It’s official, The Walt Disney Company has agreed to buy Maker Studios, one of YouTube’s largest networks, for $500 million with a potential price tag of $950 million if Maker hits certain performance milestones.
Maker Studios, founded in 2009, is one of the largest video production networks on Google Inc’s YouTube. Its producers target the younger millennial generation, known for its high appetite for online video. Maker helps produce and distribute videos to more than 380 million subscribers worldwide across more than 55,000 channels. Its videos now collectively garner some 5.5 billion views every month, according to the source.
This deal makes Disney a major online video distributor and should help draw more teens into the Disney entertainment empire.
(source: Reuters)
Full Press Release:
BURBANK, Calif., March 24, 2014 – Furthering its goal of bringing content to consumers on all the platforms they prefer, The Walt Disney Company (NYSE:DIS) has agreed to acquire Maker Studios, the leading network of online video content on YouTube.
Maker Studios shareholders will receive total consideration of $500 million, and a performance-linked earn-out of up to $450 million if the strong performance targets are met.
With more than 55,000 channels, 380 million subscribers and 5.5 billion views per month on YouTube, Maker has established itself as the top online video network for Millennials.
By acquiring Maker Studios, Disney will gain advanced technology and business intelligence capability regarding consumers’ discovery and interaction with short-form online videos, including Disney content.
“Short-form online video is growing at an astonishing pace and with Maker Studios, Disney will now be at the center of this dynamic industry with an unmatched combination of advanced technology and programming expertise and capabilities,” said Robert A. Iger, Chairman and Chief Executive Officer, The Walt Disney Company.
“Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video,” said Ynon Kreiz, Executive Chairman and CEO of Maker Studios.
Maker Studios will report to Disney Chief Financial Officer Jay Rasulo. Maker Studios will remain headquartered in Culver City, Calif., with operations in New York and London.
The transaction, which is subject to regulatory clearances, is expected to close in Disney’s third fiscal quarter.
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