DreamWorks Animation to Acquire Online Teen Network AwesomenessTV
UPDATED: The deal has an up-front price tag of $33 million with additional payments of up to $117 million if the popular YouTube network reaches certain earnings targets.
DreamWorks Animation said Wednesday that it has agreed to acquire AwesomenessTV, one of the most subscribed-to teen networks on YouTube.
The deal, with an up-front price tag of $33 million in cash, symbolizes the growing value of digital content creators to traditional entertainment companies. Additional cash payments of up to $117 million may be due if certain earnings targets are met in 2014 and 2015.
"With this deal, DreamWorks Animation will acquire a thriving next-generation media company, which through its Multi-Channel Network on YouTube has already signed up over 55,000 channels, aggregating over 14 million subscribers and 800 million video views," the companies said. "In addition, the AwesomenessTV brand has recently extended beyond the mobile platform into television and film, signaling continued cross-platform expansion plans."
Brian Robbins, the founder and CEO of AwesomenessTV, will continue to oversee the company and focus on growing it, "cultivating the brand's distinctive content," the companies said. In addition, Robbins will get an executive role at the studio to develop a DreamWorks Animation branded digital family channel, harnessing the studio's content portfolio.
DWA expects that the transaction will be completed in May.
"Awesomeness TV is one of the fastest-growing content channels on the Internet today, and our acquisition of this groundbreaking venture will bring incredible momentum to our digital strategy," said DreamWorks Animation CEO Jeffrey Katzenberg. "Brian Robbins has an extraordinary track record in creating family content both for traditional and new platforms and his expertise in the TV arena will be invaluable as we grow our presence in that space."
"The acquisition of AwesomenessTV by DreamWorks Animation speaks to Jeffrey's vision for the future of entertainment, the immense appetite for new kinds of storytelling and the power and reach of YouTube," said Robbins.
"In a very short time, Brian Robbins has built AwesomenessTV into a powerful, next-generation, audience network on YouTube," said Robert Kyncl, global head of content for YouTube. "DreamWorks Animation's acquisition is symbolic of the incredible evolution of online entertainment and continues the exciting momentum of creators on the platform. I look forward to seeing the results of this collaboration."
One analyst immediately said in an investor note that he was positive above the move.
"This deal likely ends the company going down the road of purchasing a cablenet, something which had been speculated in the past," wrote Benjamin Mogil at Stifel Nicolaus. "We see this decision as a strategically prudent view given both where viewers are migrating to as well as the pressures on carriage fees for non-sports cable nets, which made that road a challenging one. The deal will likely be dilutive in the near term but still strategically sound."
In negotiating the DWA deal, AwesomenessTV and Robbins were represented by United Talent Agency and Ziffren Brittenham, which together incubated AwesomenessTV.