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Disney buys YouTube network Maker Studios for $500M

Shareholders in YouTube programmer Maker Studios will get a total consideration of $500 million, and can earn up to $450 million by hitting performance targets.

Screenshot by Joan E. Solsman/CNET

Disney has agreed to buy YouTube programmer Maker Studios for $500 million, the company said Monday.

Talks toward such a deal were earlier reported by Recode.

In a release, Disney said Maker Studios shareholders would receive total consideration of $500 million, and an earn-out of up to $450 million if strong performance targets are met. CNET has contacted Disney for further details about the terms.

It's the latest significant investment in a top YouTube multichannel network by a traditional media company hunting for savvy operators on newer platforms. Machinima, a company that produces gaming videos, disclosed Warner Bros. led an $18 million financing round earlier this month. However, both Maker and Machinima have laid off workers in the last year, hinting at the difficulty of forging a new form of video content business on one's own.

Disney suggested that Maker's acumen would be applied to clips of Disney video. In its release, the company said the Maker acquisition would bring it advanced technology and business intelligence about short-form online video, including Disney content.

"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 with an unmatched combination of advanced technology and programming expertise and capabilities," Disney Chairman and Chief Executive Robert A. Iger said.

The company said Maker racks up 5.5 billion monthly views and 380 million subscribers. It's consistently in the top five most-watched YouTube partner channels in ComScore's monthly Video Metrix rankings, with some of the highest numbers for minutes watched per viewer.

Maker Studios will report to Disney Chief Financial Officer Jay Rasulo and will remain based in Culver City, Calif. Disney expects the deal to close in its fiscal third quarter, which finishes at the end of June.