Culling at YouTube Network -- WSJ

By Ben Fritz 

Walt Disney Co. is laying off about 80 people as it radically shrinks the number of YouTube video creators supported by its Maker Studios unit, said a person close to the company.

Disney has been integrating Maker, which it acquired in 2014 for $675 million, into its consumer-products and interactive-business unit since December in an attempt to find a winning strategy for the business, which had been flailing. Some of those losing their jobs were Maker employees and others worked for the consumer products unit's digital-publishing division, which employs several hundred people. One aim is to eliminate job duplication as the two merge.

Rather than providing more than 60,000 YouTube creators with support promoting their channels and selling ads, Maker is aiming to work with roughly 300 who have large followings and are well suited to work with other Disney divisions, the knowledgeable person said. One example already in the works is a show on YouTube hosted by Maker personality Alexys Gabrielle tied to the "Oh My Disney" website featuring games, interviews and skits promoting other franchises from the company.

The unit will no longer be in the business of supporting fledgling YouTube video producers looking to gain visibility as part of a larger and diverse network.

The vast majority of people in Maker's YouTube network have made very little money, current and former employees said.

Since Disney acquired it, Maker has never been profitable and while it has increased its parent company's digital advertising and technological capabilities, it hasn't been as financially successful as the media giant hoped, people with knowledge of the business said.

The reductions for the creator network were in the works before Disney last week severed ties with Maker's highest profile creator, YouTube megastar PewDiePie, following Wall Street Journal inquiries about videos in which he made anti-Semitic jokes.

Write to Ben Fritz at [e-mail]

(END) Dow Jones Newswires

February 24, 2017 02:47 ET (07:47 GMT)

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