Hearst Acquires $81 Million Stake in DreamWorks Animation's AwesomenessTV
The publishing company will take a 25 percent interest in the YouTube multichannel network
Hearst Corp. has acquired a 25 percent stake in DreamWorks Animation's AwesomenessTV worth $81.25 million, the companies announced Thursday.
The deal values the YouTube multichannel network at $325 million. DWA, which retains majority ownership of Awesomeness, purchased the company in May 2013 for $33 million, but promised to pay up to $117 million if it reached certain performance targets.
Under the new structure, Awesomeness founder Brian Robbins and president Brett Bouttier will continue to run the company. Neeraj Khemlani, president of Hearst Digital Studios, will join the board of Awesomeness. DWA and and Hearst said they will work together to help Awesomeness enter new content channels, broaden its audience and expand its geographic reach. Awesomeness will now have access to Hearst's subscription video-on-demand technology.
Awesomeness and Hearst first began a formal relationship in October last year when they partnered to launch a YouTube network for Hearst's Seventeen magazine. Khemlani and Robbins tell The Hollywood Reporter that the decision to formalize the relationship was a long time in the making.
"When we started working together, we recognized what a great potential partner Brian could be," says Khemlani. "Over time, it became really apparent that we could be great partners in his efforts and ambitions to grow Awesomeness globally."
The deal gives Hearst a larger foothold in the digital video business, which it has begun to explore with the launch of subscription SVOD service Cosmo Body in July. The $10-per-month service is the first of several planned services for the media company.
For Awesomeness, access to an SVOD platform speeds up plans to distribute content direct to audiences instead of through third-party platforms such as YouTube. Says Robbins, "They've invested heavily in their technology platform and to immediately get access to the SVOD platform helps us accelerate our plans."
In the year-and-a-half since DWA acquired Awesomeness, the company has expanded into talent management with the acquisition of Big Frame and added a consumer products division. The company's network of YouTube stars, which include Lia Marie Johnson, JennXPenn and Tyler Oakley, has a combined 114 million subscribers and averages nearly 800 million monthly views.
Robbins points to DWA CEO Jeffrey Katzenberg as driving the company's recent growth. "I give him big credit for our growth," he says. "He's supported us financially, he's supported us by making things happen for us, and he's supporting this move because he know that one plus one, here, could make four."
Robbins adds that a full sale to Hearst was not on the table. "You would have to wrestle [Jeffrey] to the ground to get an outright sale," he jokes. "He's very bullish on where we're headed and continues to invest in the company."
Katzenberg said in a statement that the the deal with Hearst is "an extremely exciting partnership for AwesomenessTV and DreamWorks as we continue to implement our long-term strategy to maximize the value of our content and properties through multiple distribution platforms."
Hearst already has a number of joint ventures, including a 50 percent stake in Disney-owned A&E and a 20 percent stake in Disney-owned ESPN.