Until now, the Walt Disney Company hasn’t been too vocal about the strategy behind its purchase of Maker Studios in March, which could cost up to US$950 million. But during an appearance at Goldman Sachs Communacopia Conference in New York City on Wednesday, Disney senior EVP and CFO Jay Rasulo laid it all out.

In its initial stages, “we believe it’s mostly a distribution play,” Rasulo told moderator Drew Borst. “But over time, we believe that Maker will be a big studio just like the Marvel Studio and just like the Lucasfilm Studio (acquisitions) and just like Disney Animation. It will be a content creator for the company.”

Rasulo went on to point out that while Disney’s vast content library has been monetized extensively via SVOD, it hasn’t scratched the surface with short-form. He said the company believes that Maker will be the driving force in taking it to the next step, reformatting and reusing the company’s content, whether it comes from ESPN, Disney Channel, local ABC stations or the ABC network.

Borst asked Rasulo about the commonly held belief that when companies shift content to their own sites so they can keep all the ad revenue to themselves, traffic drops off so dramatically that they’re forced back into the arms of YouTube.

Rasulo said that Disney’s own off-YouTube portal, Maker.tv, is doing “pretty well.”

“We’re selling ads pretty well into that space,” he added, “But, of course, the behemoth right now in the digital advertising that goes into short-form is clearly on YouTube [which splits the ad revenue], but we don’t see that as either a short-term or a long-term obstruction to profitability for Maker. The split still allows you to have a lot of revenue, and that revenue is growing incredibly rapidly, and the pie is gigantic.”

Rasulo said the size of Maker’s pie has grown since Disney’s purchase, going from four billion to nine billion monthly views.

From Stream Daily