BURBANK (dpa-AFX) - Walt Disney Co (DIS) Monday agreed to acquire online video producer, Maker Studios, for $500 million and a performance-linked earn-out of up to $450 million.
Maker is a multi-channel network that creates content aimed at the millennial generation - people born between 1982 and 2002. The company makes deals with amateur users who produce YouTube videos.
The deal is expected to help Disney foray into YouTube programming and boost its presence in the fast-growing online video market.
'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...,' said Disney CEO Robert Iger.
With over 55,000 channels, 380 million subscribers and 5.5 billion views per month on YouTube, Maker has carved a niche for millennials, Disney said in a statement.
Disney will also gain advanced technology and business intelligence capability vis-a-vis consumers' discovery and interaction with short-form online videos.
Maker Studios will continue to be based in Culver City, California, with operations in New York and London.
The deal is to close in Disney's third fiscal quarter.
Media firms have recently upped their presence in the online video market. Rupert Murdoch's 21Century Fox invested $70 million in Vice Media in 2013, and DreamWorks Animation SKG Inc (DWA) acquired Awesomeness TV in a deal valued up to $117 million.
Walt Disney stock closed Monday at $79.49, down $0.86 or 1.07%, on a volume of 7.6 million shares on the NYSE. In after hours, the stock gained $0.10 or 0.13% at $79.59.
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