By Sahil Patel
Over the past few years, several major media companies have betted on YouTube multi-channel networks in the form of acquisitions or investments.
Now, according to a report from Recode, the YouTube ecosystem could see its biggest acquisition yet. Per Recode, Disney has had conversations with Maker Studios, one of the largest networks on YouTube, for a potential acquisition that could value the MCN at $500 million.
To date, Maker Studios has raised close to $70 million, including a massive $36 million round in December 2012 led by Time Warner Investments. This was followed by an additional $26 million in Series C money from Time Warner, Greycroft Partners, and a group of international investors. Maker Studios currently reaches more than 350 million subscribers across its network, generating over 4.2 billion video views per month.
The network is larger than competitors like AwesomenessTV and Machinima, both of whom have received investments from Hollywood companies. AwesomenessTV was famously acquired by Disney rival DreamWorks Animation in May 2013 via a deal that could pay-out as much as $117 million. Just yesterday, Machinima closed a new $18 million financing round led by Warner Bros. Entertainment.
These types of deals make sense for both parties. If there was a major trend to 2013, it was that businesses built out of the YouTube ecosystem are looking to expand beyond the world’s biggest video site and find additional revenue streams, whether that was by syndicating to other video platforms or building owned-and-operated platforms on mobile and connected TV devices.
Meanwhile, Hollywood studios are looking to reach younger audiences, who are increasingly watching content on YouTube and mobile. Forty percent of Maker’s audience watches content on mobile, and the company has been building custom/branded apps for some of its top creators and mini-networks since it acquired Blip last summer.
In any case, the Recode report cautions that the deal isn’t guaranteed — just that conversations have taken place.
When reached for comment, a Maker Studios rep said: “We don’t comment on rumors or speculation.”