Viacom to Acquire AwesomenessTV [Updated]

Originally published: Friday, July 27, 2018.

Viacom has announced that they are acquiring AwesomenessTV Holdings, LLC (aka Awesomeness)! The media company and leading digital-first destination for original programming, has established an unparalleled connection to GenZ, which will live under Viacom Digital Studios (VDS) and play an important role in Viacom’s robust and growing premium content production ecosystem, drive additional growth at VDS, and strengthen Viacom’s established digital and social relationships and dominance in youth culture. Viacom has also announced that current AwesomenessTV CEO Jordan Levin, who has been with the company since May of 2017, will be leaving following a transition period post-acquisition.

Via Viacom's corporate blog:

Viacom Gets All Kinds of Awesomeness

AwesomenessTV Holdings, LLC (aka Awesomeness), a media company and leading digital-first destination for original programming, has established an unparalleled connection to GenZ – that coveted up-and-coming cohort born along with the tech revolution of the mid-1990s. Fed by strong relationships with top digital talent and influencers, Awesomeness has accumulated 6.4 million YouTube subscribers and another 158 million subscribers on its Awesomeness Network, becoming the premiere digital media network for the most digitally savvy cohort in history.

And now Viacom is acquiring Awesomeness, which will live under Viacom Digital Studios (VDS) and play an important role in Viacom’s robust and growing premium content production ecosystem, drive additional growth at VDS, and strengthen Viacom’s established digital and social relationships and dominance in youth culture.

“Awesomeness has done an incredible job building their brand into a digital media powerhouse for today’s most sought-after and hard-to-reach youth audiences,” said Kelly Day, President of Viacom Digital Studios and former Chief Business Officer of Awesomeness. “The team brings strong digital expertise, deep connections with top talent and influencers, and a robust branded content studio and creative agency that will accelerate the growth and scale of Viacom Digital Studios.”

Viacom is already a top player in youth culture, having curated strong audience connections with kids via Nickelodeon and young adults via MTV. The addition of Awesomeness’ young teen fan base further strengthens this broad demographic reach, while Awesomeness’ strong existing relationships with digital platforms, talent and influencers complements VDS’ existing efforts to reach these GenZ consumers on the mobile, social and digital platforms they call home.

While VDS has been growing briskly – more than tripling digital streams since 2016 and doubling YouTube subscribers over the past year, as total social views and watch time soared by 112 and 104 percent, respectively – Awesomeness’ dedicated sales force, branded content studio, and existing relationships with brands such as Hollister, Gatorade and Invisalign will further drive VDS’ growth and profitability. Awesomeness’ expertise across digital programming and distribution, production, talent management and audience development will also help fill out VDS’ still-growing staff.

With distribution deals with major SVOD players and its own Emmy-winning, youth-focused studios that have produced 200 hours of long-form television and feature film content, Awesomeness’ proven content development and production abilities are an especially good fit for Viacom, which has moved deliberately to ramp up its capabilities in this area recently: consolidating several operations across the Americas into Viacom International Studios to service global markets; moving to a studio model under which Nickelodeon, MTV and other brands will license and produce shows based on intellectual property for third-party platforms; and building Paramount Pictures’ Paramount Television production arm from scratch into a $400-million-and-growing annual business.

Awesomeness alumni have already been helping to power Viacom’s transformation in this increasingly digital and mobile age: VDS President Kelly Day, VDS Executive Vice President of Talent and Development Paula Kaplan, and Paramount Players President Brian Robbins – who co-founded Awesomeness in 2012 with Joe Davola – each joined Viacom directly from Awesomeness, a testament to that entity’s penchant for producing top-grade talent.

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Also, from Variety:

Viacom Acquires AwesomenessTV; CEO Jordan Levin to Depart

It’s official: Viacom closed a deal to acquire AwesomenessTV, a youth-oriented digital media company, as Viacom looks to expand its ability to reach digital-first audiences.

Terms of the deal were not disclosed. However, a source said Viacom is paying well below $300 million for the digital-media company. The final price tag is much less than AwesomenessTV’s $650 million valuation after the company’s latest investment in 2016.

Word that Viacom was in advanced talks with the company — majority owned by Comcast/NBCUniversal, with stakes held by Verizon and Hearst — leaked out earlier this week.

Awesomeness will be integrated into Viacom’s portfolio of brands and live within the Viacom Digital Studios division led by president Kelly Day [...], formerly chief business officer of Awesomeness.

According to Viacom, current AwesomenessTV CEO Jordan Levin, who has been with the company since May of 2017, will be leaving following a transition period post-acquisition.

Viacom sees AwesomenessTV as boosting its push to produce original premium digital programming with social video distribution for young, mobile audiences at scale. The ATV Network reaches 158 million unique users with about 300 million monthly views. In addition, AwesomenessTV brings with it a full production studio with an existing library of more than 200 hours of long-form TV series and feature films.

“Awesomeness has done an incredible job building their brand into a digital media powerhouse for today’s most sought-after and hard-to-reach youth audiences,” Day said in a statement. “The team brings strong digital expertise, deep connections with top talent and influencers, a world-class television and film studio, and a robust branded content team and creative agency that will accelerate the growth and scale of Viacom Digital Studios.”

Industry sources indicated that AwesomenessTV was not a good fit under majority owner Comcast/NBCU, which held a 51% stake. Meanwhile, minority shareholder Verizon just shut down Go90 — its ad-supported mobile-video service — which had a big deal with Awesomeness for original shows. Verizon took a $900 million hit against Q2 earnings for various one-time charges, most of which was related to the Go90 platform and associated content.

Awesomeness was co-founded in 2012 by Brian Robbins, who currently serves as president of Paramount Players at Viacom, and producer Joe Davola.

Viacom has recently been stepping up its investment in digital-media under CEO Bob Bakish. The company acquired VidCon earlier this year and is planning to expand the video-creator conference brand to London. The media conglomerate also recently bought Whosay, a New York-based influencer-marketing firm incubated by CAA that specializes in targeting young audiences online with branded content.

In 2013 DreamWorks Animation, under then-CEO Jeffrey Katzenberg, bought AwesomenessTV in a deal worth at least $33 million — one of the first traditional media companies to place a sizable bet on original digital-video content. Comcast picked up Awesomeness after it completed the $3.8 billion acquisition of DWA.

Two years ago, Verizon paid about $159 million to acquire its stake in AwesomenessTV, giving the digital-media outfit a $650 million valuation. That was double what Awesomeness was valued at when Hearst invested in the company in 2014.

After Robbins left AwesomenessTV last year, the company hired Levin, a veteran TV exec who helped launch the WB Network. This past May, president Brett Bouttier left the company after five and a half years with AwesomenessTV.

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Also, from TheWrap:

Viacom Acquires AwesomenessTV

Awesomeness CEO Jordan Levin will leave the company after a transition period

Viacom has acquired AwesomenessTV, the youth-focused digital media company, the company announced on Friday.

The deal pegs Awesomeness at a significant discount to its 2016 valuation of $650 million, a person with knowledge of the negotiations told TheWrap. Viacom did not share terms of the buyout in its announcement.

Awesomeness CEO Jordan Levin will leave the company after a transition period, according to Viacom. The company — which has targeted millennial and Gen Z viewers through an array of content across several social platforms, subscription-video-on-demand services, and thousands of YouTube channels — will integrate with Viacom Digital Studios.

“Awesomeness has done an incredible job building their brand into a digital media powerhouse for today’s most sought-after and hard-to-reach youth audiences,” Kelly Day, President of Viacom Digital Studios, said in a statement. “The team brings strong digital expertise, deep connections with top talent and influencers, a world-class television and film studio, and a robust branded content team and creative agency that will accelerate the growth and scale of Viacom Digital Studios.”

Awesomeness has 158 million subscribers across several platforms, leading to about 300 million views each month.

The acquisition signals another step in CEO Bob Bakish’s continued attempts to bolster Viacom’s digital strategy.Viacom bought VidCon, the online video conference beloved by teens, earlier this year. And there are already close ties between the two outfits: Day, who runs Viacom’s nascent digital studio, was previously at Awesomeness. Brian Robbins, co-founder and former CEO of AwesomenessTV, is now at Paramount Pictures, which falls under the Viacom umbrella.

Before Viacom’s deal, Comcast owned a 51 percent stake in Awesomeness, which it grabbed from Dreamworks as part of its buyout in 2016. Hearst and Verizon each owned 24.5 percent cuts of the company.

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Update (9/19) - Via Variety:

Listen: AwesomenessTV ‘Bargain of a Lifetime,’ Says Viacom Digital Chief

When Viacom acquired AwesomenessTV in July for what sources pegged at just over $50 million, more than a few eyebrows were raised considering the company had a $650 million valuation just a few years ago.

But in the latest episode of the Variety podcast “Strictly Business,” Viacom Digital Studios president Kelly Day characterized the pact as a steal of a deal.



“I will say that I think we’re going to wake up a year from now and find that we got the bargain of a lifetime,” said Day, who came to Viacom from AwesomenessTV last November. “I think the company is fundamentally worth more than the situation that was in front of them.”

Day is bullish on her former employer because the company both established a brand for itself with a young audience via social media and built a TV and film production division that generated hits like Netflix’s “To All the Boys I’ve Loved Before.” The decline in AwesomenessTV’s value, she believes is more attributable to a lack of consensus among its previous owners: Hearst, Comcast and Verizon, which was AwesomenessTV’s primary client through its now-shuttered Go90 business.

“Unfortunately, you had kind of a complicated ownership structure that was not easily able to resolve itself between the three owners,” she said. “I think maybe a little lack of cohesion about what the vision and strategy for the company should have been going forward. Obviously with Verizon essentially exiting the media business, you can say that was the impetus to put the wheels in motion to say, ‘Hey, maybe we should do something else with that asset.'”

AwesomenessTV made sense for Viacom because the brand’s resonance with teenage girls gave it a demographic sweet spot that will tuck it in nicely between Viacom’s portfolio of other young-skewing brands alongside MTV and Nickelodeon. While Viacom has since laid off 98 AwesomenessTV employees due to what Day described as duplication in back-office function, she’s excited to reinvigorate the brand. Another AwesomenessTV alum, Paramount Players chief Brian Robbins, is already working on a new slate of films to fit the brand’s needs.

Also in this episode of “Strictly Business,” Day discussed the strategic rationale behind other Viacom digital-minded acquisitions including WhoSay and Vidcon, which she indicated could see an expansion beyond annual events to a brand active all year long. In addition, she walked through Viacom’s efforts to attract young eyeballs to original content across digital platforms.

“Strictly Business” is Variety‘s weekly podcast featuring conversations with industry leaders about the business of entertainment. Listen to the podcast below for the full interview, or check out previous “Strictly Business” episodes featuring comedian/actor/producer Kevin Hart, ICM Partners agent Esther Newberg, and HBO chairman/CEO Richard Plepler. A new episode debuts each Tuesday and can be downloaded on iTunes, Spotify, Google Play, Stitcher, and SoundCloud.

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Update (8/19) - via Deadline:

AwesomenessTV Lays Off 50% Of Staff Following Viacom Acquisition – Update

UPDATED to reflect layoff information reported to California’s employment department: Just weeks after touting its acquisition of AwesomenessTV, Viacom began handing out pink slips.

AwesomenessTV said it would fire 98 employees at the teen-focused studio’s Santa Monica offices, or about 50% of its workforce, according to filing made with the California Employment Development Department. The media company said would lay off most of the employees on or shortly after October 15, with the remaining 15 people losing their jobs December 31.

“As we begin to integrate Awesomeness and streamline the organization within Viacom, a number of positions were impacted yesterday,” a Viacom spokesperson said in a statement to Deadline. “We are grateful for the many contributions of each individual and continue to work diligently to ensure a smooth transition.”

Jordan Levin, the company’s CEO, departed the company last week.

Initial reports, which the company declined to confirm, underrepresented the number of people affected by the job cuts at around 20. But the layoff was sizable enough to trigger a federal WARN Act notification, which occurs whenever an employer plans to cut more than one-third of its workforce. Here’s Awesomeness’ filing.

One of those affected by the layoffs described a grim scene, where employees were contacted on their personal cell phones and called into a conference room to learn their job had been eliminated. The cuts affected senior-level staffers, including the head of Awesomeness Films, the head of documentary and drama, and the heads of music and casting, as well as accountants, legal affairs and other support staff, according to the WARN Act filing.

“It felt like The Hunger Games,” said the source, who requested anonymity for fear of losing the severance package.

AwesomenessTV reaches about 158 million subscribers across its network, and boasts 300 million monthly views.

Viacom pursued the acquisition, seeing the Gen-Z media company as filling the millennial-sized gap in its Nickelodeon and MTV audiences. AwesomenessTV was viewed as helping to accelerate Viacom’s digital ambitions under its Viacom Digital Studios.

AwesomenessTV’s options were limited after Verizon decided to abandon its Go90 video service, source say. The wireless giant was once wildly enthusiastic about the digital media company, forking over $159 million for a one-quarter stake and signing a multiyear content deal worth around $150 million.

Fortunes for Awesomeness changed once Verizon’s board name Hans Vestberg as CEO — a technologist who has been responsible for overseeing deployment of next-generation 5G mobile services. That signaled to investors that Verizon would not look to continue down the path of diversifying Verizon’s businesses by investing in digital content.

Once the cash from Go90 was gone, Awesomeness began considering its options, including its ultimate sale to Viacom.

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