When people talk about mega-deals in the tech industry, it usually involves hundreds of millions or even billions of dollars. On Monday, a deal will be announced for $10-$15 million dollars. The waves of this deal will likely be felt by a good portion of the world in the near future.
According to the New York Times, Disney Interactive Media and YouTube will be working on original video series in the form of shorts. They will be produced by Disney and distributed on a co-branded channel on Disney.com and YouTube.
There will be some amateur video pulled in from the plethora of videos uploaded to YouTube that will be included on the channel.
For Disney, this gives the company an additional venue through which to get kids focused on their site and shows. They have stayed relatively independent over the years choosing to focus on their brand and assets alone. This is one of the first major pushes to try to pull from outside of the Disney line.
“It’s imperative to go where our audience is,” said James A. Pitaro, co-president of Disney Interactive.
Perhaps more importantly, Disney Interactive is failing financially. With over $300 million in losses last quarter, they’re looking for a major turnaround very quickly.
For Google, the reasoning is simple. They want more advertisers on YouTube. Attaching to a major brand in a lucrative niche such as kids’ entertainment can pull in the advertising dollars as more kids spend time on it. Last month, YouTube had an incident with the Sesame Street channel that could scare away parents and advertisers alike.
They are moving towards more distributed, unique content. Last week, they expanded their unique content channels with over 100 new ones.
Despite being small relative to other tech deals, this represents major moves for both Disney and YouTube. If this is successful, expect both companies to continue to expand to overcome the issues that have plagued them for years.
I also thinks this is very big and important deal from many prospectives. Google must be happy after the deal.