By Sahil Patel
Consolidation in the online video space isn’t restricted to businesses in the US.
Rightster, a London-based digital video distribution company, has acquired European MCN Base79 for £50m ($85.6 million). Roughly half of the money will be paid in cash, with the rest coming in shares a year after the deal closes — if management can hit certain performance targets. The deal is expected to close by August 7, 2014.
Rightster’s video businesses revolves around helping content creators and publishers license and distribute videos across the web. The company says it works with more than 850 content owners and 7,500 publishers, and helps them find monetization on a licensing, ad-funded, direct-to-consumer, or paid placement basis.
With the addition of Base79 and its network, Rightster says it will become the largest MCN outside of North America, and the fourth-biggest in North America.
Base79 claims to be the largest YouTube MCN outside of North America. The company’s network spans more than 850 “premium” content partners and 1,500 channels, including those from media brands such as The Jim Henson Company, NBCUniversal, BBC Worldwide, and The Associated Press. Services provided include rights management, ad sales, and audience development. The MCN also works with an array of independent creators native to the YouTube platform.
The merged company will be able to claim a reach of 1.1 billion video views per month, up from the 371 million Rightster was generating on its own, Rightster said.
Additionally, Rightster sees the acquisition as a way to scale its global services and products, as well as expand into new practices (ad sales) and markets — particularly North America, Australia, and Latin America.
As part of the acquisition, Base79’s chief content officer Patrick Walker, a former senior director of YouTube EMEA, will be joining Rightster’s executive team.
Additionally, Chad Hurley, co-founder of YouTube, will become a Rightster shareholder and join the company’s advisory committee.
Investors in Base79 include The Chernin Group and Evolution Growth Media Partners, an investment arm of Evolution Media Capital, which is partly owned by Hollywood agency CAA. Formed in 2007, Base79 generated roughly $5.6 million in net revenue, with a loss of $6.4 million in 2013.
In addition to Base79, Rightster is also acquiring Viral Spiral in a cash and shares deal worth up to £4.1m ($7.1 million). Viral Spiral specializes in social video management, licensing, and distribution. Essentially, the company feeds advertisers and media companies with viral video clips. Rightster and Viral Spiral have an existing relationship, having worked together to launch a YouTube yoga network.
The acquisition of Viral Spiral is also positioned by Rightster as a way to expand into services it currently doesn’t provide.
“Acquiring Base79 and Viral Spiral is transformational for Rightster,” said Charlie Muirhead, founder and CEO of Rightster, in a statement. “This greater scale and expertise improves the service we will be able to offer creators and publishers, improving our ability to both grow audiences and increase monetisation, and positions us as a global leader in the exploding online video market for brands and media agencies.”