Disney Acquires YouTube Video Supplier ‘Maker Studios’ for $500 Million
The Walt Disney Company is on track to conquer YouTube. That is the obvious implication when it announced that it has recently completed its acquisition of Maker Studios, a video supplier based on Google’s popular video-sharing Website.
The giant entertainment and theme parks company has spent $500 million for the transaction. And that amount is still not final. As stipulated in the acquisition agreement, it would hand over another $450 million to the original owner of Maker Studios if the acquisition meets aggressive growth targets within a specified timeframe.
If you are wondering why Walt Disney is that eager to spend for such a business, you might instantly get answers on Maker Studio’s figures. Presently, the video maker has a subscription based of up to 380 million. Not surprisingly, it generated over 5.5 billion views each month. The transaction is now described in Hollywood as the biggest for a multichannel network.
In a statement, an executive from Disney expressed his confidence that buying Maker Studios would be beneficial to the company. That is because the acquisition already has a big audience that keeps on growing. In turn, the company admitted that the growth that Maker Studios has is something Disney would have a hard time having on its own.
This deal would more about distribution as well as programming expertise. To date, Maker Studios is managing up to 55,000 YouTube channels. Most of those are providing a pipeline specifically to young consumers for the company’s well-loved characters and franchises. Maker Studios is also expected to help Disney learn how to more effectively interact with the new Web generation.
Many of Disney’s recent acquisitions have been focused on further amassing intellectual property. That is because the company obviously wants to obtain more fuel for its TV, theme park, movie, and consumer products divisions. Among the most recent purchases are Marvel Entertainment and Lucasfilm (the maker of ‘Star Wars’).
For the past digital media acquisitions, Disney already has many hits and misses. Its $350 million takeover of Club Penguin in 2008 is considered as one of its successful transactions because the virtual playground operator has brought so much value to the company.
On the downside, its $563 million buyout of Playdom in 2010 was a disappointment. That was because the maker of social games that are played in Facebook has been on the decline when the market got an unexpected shift to mobile gaming.