The Walt Disney Company and YouTube recently inked a multi-million dollar deal that seems to play on both company’s weaknesses. Disney is having trouble attracting young people looking for video content to their website, whereas YouTube is not “kid-friendly” in the eyes of some parents. Will this new deal work out for the two media companies?
Disney Interactive Media and YouTube will spend a combined $10 million to $15 million on new, original web series. Disney plans to base the first series on its popular puzzle app Where’s My Water, featuring an alligator named Swampy. The videos will be distributed on a co-branded channel on Disney’s website and YouTube. Disney is currently prepping an overhaul of its website to correspond with the deal. This channel will also pull amateur video from content uploaded to YouTube on a daily basis.
Disney Interactive co-president, James A. Pitaro had this to say about the new partnership:
“It’s imperative to go where our audience is. [The idea is to] bring Disney’s legacy of storytelling to a new generation of families and Disney enthusiasts on the platforms they prefer.”
Disney Interactive has been losing money over the last four quarters, so the pressure is on Mr. Pitaro to create videos that can be monetized quickly. YouTube also hopes to benefit from this venture by gaining credibility with parents, many of whom don’t like the fact that their children can be subjected to very inappropriate video content.
“It’s an acknowledgment that we want to work with the best brands and, yes, we expect this partnership to attract new advertisers,” said Robert Kyncl, YouTube’s global head for content partnerships
Mr. Kyncl emphasized that YouTube is solely acting as a distributor and has no plans to get into the production business. Disney will sell advertising inventory and give YouTube part of the revenue. In addition to original content and selected amateur video, Disney will also include video from its television shows.
Mr. Pitaro told the New York Times that the Disney-YouTube deal “is a very nice first step. It shows that we’re not thinking small.” He also says that the Disney.com overhaul should be completed by fall 2012.
Source: The New York Times
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