You will be redirected back to your article in seconds

Time Warner leads $36 mil investment in Maker Studios

Deal gives investors a roughly 25% stake in multi-channel network

Time Warner has completed a $36 million investment round in multi-channel network Maker Studios, giving the conglom a 25% stake and signaling big media’s growing appetite for digital content companies.

Hollywood is also represented in the pool of financiers, which includes Downey Ventures, the investment company for Robert Downey Jr.; Greycroft Partners; Elisabeth Murdoch; FUEL: M+C, the investment company for Jon Miller and Jimmy Yaffe; Maker chairman Ynon Kreiz; Daher Capital and Lightstorm’s Jon Landau. Time Warner’s venture arm, Time Warner Investments, led the group.

People familiar with the mater told Variety the deal amounted to a roughly one-quarter stake in Maker. Rachel Lam, who heads the Time Warner Investments group, will join the studio’s board.

New coin, which Variety first reported on Nov. 14 that Time Warner was pursuing, will accelerate Maker’s already rapid growth. The company has gone on a hiring frenzy as of late, recently completing 40,000 square feet of studio space to service its army of YouTube talent.

That talent, which produces content for Maker’s some-3,000 channels, attracts about 2 billion views per month, according to Comscore. Company’s episodic content is often produced more cheaply than it would be on television, and attracts a comparable audience.

Two of the most-watched installments of “Nice Peter’s Epic Rap Battles,” for example, have attracted more than 17 million and 46 million views, respectively. Maker can then monetize those views on its ad-based network, with roughly half (and in some instances more) of the revenues going to the talent.

“We attract attention from major media because we’re doing something that’s really hard to do: building sustainable, predictable viewership among young people,” said Maker chief operating officer Courtney Holt. “We’re unlocking value in a way that’s become very complicated and expensive for (traditional media) to do.”

In addition, Maker could provide Time Warner with in-house entree to its TV and film brands on YouTube. Maker could also be a place to incubate low-cost intellectual property before migrating it to other platforms.

Time Warner Investments is a portfolio filled with “mid-stage” new-media ventures including analytics firm Bluefin Labs, social-TV hub GetGlue and ad network Tremor Video.

Founded in 2009 by Lisa Donovan, Danny Zappin and Ben Donovan, Maker is a self-described “next-generation, talent-first media company and the only network to offer its partners a full range of vertically integrated services including development, production, promotion, distribution, sales and marketing.” Company has grown from a staff of nine to more than 300, and has incubated talent — including KassemG, The Gregory Brothers and Shaytards — in addition to bringing in established names like Snoop Dogg, who partnered with Maker to launch WestfestTV.

By joining MCNs, YouTubers can grow their audience through cross-promotion executed across the hundreds, if not thousands of channels aggregated by each firm. Multichannel networks provide the production, marketing and technology infrastructure that allows the talent to focus on the creative in exchange for a cut of the revenues generated by everything from advertising to merchandising.

But one big challenge for multi-channel networks: Lacking ownership of the intellectual property of talent associated with the company. Maker and one of its biggest stars, Ray William Johnson, for example, are in the middle of a very public spat over Johnson’s popular show “=3.” The dispute — which centers around intellectual property and Johnson’s profit participation — has led Johnson to shoot some recent episodes in his own home instead of at Maker’s facilities in Culver City. Johnson has pledged to leave Maker behind, though is currently still under contract.

But for the most part, the MCN space is seen as a rapidly evolving business. Peter Chernin’s Chernin Group recently made a $3 million investment in Latino YouTube channel MiTu, marking its third investment in the MCN space.

“The whole space is seen as sort of a land-grab. The ecosystem is huge,” said David Siemer, managing partner at Siemer Ventures, which invests in internet businesses including Stylehaul and Laffster. “The other big media congloms are not shying away.”

More TV

  • All Rise Prodigal Son Network TV

    Networks Tout Delayed Viewing Amid Dismal Early-Season Numbers

    The 2019-20 broadcast premiere season has begun, and the ratings are … underwhelming. More specifically, the Nielsen live-plus-same day ratings are underwhelming. Of the 13 new shows that debuted across the Big 4 during premiere week (Sept. 23-29), the highest-rated was Fox’s “Prodigal Son,” which notched a 0.96 rating in adults 18-49. In terms of [...]

  • RAVEN'S HOME - Disney Channel's "Raven's

    'Raven's Home' Renewed for Season 4 at Disney Channel (EXCLUSIVE)

    “Raven’s Home” has been renewed for a fourth season at Disney Channel, Variety has learned exclusively. In addition, Alison Taylor is joining the fourth season as an executive producer alongside series lead Raven-Symoné and showrunner Warren Hutcherson. Production on the new season will begin later this year. “Raven is a huge part of the Disney Channel [...]

  • Variety Cord Cutting Placeholder Cable

    Starz Warns Subscribers of Looming Drop by Comcast

    Comcast subscribers will have to do without Starz shows like “Power” and “Outlander,” the result of the latest showdown between a major programmer and one of the big cable distributors that gets its content into consumers’ living rooms. The Lionsgate-backed premium cable service told subscribers to Comcast’s Xfinity service Wednesdays that they can expect to [...]

  • "Murder Means Never Having to Say

    'Why Women Kill' Renewed for Season 2 at CBS All Access

    “Why Women Kill” has been renewed for a second season, CBS All Access announced Wednesday. “‘Why Women Kill’ has had a phenomenal first season,” said Julie McNamara, executive vice president of original content, CBS All Access. “Under the creative direction of Marc Cherry and the incredible performances of the cast, the series has become one [...]

  • Lucia Milazzotto

    Rome MIA Director Lucia Milazzotto Talks Linear TV and Theatrical Comeback

    MIA market director Lucia Milazzotto is the main architect of Rome’s new format post-Mipcom, pre-AFM confab launched five years ago to serve as a driver for the Italian industry in the global arena. The MIA acronym stands for (Mercato Internazionale Audiovisivo, or International Audiovisual Market). Milazzotto spoke to Variety about how this unique event featuring [...]

  • TV Ratings: 'This Is Us' Slides

    TV Ratings: 'This Is Us' Slides Again, 'Arrow' Returns Steady

    After showing some stability from week 2 to week 3, “This Is Us” has slid once again in the ratings. The popular NBC drama dipped from a 1.65 rating among adults 18-49 last week to a 1.5 this time around, and from 7.3 million total viewers to 6.7 million. Its lead-in, “The Voice,” scored a [...]

  • Diane Sawyer Will Interview Cameron Douglas

    Diane Sawyer Will Interview Cameron Douglas, Michael Douglas in ABC News Special

    Diane Sawyer will present the first television interview with Cameron Douglas, the son of actor Michael Douglas who has had a troubled history, in a new one-hour primetime special slated to air Tuesday, October 22 at 10 p.m. eastern on ABC. The younger Douglas has written a memoir, “Long Way Home,” that examines how addiction [...]

More From Our Brands

Access exclusive content