Media Companies Partner With YouTube Startups, Target Teens

Large media companies, such as Disney, AOL, DreamWorks, Warner Bros. and Yahoo, are teaming up with startups that produce YouTube videos popular in the teen and tween age groups. Disney acquired Maker Studios for $500 million in March. AOL and Yahoo have discussed an acquisition deal with Fullscreen. DreamWorks is creating a multichannel network. These deals usually involve advertising agreements in which media companies help YouTube stars sell ads in return for a cut of the profits.

The media companies usually make very small profits from these deals because they have to share ad revenue with Google and the YouTube stars. More importantly, though, the media companies are getting more access to teen viewers through short-form video.

Big media companies “don’t have expertise in producing that content, so they are buying that expertise,” said Michael Nathanson, analyst with MoffettNathanson Research, in The Wall Street Journal.

DreamWorks is in the process of creating a multichannel network that includes AwesomenessTV and Big Frame. Last June, the studio acquired AwesomenessTV for $33 million, hoping to cash in on the young audience of its new series for Nickelodeon and YouTube stars such as the Janoskians.

Disney, on the other hand, is planning to use its partnership with Maker Studios in a different way. According to EVP Kevin Mayer, Disney plans to use Maker’s expertise to test thousands of Marvel and Star Wars characters on YouTube videos.

One of Maker Studios’ YouTube stars that can help Disney target younger audiences is Felix “PewDiePie” Kjellberg. His video game montages have attracted over 26 million subscribers to his YouTube channel, the most of any individual, according to VidStatsX.com.