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Disney to buy YouTube network Maker Studios for $500 million

(Reuters) - The Walt Disney Co has agreed to buy Maker Studios, one of YouTube's largest networks, for $500 million, a deal that makes Disney a major online video distributor and should help draw more teens into the Disney entertainment empire.

The price tag could rise to $950 million if Maker hits certain performance milestones, Disney said, confirming what a source told Reuters earlier on Monday.

Maker, founded in 2009, 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.

"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 deal will be "mildly dilutive" to earnings per share through fiscal 2017, Mayer said. Disney's fiscal year closes at the end of September.

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, according to the source.

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," Disney CEO Bob Iger said in a statement.

The deal is expected to close in Disney's third fiscal quarter.

(Reporting By Ronald Grover and Malathi Nayak. Editing by Andre Grenon and David Gregorio)

Join the discussion

1000|Char. 1000  Char.
maa2626 March 24 2014 at 8:11 PM

186 channels, and nothing to watch

Flag Reply +5 rate up
1 reply
jd3rdnoah maa2626 March 24 2014 at 9:43 PM

I agree with that.

Flag Reply 0 rate up
Scotty March 25 2014 at 10:53 AM

Walt Disney made it possible for kids to see their favorite Disney characters and experience some good rides and was always great entertainment for our kids. In the recent past they have promoted various celebrities that are the poorest of role models and then charge $75 just to in to help pay for this sad situation. If Walt came back from the grave I think he would close it down that day. It's not kids,kids,kids anymore it's money, money, money.

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1 reply
Amaya Scotty March 25 2014 at 12:12 PM

Sorry to burst your bubble but all companies are about the money. Otherwise it'd be free!

Flag Reply +1 rate up
AL March 25 2014 at 10:26 AM

The big get bigger and we get the screw and not even getting the option of using a washer

Flag Reply +3 rate up
ken March 25 2014 at 9:41 AM

got my time warner bill yesterday they wanted to inform me about raising the rates on everything my internet from 20 dollars to 39.99 thanks for letting me know

Flag Reply +2 rate up
tenyrsafter1 March 25 2014 at 9:25 AM

There goes the neighborhood.

Flag Reply +2 rate up
Tupalov144 March 25 2014 at 6:59 AM

The mouse strikes again. More for the Disney monopoly on entertainment. Theres no Federal regulation on this?

Flag Reply +4 rate up
BLIZZARD-OF-AHHS March 25 2014 at 5:44 AM

the rat has his hand on your wallet every step of the way,no wonder he's always smiling

Flag Reply +6 rate up
llilly5266 March 25 2014 at 2:31 AM

I've been following Maker Studios for the last couple years...They are great. But I wonder how different it will become with Disney at the helm. These folks will be a success with or without Disney. They have this great creative, independent, original studio. Lots of Youtube stars. Now are they going to be Disney sellouts? I am afraid it won't be the same...and they all would have been rich with or without Disney...

Flag Reply +2 rate up
dgek March 24 2014 at 11:36 PM

"And it gives us a lot of data to help promote our other businesses to them." Them don't give a crap what disney has to offer. Maker will be the one that's "deluted". Very sad day

Flag Reply +2 rate up
strangeland64 March 25 2014 at 11:21 AM

Great.....taking over to control everything we want to see.....what's the charge going to be??? Sounds like another big waist...just like the worst one Google!!!!!! another great American ripoff!!!!

Flag Reply +1 rate up
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