Two powerful media companies, the Walt Disney Company and YouTube, are betting that a new partnership will help overcome barriers separate but equally worrying as they strive to dominate every major website.
The transaction is expected to be announced Monday, is small on the surface: Disney Interactive Media and YouTube, a division of Google, will spend a combined $ 10 million to $ 15 million series of original videos, the films will be produced and distributed by Disney Channel on Disney.com co-branded and YouTube. The channel will also include amateur video shot since the torrent uploaded to YouTube daily.
But the alliance is striking because it tacitly acknowledges about the weaknesses of each company.
Disney, currently working on another redesign of its website, is conceding that its own brand is not a powerful enough draw for children looking for online video, YouTube is seen as cooler.
Thus, in a reversal of a web strategy go-it-alone, Disney will go fishing for young people on YouTube in addition to a role of YouTube's own site - something the company hopes to coax children stay longer.
"It is imperative to go where our audience is," said James A. Pitaro, co-president of Disney Interactive. He added that the idea is "to the Disney legacy of storytelling to a new generation of families and Disney fans on the platform they prefer."
Disney Interactive has been losing money - $ 300 million over the last four quarters - and Mr. Pitaro, part of a new management team of the division, is under pressure to create videos that can be monetized Web quickly. Traffic Disney.com 's is also declining at an alarming rate. Unique visitors totaled $ 12.7 million in September, down from 17.9 million in June, according to measurement company comScore. Seasonality affects the circulation to some extent.
YouTube hopes to gain something from the Disney brand as well, namely credibility with parents, many of whom are not thrilled with the development of their children under loose on a site where videos can be shredded and provocative and comments even more. The company wants to compete with cable television for advertising dollars by adding more professional video.
The association with a Hollywood heavyweight to advance that goal significantly. The studios have been reluctant to provide material for Google Web for free.
"It's a recognition that we want to work with the best brands and yes, we expect this partnership to attract new advertisers," said Robert Kyncl, global head of partnerships for YouTube content.
Disney is an important ally for YouTube, who walks a careful line when it comes to attract children, there is no age requirement to access the site, but you are supposed to be at least 13 to register an account. YouTube also needs Disney, because it remains locked in a legal battle with Viacom, which owns the other major player in this field, Nickelodeon, and keeps his videos (except for some promotional materials) off YouTube.
YouTube Disney partnership follows the announcement of YouTube last month that it planned to create dozens of channels, with actors, sports stars, musicians and other artists. It also offers cash advances to potential producers, which totaled more than $ 100 million, according to people with knowledge of the plan, but were not allowed to speak publicly. Investments in the channels reflect the conviction of Google as the Internet is the third phase of the television business, after the television network (with a few channels) and cable TV (with hundreds).
Mr. Kyncl out that YouTube is destined to remain a neutral distributor and its alliance with Disney should not be interpreted as an effort to go into the production company. Under the terms of the agreement, Disney will produce the Web series, the first will be based on the app breaks popular "Where's my water?" Which has a crocodile named Swampy grinning. The goal is to have eight original series in production at some point, Mr. Pitaro said.
Disney will sell the advertising inventory and divide some of the revenue with YouTube. Apart from the production of new short films, Disney will also select to include amateur video on the channel. (Disney said it does not expect to hire additional staff to manage these functions, relying instead on existing resources.) Video of Disney television programs will also be presented on the channel, although the company must be very careful to avoid angry partners cable too much away for free.
Mr. Pitaro, who joined Disney last October after a stint running properties of the media to Yahoo, under pressure from the case. He said the overhaul of Disney.com - a site criticized as slow, disorganized and too promotional - to be completed by fall 2012. YouTube partnership, he says, "is a very nice first step. It shows that we are not thinking small. "
The transaction is expected to be announced Monday, is small on the surface: Disney Interactive Media and YouTube, a division of Google, will spend a combined $ 10 million to $ 15 million series of original videos, the films will be produced and distributed by Disney Channel on Disney.com co-branded and YouTube. The channel will also include amateur video shot since the torrent uploaded to YouTube daily.
But the alliance is striking because it tacitly acknowledges about the weaknesses of each company.
Disney, currently working on another redesign of its website, is conceding that its own brand is not a powerful enough draw for children looking for online video, YouTube is seen as cooler.
Thus, in a reversal of a web strategy go-it-alone, Disney will go fishing for young people on YouTube in addition to a role of YouTube's own site - something the company hopes to coax children stay longer.
"It is imperative to go where our audience is," said James A. Pitaro, co-president of Disney Interactive. He added that the idea is "to the Disney legacy of storytelling to a new generation of families and Disney fans on the platform they prefer."
Disney Interactive has been losing money - $ 300 million over the last four quarters - and Mr. Pitaro, part of a new management team of the division, is under pressure to create videos that can be monetized Web quickly. Traffic Disney.com 's is also declining at an alarming rate. Unique visitors totaled $ 12.7 million in September, down from 17.9 million in June, according to measurement company comScore. Seasonality affects the circulation to some extent.
YouTube hopes to gain something from the Disney brand as well, namely credibility with parents, many of whom are not thrilled with the development of their children under loose on a site where videos can be shredded and provocative and comments even more. The company wants to compete with cable television for advertising dollars by adding more professional video.
The association with a Hollywood heavyweight to advance that goal significantly. The studios have been reluctant to provide material for Google Web for free.
"It's a recognition that we want to work with the best brands and yes, we expect this partnership to attract new advertisers," said Robert Kyncl, global head of partnerships for YouTube content.
Disney is an important ally for YouTube, who walks a careful line when it comes to attract children, there is no age requirement to access the site, but you are supposed to be at least 13 to register an account. YouTube also needs Disney, because it remains locked in a legal battle with Viacom, which owns the other major player in this field, Nickelodeon, and keeps his videos (except for some promotional materials) off YouTube.
YouTube Disney partnership follows the announcement of YouTube last month that it planned to create dozens of channels, with actors, sports stars, musicians and other artists. It also offers cash advances to potential producers, which totaled more than $ 100 million, according to people with knowledge of the plan, but were not allowed to speak publicly. Investments in the channels reflect the conviction of Google as the Internet is the third phase of the television business, after the television network (with a few channels) and cable TV (with hundreds).
Mr. Kyncl out that YouTube is destined to remain a neutral distributor and its alliance with Disney should not be interpreted as an effort to go into the production company. Under the terms of the agreement, Disney will produce the Web series, the first will be based on the app breaks popular "Where's my water?" Which has a crocodile named Swampy grinning. The goal is to have eight original series in production at some point, Mr. Pitaro said.
Disney will sell the advertising inventory and divide some of the revenue with YouTube. Apart from the production of new short films, Disney will also select to include amateur video on the channel. (Disney said it does not expect to hire additional staff to manage these functions, relying instead on existing resources.) Video of Disney television programs will also be presented on the channel, although the company must be very careful to avoid angry partners cable too much away for free.
Mr. Pitaro, who joined Disney last October after a stint running properties of the media to Yahoo, under pressure from the case. He said the overhaul of Disney.com - a site criticized as slow, disorganized and too promotional - to be completed by fall 2012. YouTube partnership, he says, "is a very nice first step. It shows that we are not thinking small. "
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