Disney to buy YouTube network Maker Studios for $500 million; “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”

April 4, 2014 Leave a comment

Disney to buy YouTube network Maker Studios for $500 million

Mon, Mar 24 2014

By Ronald Grover

LOS ANGELES (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.

 

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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