The Walt Disney Co. has agreed to buy Maker Studios, one of YouTube’s top multichannel networks, for $500 million, a deal that now makes Disney a major online video distributor.
Founded in 2009, Maker Studios is one of the largest video production networks on YouTube, with its target being the younger millennial generation, known for its desire for online videos. Disney’s purchase of the studio should help draw more teenagers into Disney entertainment.
“This gives a presence online to reach the millennial group that is increasingly getting its video online,” said Kevin Mayer, Disney executive vice president for corporate strategy. “And it gives us a lot of data to help promote our other businesses to them.”
The $500 million deal, which has the potential of being worth upwards of $950 million by the time it’s all said and done, will set a new standard for startup online video networks. When The Wall Street Journal revealed the news earlier this month that Disney was in talks with Maker, the newspaper said it “would mark the biggest acquisition by a major media company in the fast-growing but challenging business of producing and promoting video programming on Google’s YouTube.”
Chief executive of Disney, Bob Iger, released a statement on Monday stating that “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.”
The acquisition is expected to close during Disney’s 2014 third fiscal quarter, which will end in late June.
