YouTube and Disney have made a $10 million deal to create a digital video series, called “Where’s My Water,” that they will share on both Disney.com and YouTube.com. While the deal is a relatively small one, it is indicative of Disney.com’s recent woes as well as Google YouTube’s plans for the future of content.
According to The New York Times, Disney produced a series of digital shorts that will go on both sites today. Disney.com benefits because its content will be shared on YouTube, a site that generates far more traffic than Disney’s own. YouTube benefits because Disney provides a trustworthy inroad to an audience of children. That is, parents trust Disney–whereas they are somewhat distrustful of YouTube–to display content that is appropriate for children.
The fact that Disney opted to do the deal is a concession that the brand itself is not strong enough to draw young kids to Disney.com. Until now, Disney content has only been available on Disney.com. Now Disney will make YouTube a prominent feature on its own site. It’s an effort to stanch the exodus of visitors from Disney.com, which lost more than $300 million over the last four quarters. Also, according to the Times, unique visitors dropped from 17.9 million to 12.7 million from June to September.
This $10 million deal is likely a flagship. If it proves successful–ie. Disney and YouTube are able to draw a significant audience–we are likely to see bigger deals with more cross-promoted Disney content.
Moreover, the deal is one of the forerunners in Google’s plan to make YouTube a purveyor of professionally produced content. In other words, an alternative to cable. (By alternative I mean simply another option. Google does not think YouTube will replace cable.)
In September, I wrote about Google spending in the neighborhood of $500 million to create its own content. YouTube wants to position itself to compete with cable for ad revenues. To that end, Disney gives YouTube a dual advantage: a trusty brand with parents and teaming with a well-known Hollywood studio.
“Where’s My Water?” is based on a popular kid-focused iPhone app, where kids try to get water to an alligator named Swampy. Disney will try to keep eight original series in production going forward. The advertising space will be sold by Disney and the revenues shared with YouTube. Disney will also curate user-generated content to feature on the channel. In addition, Disney will show a limited number of television shows on the YouTube channel, insofar as it doesn’t aggravate relations with cable partners.