AirTalk for April 25, 2014

What are multichannel networks and why does everyone from Disney to AT&T want a piece of them?

ALAIN JOCARD/AFP/Getty Images

A girl watches a video on youtube on a computer on February 27, 2013 in Chisseaux near Tours, central France.

In March, the Walt Disney Co. Offered to buy the Culver City-based Maker Studios for $500 million in cash. Depending on the company's performance, it could get an additional $450 million more from the Mouse House.

So what is Maker, you might ask? The 5-year-old company is a multichanncel network (MCN), meaning a producer and distributor of online video on YouTube. It's responsible for 55,000 YouTube channels with more than 380 million subscribers and 5.5 billion monthly views--hands down the most popular MCN out there.

One problem though: Maker’s not exactly profitable. With the acquisition, Disney is following in the footsteps of a couple big purchases by other companies. In 2013, DreamWorks,  threw down $33 million for AwesomenessTV, a competitor to Maker. Last month, Warner Bros. pumped $18 million into the Machinima network, despite the fact that the niche network has been losing viewers.

Media conglomerates aren't the only ones wanting a piece of the pie. AT&T has rolled out plans to create a new MCN.

Is the Maker Studios deal worth close to $1 billion, one of Disney's biggest acquisitions in recent years? What does it give Disney over its competitors? Are we likely to see more of these blockbuster deals in the future?

Guest:

Peter Csathy, CEO of Manatt Digital Media Ventures, a division of Manatt Digital Media, a business consultant and venture capital firm focusing on tech, entertainment and media. His blog is called Digital Media Update.


blog comments powered by Disqus