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Maker Studios ‘Mostly a Distribution Play’ for Disney

The role Maker Studios will play inside the Walt Disney Co. is getting a little clearer months after the network of online channels was acquired for $500 million.

Disney describes Maker as “mostly a distribution play,” according to chief financial officer Jay Rasulo, who spoke Wednesday at Goldman Sachs’ Communacopia Conference in New York.

But Maker also is also being positioned alongside Marvel, Lucasfilm and Walt Disney Animation Studios as “a big studio” and “content creator” for the Mouse House in the future.

That’s largely because of the massive audience of millennials that Maker has been able to attract to its channels. Since Disney purchased the company at the end of March, Maker has grown from 4 billion monthly views to 9 billion, and now has over 450 million subscribers to its channels, Rasulo said.

While some of that audience has grown through the addition of new channels to Maker’s network, it’s still a significant jump.

More viewers means more eyeballs for Disney’s brands, which the company will promote to Maker’s audience.

That will especially come through short videos — an area “that we haven’t even scratched the surface on,” Rasulo said.

Instead, Disney has largely focused on turning its library of characters and properties into films and TV shows as a way to monetize them.

Maker will “be a tremendous driving force” in taking that library content and reformatting it as short form videos.

Rasulo used programming from ESPN, Disney Channel and ABC as examples.

Yet Rasulo stressed that Maker also isn’t waiting to work with Disney’s holdings to create new programming, saying the company’s structure resembles that of a traditional studio, which made the acquisition more attractive.

“Maker has a studio mentality,” Rasulo said in the way it creates programming, channels and their own stars. “Beyond the technology and the algorithms, they also have creative studio people who speak the same language we do.”

With Maker, Rasulo helped shed some light on the kinds of acquisitions Disney likes to make.

In Maker’s case, it was a company that could help it extend its brand and gets its properties in front of consumers in new ways, he said.

But Disney largely sees Maker as “an enhancement of our distribution system,” and “a very obvious way to get our content into the short form system in a rapid way rather than build that organically,” Rasulo said.

Expanding into short form programming has created a learning curve for Disney’s various divisions, however, Rasulo admits.

“The interest of our business units to get snackable forms of content out there is like 50 years ago when movies studios were trying to make television — it’s not completely natural.”

“We have to be a company that looks at technology as a friend, not an enemy,” Rasulo said, citing the views of Disney chief Bob Iger. “We need to embrace new technologies (and not see them) as a detraction.”

“Brands still matter and matter in a big way and give you an entree into trying new things with consumers who are interested in your product,” he added.

That includes embracing new distribution platforms and moving consumers “into a new model that utilizes technology.”

However, Rasulo stressed that when brokering deals, Disney prefers non-exclusive, short term deals “that don’t lock yourself in this rapidly evolving space.”

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