Tuesday, March 25, 2014

The Better Deal

So Diz Co. buys a web TV network. And DreamWorks Animation buys a web TV network. The best buy?

The Disney deal with Maker Studios suggests AwesomenessTV could be worth quite a bit more, based on back-of-the envelope math.

In February, AwesomenessTV had 74 million unique desktop viewers globally, compared with 205 million for Maker Studios, according to comScore, which doesn't include mobile views. Assuming Disney pays the full $950 million, it would imply a valuation of $343 million for AwesomenessTV if each viewer is assigned the same value at each company.

What's more, AwesomenessTV is growing even faster than Maker Studios. AwesomenessTV had 269 million desktop video views in February, up twentysevenfold from the same month of 2013. Maker Studios video views rose a more modest 61 percent to 1.9 billion over the same period, according to comScore.

AwesomenessTV is also focused on a single channel with a high density of teen viewers. That's a rare asset and potentially attractive to advertisers who historically have gone to traditional TV networks like Viacom's Nickelodeon.

DreamWorks is in need of such an asset because its core movie business is prone to volatility. After the big success of its "Shrek" movies last decade, the company has had a mixed record in recent years. ...

Of course, when it comes to the purchase of internet assets, everybody is flying a teensy bit blind. Because there's no sure-fire way to know with precision what the values of these young, new startups actually are.

DWA and Disney are hoping they're a good deal. It will take time to know if they actually are. But at this point, it looks like DWA did pretty well with their purchase. (They certainly paid a lot less than their friends in Burbank.)


Site Meter