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Yesterday Walt Disney Co. announced its acquisition of Culver City-based Maker Studios for a reported $500 million. Founded in 2009, Maker Studios is the leader in producing and distributing online video content for YouTube that attracts 4.5 billion+ monthly views and 340+ million subscribers. The move now gives Disney expertise in short-form entertainment.
This acquisition is one of the largest in history for a “multichannel network” in the region. If Maker’s aggressive growth targets are met Disney would pay the company another $450 million totaling the amount paid to Maker just shy of $1 billion. That's pretty high considering in 2013 all (disclosed) exits of LA digital startup companies totaled about $1.1 billion. Maker's big news could make 2014 another record-breaking year for the LA tech scene.
"Maker already has a large audience that will only keep growing, and that is something that would be hard to build on our own,” Kevin A. Mayer, Disney’s vice president for corporate strategy, said in the statement.
This deal, which centers around Maker Studio’s distribution and programming expertise, will allow Disney to take advantage of Maker's operatation of about 55,000 YouTube channels. The channels are pipelines to attract millennials and are home to some of YouTube’s top digital stars; Disney will be leaning on the 250-person Maker Studios team to learn how to engage with this new generation.
“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’s CEO and chairman Robert A. Iger said in a statement.
Maker Studios has raised nearly $70 million in its lifetime from big-name investors including Upfront Ventures and Greycroft Partners. In a recent Both Sides of the Table post, Mark Suster of Upfront said he couldn't "think of a better partner and home to develop this great company than Disney. I feel confident in saying that Maker will perform to any even higher level in the years to come as a result of this partnership."
