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Warner Bros. to buy the rest of digital video company Machinima

Warner Bros. to buy the rest of digital video company Machinima
A Machinima show based on a tournament featuring top players of the video game "Mortal Kombat X" aired on the CW. (Machinima)

Warner Bros. has signed a deal to buy the gamer-focused YouTube network Machinima in order to expand the movie and TV studio's digital video business, the company said Thursday.

Burbank-based Warner Bros., the studio behind film franchises like Harry Potter and DC Entertainment, was already a major investor in Machinima starting in 2014.

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The new deal, which was expected, will make Machinima a fully owned unit of the entertainment giant's recently created Warner Bros. Digital Networks arm.

Financial terms were not disclosed. A person familiar with the deal said it values West Hollywood-based Machinima at about $100 million.

With Machinima now wholly under its control, Warner Bros. hopes to tap deeper into the network's loyal audience of young consumers who devour video game-related programming — especially content related to Warner's own franchises including DC.

Since Warner first invested in the company, Machinima has tried to expand its audience beyond its YouTube fan base. Besides the popular Google-owned site, Machinima provides video programming for services including Playstation Vue, Amazon Prime and the CW network.

Traditional Hollywood studios including Warner Bros. have been investing in digital video makers to appeal to tech-savvy millennials.

Warner Bros. created its Digital Networks division in June under the leadership of its television group president, Craig Hunegs, to better adapt to the shift of audiences to online outlets.

In another response to the online wave, the studio in February acquired DramaFever, a streaming-video subscription service that specializes in South Korean soap operas and movies.

The Machinima acquisition comes as Warner Bros' parent, Time Warner, is in the process of being acquired by AT&T for $85.4 billion — a deal partly motivated by the prospect of streaming video directly to consumers through their smartphones.

Follow Ryan Faughnder on Twitter for more entertainment business coverage: @rfaughnder

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