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Disney Will Acquire Maker Studios for $500M

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A rumor reported by StreamingMedia.com two weeks ago during the South by Southwest festival has been confirmed: the Walt Disney Co. will acquire Maker Studios for $500 million. The deal is subject to regulatory approval and is expected to close before the end of June. Disney has agreed to pay up to $450 million more if Maker meets aggressive performance targets.

Maker is one of the leading YouTube multi-channel networks (MCNs), and this news is the latest in a series (such as Warner Bros. investing $18 million in Machinima and Discovery Channel buying Revision3) that shows traditional entertainment companies' interest in creating a presence online by buying established players.

As Variety noted, MCNs have done well at building sizeable audiences of mostly young viewers, but less well at monetization. Maker currently supports over 55,000 YouTube channels with over 380 million subscribers. At SXSW, Ynon Kreiz, Maker's executive chainman, said the company's revenues had tripled for the past two years. Monetization is lagging by one or two phases, he added.

“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,” says Robert A. Iger, Disney's chairman and chief executive officer. 

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