As part of an emerging merger and acquisitions trend in the online content space, both Demand Media and Jukin Media have each snapped up small independent content creators for undisclosed amounts.
Demand, of Santa Monica, purchased Leaf.tv, a lifestyle video content creator. In an unrelated deal, Jukin, a viral video library in Culver City, purchased People Are Awesome, a YouTube channel that makes video compilations of people doing sensational things, often extreme sports.
Though upstart content creators have multiplied over the past couple of years, on YouTube and on other platforms, they are now being bought up by larger competitors. YouTube multichannel Fullscreen, for example, acquired Rooster Teeth in November and social media studio McBeard Media in May. Danny Zappin’s Zealot Networks has picked up over a dozen companies in the last year, including media startups New Media Rock Stars and ViralNova.
Jukin, which owns, manages and licenses a library of more than 20,000 viral videos, saw the acquisition of People Are Awesome as an obvious addition to its original content efforts.
“People Are Awesome fits perfectly into our portfolio of brands that we are incubating and creating,” said Chief Executive Jonathan Skogmo, noting that the company could save money by licensing its video clips through Jukin and could leverage existing advertiser relationships.
Leveraging resources is also why Leaf.tv chose to be acquired by Demand Media.
“I’m excited that our audience will continue to experience all of our great content under the Leaf.tv brand, while our relationship with Demand allows us to tap into their resources to explore new product features and categories,” co-founder Erin Falconer said in a statement.
Though Demand Media has struggled in recent years, its strength as an Internet-media company has been its ability to bring a diversified portfolio of content companies, such as eHow, Livestrong and Cracked, under one roof. That has allowed Demand to negotiate higher advertising rates and to share content production resources.
Increasingly that is a strategy that other media companies want to employ too.
“There’s a fragmentation in the marketplace, so naturally we need to come together,” said Skogmo. “You will see a surge right now in content driven M&A.”
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