Disney Buys Video Creator Startup Maker Studios

DIS aims to get in front of young, online audience

   

Disney Buys Video Creator Startup Maker Studios

Maker Studios, the YouTube channel operator, was bought by Disney (DIS) for $500 million in a bid to maintain younger viewers increasingly flocking online.

disney Disney Buys Video Creator Startup Maker StudiosThe deal is the Walt Disney Co.’s largest since 2012, when it bought the “Star Wars” franchise through Lucasfilm Ltd. for $4.06 billion.

In an interview with the Associated Press, Kevin Mayer, Disney’s executive vice president of corporate strategy, said Maker Studios will help Disney reach young audiences.

“They have the biggest audience on YouTube. It’s very hard to replicate,” Mayer told the wire service.

The purchase will give Disney ownership of 55,000 channels — including Epic Rap Battles of History and makeup expert Amy Pham’s The Fashion Statement. Combined, Maker has 380 million subscribers and generates 5.5 billion views per month.

….It also follows other media giants into the space. Earlier this month, Time Warner Inc.’s Warner Bros. led an $18 million investment into videogamer network Machinima. Last year, DreamWorks Animation SKG Inc. bought the AwesomenessTV network for $33 million, with a bonus potential of $117 million if the studio met earnings targets over two years.

DIS stock is up .55% on the news of the sale, and 4.6% year to date.

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Article printed from InvestorPlace Media, http://investorplace.com/2014/03/disney-maker-studios/.

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