Disney is laying off 80 staff across its digital media division, including the YouTube talent platform Maker Studios, according to The Hollywood Reporter. The company's aim is to more tightly integrate Maker with its consumer products and interactive media arm, the Reporter says, noting that the move is a "tacit acknowledgement" that Maker was not working optimally as a standalone unit.
- The layoffs stem, in part, from redundancies now cropping up between Maker and the larger digital team but also from the significant culling of Maker talent.
While Maker had around 55,000 digital creators at its peak, Disney now plans to work with under 1,000 digital creators. The Reporter suggests that the new number could be as low as 300.
Disney's Maker shakeup arrives as another sign that big brands are re-thinking their approach to digital strategy following early, bullish periods with the channel that ultimately resulted in meager profitably and often clunky integration with larger business. The news also suggests social influencers, an important digital marketing trend in the past year, are experiencing some growing pains.
Disney acquired Maker for $500 million in 2014 and though it initially promised up to $450 million in "performance incentives," it only paid $175 million, which might have lead several executives, including CEO Ynon Kreiz, to depart the company, according to the Reporter.
Maker also recently found itself at a flashpoint of major controversy when it dropped star YouTuber Felix Kjellberg from its network. Kjellberg, who goes by the name PewDiePie on the platform, had produced a series of videos deemed anti-Semitic, which also led YouTube parent Google to cut him out of its Preferred advertising program.
Kjellberg is YouTube’s biggest influencer with around 53 million subscribers. The Wall Street Journal reports he made up to $9.2 million in advertising revenue off of YouTube content last year when he was still aligned with Maker.
His controversial departure underscored the dangers of advertising around influencers who aren't necessarily beholden to brand-safe content, and the slimming of Maker's creator partners might signal that Disney is becoming more discerning and cautious when it comes to talent selection.
News of Maker being trimmed and essentially folded into Disney's larger digital media business also comes at a time when YouTube — and, by extension, its influencers — are at the forefront of the conversation around video marketing.
On its most recent earnings call, Alphabet strongly emphasized YouTube's growing importance in its revenue strategy, and eMarketer forecasts that YouTube's net U.S. video ad revenue could reach $2.59 billion in 2017, accounting for 20% of the U.S. total.