Disney Said to Fold Maker Studios Into Consumer Division

  • Step could lead to job cuts at company bought for $700 million
  • Action follows several management changes since 2014 purchase

Walt Disney Co. is folding its Maker Studios online video unit into the company’s consumer products and interactive media division to better integrate the business, according to a person with knowledge of the matter.

The action, which may involve job cuts, is unrelated to Disney’s decision to cut ties with Felix Kjellberg, the YouTube star known as PewDiePie, over videos with anti-Semitic content, said the person, who asked not to be identified because the decision hasn’t been announced.

Disney paid almost $700 million for Maker, a business it acquired in 2014 to serve young audiences on YouTube with short-form videos. Maker has undergone several management changes since the acquisition and has been at odds with its parent from time to time over how the entertainment giant’s classic characters should appear in online videos created by Maker’s team of mostly independent personalities.

Maker staffers pushed for more content involving “Star Wars” characters before the release of “Star Wars: The Force Awakens,” for example. The online studio’s stars did participate in a worldwide unveiling of “Star Wars” merchandise called Force Friday.

In December, Burbank, California-based Disney moved Maker chief Courtney Holt to its corporate strategy team. The unit is now being led by Andrew Sugerman, an executive vice president who oversees digital and interactive content inside Disney’s consumer division.

Online Views

The unit, which operates out of warehouse-like space in Culver City, California, relies on a large roster of talent to create videos that involve everything from comedy skits to test driving video games.

Since the purchase, views of Maker content have grown to 10 billion per month from 4 billion, according to the company. Revenue is several hundred million dollars a year. Disney declined to say whether the business is profitable. PewDiePie, a top star on YouTube, has more than 53 million followers.

The acquisition of Maker also brought Disney expertise in native ads -- videos that are created specifically for marketers and fit the tone and voice of the talent appearing in the content.

Under the new arrangement, Disney ad sales employees will be able to offer marketers sponsorship opportunities across all of its businesses, including Maker. The company plans to cut back on the number of online personalities the studio works with.

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