In March, the Walt Disney Co. Offered to buy the Culver City-based Maker Studios for $500 million in cash. Depending on the company's performance, it could get an additional $450 million more from the Mouse House.
So what is Maker, you might ask? The 5-year-old company is a multichanncel network (MCN), meaning a producer and distributor of online video on YouTube. It's responsible for 55,000 YouTube channels with more than 380 million subscribers and 5.5 billion monthly views--hands down the most popular MCN out there. One problem though: Maker’s not exactly profitable. With the acquisition, Disney is following in the footsteps of a couple big purchases by other companies. In 2013, DreamWorks, threw down $33 million for AwesomenessTV, a competitor to Maker. Last month, Warner Bros. pumped $18 million into the Machinima network, despite the fact that the niche network has been losing viewers. Media conglomerates aren't the only ones wanting a piece of the pie. AT&T has rolled out plans to create a new MCN.
Is the Maker Studios deal worth close to $1 billion, one of Disney's biggest acquisitions in recent years? What does it give Disney over its competitors? Are we likely to see more of these blockbuster deals in the future?