Rightster is to acquire Base79, the largest MCN outside of North America, in a deal that could be worth as much £50 million, and Viral Spiral, a video licensing and seeding firm, for £4.1 million. Chad Hurley, who was one of YouTube’s co-founders, will also be joining Rightster’s advisory board. In October 2006, Hurley and co-founder Steve Chen sold YouTube for $1.65 billion to Google.
Base79, whose founder and CEO is Ashley MacKenzie, son of former Sun editor Kelvin MacKenzie, will be bought for £25 million plus a maximum of £25 million in new Rightster shares, which they will receive approximately 12 months after closing based on the achievement of earn out conditions.
Rightster say the deals will enable them to combine their distribution and monetisation experience with Base79’s position as the largest YouTube partner outside North America and Viral Spiral’s experience in social video management, licensing and brand engagement.
The acquisitions will enable Rightster to become the fourth biggest YouTube multi channel network (MCN) by audience in North America and the largest MCN outside of North America, adding over 2,000 YouTube channels. Rightster’s aggregated traffic will increase from 371 million video views per month to 1.1 billion. As part of the deal Patrick Walker, previously Senior Director of YouTube EMEA, will join Rightster as CCO.
The acquisitions are part of a wave of consolidation in the MCN space over the last year or so, with AwesomenessTV, the digital media arm of DreamWorks Animation, announced the acquisition of YouTube multichannel network Big Frame for $15 million in cash.
Deal continues trend of consolidation in the MCN sector, which included DWA’s acquisition last year of AwesomenessTV for $33 million (with an additional $84 million in earn-out fees), Disney’s $500 million acquisition of Maker Studios, and RTL’s $36 million investment for 51 percent stake in Broadband TV, the fifth largest MCN.