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.
The parties haven’t reached a final deal, but the talks are in advanced stages and could conclude in a couple of weeks, said the people, who asked not to be identified because talks are ongoing. Viacom would pay less than half the $650-million valuation that AwesomenessTV received in 2016, a sign of the sagging market for online media companies.
Viacom has begun scooping up digital properties after years of being criticized for fighting the migration of media to the internet, including a lawsuit against Google. The idea is to better connect with the young viewers that have left Viacom channels MTV and Nickelodeon in favor of YouTube and Instagram. It acquired the online video convention VidCon and marketing firm Whosay and has commissioned dozens of web series.
Viacom’s digital studio is led by Kelly Day, who once worked at AwesomenessTV. Brian Robbins, AwesomenessTV’s co-founder and former chief executive, works at Viacom’s studio, Paramount Pictures.
Viacom stock was up 1% at $27.60 a share around 8:15 a.m. PDT. The stock has struggled in the last year, tumbling about 21% in the last 12 months.
Once one of the fastest-growing companies in online media, AwesomenessTV has struggled to turn its popularity among young viewers into a sustainable business, and the owners have soured on a money-losing venture. Comcast has a 51% stake in AwesomenessTV, while Verizon and Hearst Corp. own the rest.
Comcast acquired a stake in AwesomenessTV through its acquisition of DreamWorks Animation, the animation studio behind “Shrek” and “Kung Fu Panda,” while Verizon acquired its stake under outgoing Chief Executive Lowell McAdam.
AwesomenessTV signed a lease for a 90,000-square-foot space in Santa Monica in 2016. The venture was valued at $650 million when Verizon acquired its minority stake that year, and it fit alongside the Huffington Post and AOL in the phone company’s growing suite of online properties. Verizon’s incoming CEO, Hans Vestberg, has begun to reduce Verizon’s interests in media.
The valuation of most digital-media companies has plummeted in the last few years as Facebook and Google swallowed much of the online-advertising market. Dozens of companies that built businesses by distributing video and news on those sites have suffered. 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 watching his children forsake TV for YouTube and other online media.
The company amassed a network of tens of thousands of YouTube channels, for which it sold advertisements and advised on business matters. AwesomenessTV also produced an eponymous TV show for Nickelodeon; movies featuring popular online personalities Cameron Dallas and Lia Marie Johnson; and web series for brands such as “Royal Crush,” made in conjunction with the Royal Caribbean cruise line.
The growing audience for online video attracted further investment and increased the company’s valuation. DreamWorks Animation acquired AwesomenessTV in a deal worth as much as $117 million, and AwesomenessTV was valued at $235 million when Hearst acquired a minority stake.
After Verizon bought its minority stake in 2016, it handed AwesomenessTV a significant sales boost when it acquired programming for Go90, a short-form video service that was Verizon’s challenge to YouTube. Yet Verizon shut down Go90 this year and has been looking to extricate itself from AwesomenessTV as well.
Longtime media executive Jordan Levin took the reins at AwesomenessTV last year, succeeding Robbins. Robbins and Chief Operating Officer Brett Bouttier have since left the company.
Shaw writes for Bloomberg.