Is Maker Studios On Track To Becoming YouTube’s Electronic Arts?

Over the weekend, NMR reported that multi-channel network Maker Studios let go of at least 30 members of their staff. The network told NMR: “Our business is evolving and as we strategically plan for our next phase of growth, we are making adjustments in some key areas and changing allocation of internal resources.”

This round of layoffs comes at the tail end of founder Danny Zappin stepping down as CEO of the network. Taking his place, company chairman Ynon Kreiz, it seems, has began the the first and most likely not-final steps of restructuring Maker Studios.

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The layoffs, however, came as a surprise to many in the industry as Maker is reported as being one of YouTube’s most successful MCNs with over 3 billion views a month. In addition, the network locked down a $36 million round of fundraising back in December, which put the company at a roughly $200 million value.

The departure of Zappin tied so closely with the layoffs cannot be overlooked, as traditionally — in most industries — a CEO being replaced is often followed by a round of layoffs. Just last week, Electronic Arts announced that 10 percent of their staff had been laid off in the wake of former CEO John Riccitello’s resignation.

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EA CFO Blake Jorgensen explained to The Verge the laying off of over 900 employees, saying that Riccitello resigning cost the company $15 million more than they initially planned for. For major companies like EA and the smaller but similarly structured Maker, it’s all about operating margins. Jorgensen explained in a recent earnings call that EA was working towards a 20 percent operating margin.

Both Maker and Electronic Arts share similarities in more than just restructuring. As EA’s former CEO stepped down, a source told TechCrunch:

“The truth is that the game industry continues to pivot very rapidly. EA is in a good place but it requires a lot of energy and laser focus…. He’s been pivoting the company hard for many years, but the industry keeps pivoting faster.”

This “pivot” is something that mirrors the YouTube network industry perfectly at this point. Digital video is rapidly becoming the standard for entertainment consumption, and with that, advertisers have become ravenous about funneling money straight into the hands of networks. However, with the ever-changing YouTube landscape, a landscape that has changed incredibly since Maker was founded in 2009, it’s possible that Zappin wasn’t able to keep up with the “pivot” that Riccitello also struggled with.

In response to the recent round of layoffs, Maker also explained to NMR that, “We made these staff reductions in some areas while we are actively hiring in key divisions.”

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