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IAC May Buy Korean Video Site DramaFever

It's one of several video sites that have gone on the market this year.

Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

DramaFever, a Web video service that specializes in Korean movies and TV shows, is looking to raise money or sell.

One potential buyer: Barry Diller’s IAC.

Sources say DramaFever, which has raised a reported $11.5 million in debt and equity, has been looking for new money, or a buyer, for several months. It’s one of several video startups that have sold or gone on the market this year, and like many of those it has drawn attention from strategic investors.

People familiar with DramaFever say that IAC, which already owns Web video hub Vimeo, is in talks with the company, which offers free ad-supported videos, as well as a $10-a-month subscription service.

Vimeo specializes in free videos, and sells premium subscriptions to professional users who want extra features like additional storage space; it has also recently started pushing an iTunes-like video-on-demand store.

DramaFever has also talked to AMC Networks, which has invested in the company, about helping the cable programmer launch its own Web video subscription services.

I’ve heard a wide range of prices floated for DramaFever, ranging from $80 million to $140 million. One concern raised by people who have kicked the company’s tires: A chunk of its revenue is dependent on a sub-licensing deal with Hulu.

DramaFever and IAC reps declined to comment.

There’s been a flurry of M&A interest in Web video startups this year. In early 2014, many investors seemed bearish on the industry, and Machinima, which had previously tried to raise as much as $70 million, had to settle for an $18 million debt deal led by Warner Bros.

But in March, Disney bought YouTube network Maker Studios in a deal that could eventually be worth up to $950 million, and Web video got hot again.

Subsequent transactions include a $25 million round for Tastemade, which is positioning itself as a Food Network for the Internet, and Otter Media’s purchase of Fullscreen, which valued that network around $250 million. Stylehaul, a fashion-oriented video networks, is also on the block.

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