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

A deal could be worth $500 million or more.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

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.

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