To woo younger generations of viewers who watch videos online and on mobile devices, traditional television studios are rapidly snatching up venture capital backed online video startups, known as multi-channel networks (MCNs). Time Warner Inc. (NYSE: TWX), German television company ProSiebenSat.1 Media AG and Walt Disney Co. (NYSE: DIS) have each made recent purchases in the space.

MCNs are the latest step in the evolution of online video, first popularized by quirky user-generated clips on YouTube, which Google Inc. (Nasdaq: GOOG) bought for $1.65 billion in 2006. The demographics of the audience are clearly attractive to TV advertisers too. Hit shows on MCNs have millions of Generation Y and Z viewers. For example, PewDiePie, a 24-year-old Swedish gamer, boasts 24 million subscribers.

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