Los Angeles: Walt Disney Co has agreed to buy Maker Studios, one of YouTube's largest networks, for $500 million. This deal will makes Disney as the major online video distributor.
‘The price tag could rise to $950 million, if Maker hits certain performance milestones,’ states Disney.
"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. The deal will be mildly dilutive to earnings per share through fiscal 2017.
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. It 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.
The company, whose backers include Time Warner Investments, Upfront Ventures and Greycroft Partners, is partners with PewDiePie, the online persona of 24 year-old video gamer Felix Kjellberg. Kjellberg has more than 25 million subscribers and is YouTube's single most-subscribed star.
"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," Bob Iger, CEO Disney.
The deal is expected to close in Disney's third fiscal quarter.
