After falling short of its first set of performance goals, Maker Studios will receive a $105 million payment from parent Walt Disney Co., shy of the $198 million it could have received under the terms of its 2014 acquisition.
Maker, a multichannel network with more than 55,000 YouTube channels and 650 million subscribers, boasts 10 billion views per month. It was purchased by Disney in 2014 for $500 million in cash with another $450 million in payments possible if certain benchmarks were met. Disney had earmarked $198 million to pay the first round of bonuses, but in an email to former Maker shareholders on Aug. 19 it was revealed the actual amount would be much less: $105 million.
The smaller bonus was first reported by Re/Code and confirmed by a source with knowledge of the payout. It was not clear what metrics Maker’s performance was judged against.
News of the lower payout came the same week that Chief Content Officer Erin McPherson and Senior Vice President of Marketing Jeremy Welt resigned their positions.
Representatives of Maker and Disney did not respond to requests for comment.
Despite an enthusiastic marriage between the two companies in 2014, some of the energy in the relationship appears to have been lost. Many think that Maker’s fast-moving video production process is mismatched with Disney’s more meticulous methods.
“The Internet, and YouTube specifically, is about being fast, being reactive,” said Sarah Ullman, digital video consultant and former Maker employee. “And Disney is famously the inverse of that. They are very precious with their IP and slower to act.”
When Disney bought Maker it saw it “first and foremost as a distribution platform,” Chief Executive Bob Iger said in a 2014 earnings call.
Disney envisioned using Maker’s network of YouTube stars to market its Disney, Marvel and Star Wars franchises. In turn, Maker saw integration with Disney as an important driver of future growth. Slower than anticipated access to Disney’s intellectual property and corporate resources, however, has reportedly led to frustration from Maker executives.
“Maker was able to be successful because it was able to scale so fast,” said Ullman. “It’s going to be a challenge to stay nimble and I think they are feeling that.”
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