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Friday, July 14, 2017

Studios Try To Fight Back, Is It Enough

Back in 2014, Disney acquired an on-line production company called Maker Studios for $675 million.  For almost three years nothing was heard of Maker and what Disney was to do with their new internet venture. In 2014, Maker was comprised of over 60,000 YouTube channels (yes, that's right 60k) and had no real mission other than to produce a myriad of live streaming videos in the hopes that several would stick and develop an audience.

Obviously Disney had other plans. Coming out-of-the-closet last week was 'Disney Digital Network'  A newly formed entity that is a blend of the former Maker Studio and Disney's own brand of on-line entertainment.  Pared-down to less than 1,000 channels, the new venture will focus on a singular audience - a Disney family-friendly audience.

So, after  a whole-lot of reorganization and restructuring, Maker has now officially been folded into the Disney family and ready for it's debut as part of the new 'Disney Digital Network'.

Disney has big plans for its digital network which will encompass a broad range of digital channels, all of its social accounts, home websites like Disney.com, and a separate content studio.  Disney believes that the resulting network will be able to reach 1 billion consumers globally and be heavily skewed toward millennials and Gen Z viewers.

Disney has been a leader among the studios in embracing the inevitable digital onslaught and has, thus far, managed both the movie and web-based audiences each serves extremely well.  Problem is that serving both, over the long-haul, takes lots of money and lots of talent and Disney may not be up to the task by itself.  CMG believes that over time Disney, like the other studios, will have to partner-up with one of the big tech or communications companies, my guess is Apple.

Jim Lavorato

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