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Disney acquires Maker Studios for $500 mn

MUMBAI: The Walt Disney Company has acquired YouTube content provider Maker Studios for $500 million with a performance-based earn-out of up to $450 million.

According to Disney, Maker Studios will enable advanced technology and insight into consumers’ discovery and interaction with short-form online videos, including Disney content.

Disney CEO Bob Iger said, ““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 deal is subject to regulatory clearances and is expected to close in Disney’s 2014 third fiscal quarter, which ends in late June. Maker Studio has about 350 employees, and they will join Disney.

Maker Studios will report to Disney chief financial officer Jay Rasulo, and will remain based in California with operations in New York and London. The YouTube based video supplier generates more than 5.5 billion views a month from a subscriber base of 380 million.

Maker Studios CEO and executive chairman Ynon Kreiz said, “Disney is synonymous with the best entertainment and is the ideal partner for us, strengthening our position as the leading player in online video.”

Disney’s deal for Maker and Warner Bros’ recent investment in Machinima are the latest moves by big entertainment companies looking to delve into the YouTube market and original digital content. DreamWorks Animation too recently bought AwesomenessTV, which focuses on teenagers, in a deal worth up to $117 million.