March 14, 2014

Disney in talks to purchase Maker Studios

Walt Disney Co. is currently in talks to purchase YouTube channel Maker Studios in a deal that could be worth $500 million, reports the tech blog Re/code.

Makers Studios creates, promotes and distributes videos aimed at adults in their 20s and early 30s and attracts over 5 billion views a month. This technology acquisition would give Disney a larger presence in the growing online video market. The deal would also give the media giant access to viewers who have drifted away from live television in recent years. 

Maker currently operates a network of 60,000 online channels that feature content from a wide variety of categories. It also works with some of YouTube's most popular personalities to help them get their videos to a wider audience. The company has already attracted many high-profile investors including Time Warner and Canal Plus. During its most recent round of funding last summer, the startup was valued at $300 million. 

Sources close to the deal told Re/Code that news of the acquisition could be announced in the next two weeks. Neither company has made a public statement on the pending transaction.

Buying online video companies seems to be the acquisition strategy of many media conglomerates these days. Last year, 21st Century Fox invested $70 million in Vice Media, while DreamWorks Animation bought Awesomeness TV, another YouTube network for $100 million. 

Disney has been somewhat ahead of its competitors when it comes to online video. It was the first broadcast network to make its programming available for sale on iTunes and the first to stream its shows on its website. This is also not the company's first technology-related acquisition, as it purchased gaming site Club Penguin in 2007.