Here's one way Disney will try to recoup the $950 million it plans to spend buying YouTube network Maker Studios: with web series backed by deep-pocketed marketers.
One example arrives Thursday, when Maker will post the first episode of "The Next Style Star," an online reality series listing Macy's as a co-producer.
The 10-episode series will pit 16 fashion stylists against each other in a competition for $10,000 judged by fashion aficionados like Whitney Port, originally of MTV's "The Hills," and Made Fashion Week founder Jenne Lombardo. The winner will also have a chance to become a guest stylist on a Macy's photo shoot and have his or her winning style displayed at Macy's Herald Square store in New York City.
The companies declined to disclose terms of the deal. In addition to the budget put toward producing the series, however, Macy's will spend money on ads to promote the show, including banners to run on websites such as Usmagazine.com and Polyvore.
Seven-minute episodes will air every Thursday at 1 pm ET on Maker-run YouTube channel "The Platform" -- which counts more than 358,000 subscribers -- and on macys.com/stylestar. Sarah Malkin, VP-branded entertainment at Maker Studios, said the schedule was based on its research on reaching a lifestyle audience.
Macy's and Maker Studios began discussing a possible co-branded series late last fall as the retailer sought a way to reach millennials during the spring fashion season.
"The proposal that came back from Maker was around a series, a competition between stylists who would integrate products for Macy's into every segment," said Jennifer Kasper, Macy's group VP-digital media and multicultural marketing. The series will feature brands from Macy's Impulse department, which is aimed at millennials and includes Lucky Brand, Maison Jules and Guess.
Macy's has experience with branded entertainment, but more so on TV, like its work with NBC's "Fashion Star" or ABC's "Dancing With the Stars." "Doing it on YouTube is relatively new to us," Ms. Kasper said.
Last year Macy's worked with YouTube network StyleHaul to include the brand in some creators' videos. "There's an appetite for content that comes from influencers that may be more persuasive than us creating everything ourselves," said Ms. Kasper.
Macy's spent $759.3 million on measured media in 2013, according to Ad Age DataCenter.
For online video companies like Maker Studios, shows co-produced with a brand are a way to attract a bigger share of those long sought-after TV dollars. They are also a way to hang on to more of the revenue received from advertisers. YouTube's economics dictate that companies typically send 45% of their ad revenue to the Google-owned video service, but that only goes for paid media, like pre-roll and banner ad buys. Content companies get to keep their earnings from brand integrations, such as product placements or co-produced series.
Maker has worked with brands in the past, but "The Next Style Star" marks the network's first branded series.
"We have a number of co-branded series upcoming this year," Ms. Malkin said. She said she couldn't say how many the company has planned or whether Maker plans to pitch those programs at its NewFronts presentation on May 6.