google’s video site have complained that they don’t make enough money there — either because YouTube’s ads aren’t lucrative enough, or because YouTube takes a big chunk of those dollars via revenue sharing deals, or both.

Many big YouTube networks, such as Maker, are trying to find ways to make money outside of YouTube by distributing their videos to other hubs, including Microsoft’s Xbox, as well as building their own properties. And they are also trying to strike “integration” deals that don’t require them to share revenue with YouTube; Maker has recently signed what it says is a significant integration deal with Pepsi.

Maker has raised around $70 million to date. The Financial Times (registration required) reports that its most recent funding round last year valued the company at $300 million.

* Comcast owns NBCUniversal, which is an investor in Re/code.

This article originally appeared on Recode.net.

Will you support Vox’s explanatory journalism?

Most news outlets make their money through advertising or subscriptions. But when it comes to what we’re trying to do at Vox, there are a couple reasons that we can't rely only on ads and subscriptions to keep the lights on.

First, advertising dollars go up and down with the economy. We often only know a few months out what our advertising revenue will be, which makes it hard to plan ahead.

Second, we’re not in the subscriptions business. Vox is here to help everyone understand the complex issues shaping the world — not just the people who can afford to pay for a subscription. We believe that’s an important part of building a more equal society. We can’t do that if we have a paywall.

That’s why we also turn to you, our readers, to help us keep Vox free. If you also believe that everyone deserves access to trusted high-quality information, will you make a gift to Vox today?

One-Time Monthly Annual

$5/month

$10/month

$25/month

$50/month

Other

$

Yes, I'll give $5/month

Yes, I'll give $5/month

We accept credit card, Apple Pay, and Google Pay. You can also contribute via