Viacom Inc. is in talks to acquire youth-media company AwesomenessTV from Comcast Corp., Verizon Communications Inc. and Hearst Corp., according to two people familiar with the matter.
While talks are moving along, a final deal has yet to be reached, but that could change soon, according to sources who asked not to be identified because talks are ongoing. Viacom will pay less than half the $650 million valuation AwesomenessTV received back in 2016, which indicates that online media companies aren’t doing as well right now, Bloomberg reports.
After acting in a stubborn matter about the evolution of more traditional media to media found on and produced for the internet, even once entering into a lawsuit against Google, Viacom started gathering a number of digital properties. Viacom hopes to be more in tune with young viewers that have left Viacom channels MTV and Nickelodeon because they mostly watch products aired on YouTube and Instagram, according to Bloomberg. It acquired the online video convention VidCon and marketing firm Whosay and put forth numerous web series, Bloomberg adds.
Kelly Day heads up the Viacom digital studio. She previously worked at AwesomenessTV. Brian Robbins, AwesomenessTV’s co-founder and former chief executive officer, works at Viacom’s studio Paramount Pictures, according to Bloomberg.
Viacom’s stock has seen better days as it’s down 25 percent over the past 12 months, according to Bloomberg.
AwesomenessTV was once a rapidly expanding online media company. Though it has popularity among young viewers, the company couldn’t figure out how to properly monetize that popularity and create a sustainable business. The company is losing money, and unsurprisingly, the owners aren’t too interested in the venture anymore. Comcast has a 51 percent stake in AwesomenessTV, with Verizon and Hearst Corp. owning the remainder. The owners decided the company would be better off with just one part in control, the sources said.
Comcast acquired a stake in AwesomenessTV when it acquired DreamWorks Animation, the animation studio that created movies like “Shrek” and “Kung Fu Panda,” while Verizon acquired its stake under the leadership of outgoing Chief Executive Officer Lowell McAdam, Bloomberg reports.
AwesomenessTV was valued at $650 million when Verizon acquired its minority stake in 2016, joining it with other online properties in an arsenal that Verizon was creating. Verizon’s CEO-to-be, Hans Vestberg, started reducing Verizon’s interests in media, according to Bloomberg.
The valuation of most digital-media companies has declined over the past few years in part because Facebook and Google take up such a large percentage of the advertising market. Dozens of companies that distribute video and news on those sites have fallen on hard times, according to Bloomberg.
Bloomberg points out recent examples of struggling online platforms, like the news site Little Things closed, while Walt Disney Co.’s Maker Studios and news site Mic fired staff.
Robbins, a former actor, filmmaker and producer, founded Awesomeness after he noticed that his children started spending their screen viewing time on platforms like YouTube instead of on a television with cable.
By: Madeline Brackett