Yeah1 Group Corp. has approved a plan to sell the California-based Scale Lab after YouTube announced termination of its content hosting service agreement with the Vietnamese media company.
The divestment of 100 per cent stake in the American company aims “to protect investment capital and maximize investors’ interest”, Yeah1 said in a statement posted on its website.
Yeah1 acquired ScaleLab for $20 million just one month ago, of which the Vietnamese company immediately paid $12 million and the remaining will be cleared in line with ScaleLab’s business performance.
ScaleLab has 1,750 influencers encompassing over 400 million YouTube subscribers, and garnering 3 billion YouTube views per month. As a result of the acquisition, Yeah1 has increased its the total monthly YouTube views under its umbrella to 6.9 billion and total YouTube subscribers to 610 million throughout the world.
The pending divestment of ScaleLab comes after YouTube announced it would terminate its content-hosting service with Yeah1 following an unspecified channel management incident involving SpringMe, in which Yeah1 owns 16.9 per cent.
Last year, Yeah1 acquired Thailand-based multi-channel network, SpringMe, as well as France-based content creator, Something Big.
The termination of YouTube’s content hosting service with Yeah1, which takes effect on March 31, means the Ho Chi Minh Stock Exchange-listed company will not be allowed to aggregate and manage revenue from third-party YouTube channels.
The incident has dealt a hard blow to Yeah1 as its shares plummeted 27 per cent over the last week.
Yeah1 Group was founded in 2006 and operates TV channels, movie studios, YouTube networks, as well as a digital publishing division. In June2018, Yeah1 Group became the first media company to be listed on the Ho Chi Minh Stock Exchange.
Yeah1 earned revenue of VND1,658 billion ($72 million) and after-tax profit of VND180 billion ($7.8 million) last year, a year-on-year increase of 97 per cent and 119 per cent respectively.