News Analysis

With Maker Acquisition, Disney Takes on a Tough Challenge

Matthew Vascellaro
Matthew Vascellaro

Walt Disney Co.'s $500 million buyout of Maker Studios has been described as many things: An endorsement of the YouTube economy, an admission by a media giant that it can’t build digital properties in-house, and a seminal moment for Los Angeles’ startup scene.

What it isn’t, though, is the acquisition of a great standalone business, or a profitable one. And if Disney’s spotty history with Internet acquisitions is any guide, making the deal work won’t be easy.  

Maker had been losing $2 million to $3 million a month in the run-up to the sale, according to two people close to the company, with the expensive effort to get big quickly far outstripping ad revenue.

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“This type of asset is a logical fit and Disney has people internally who can jump in, even if other people quit,” said Mr. Terbeek.

—Amir Efrati contributed to this article.


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"A lot of the studios don’t even want to talk to you unless you’re already reaching massive scale. These buyers are worried anything below a certain size won’t move the needle."

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