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Viacom (Finally) Bets (A Little) on YouTube, by Investing in DigiTour

The people who own MTV invest in the people who bring YouTube stars to the stage.

DigiFest NYC 2015
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.

Viacom used to be the center of kid culture, but that was a long time ago.

Now it is trying to find a way back in. Here’s one strategy: The cable programmer is putting money into DigiTour Media, a company that makes money from YouTube stars.

DigiTour puts on concerts and tours featuring talent that became famous on YouTube as well as other youth magnets like Snapchat and Vine. The two companies aren’t disclosing financial details, but people familiar with the investment say Viacom, along with investors including LionTree and Slow Ventures, is putting $10 million in DigiTour. The company has previously raised around $2 million from backers including Ryan Seacrest and Conde Nast parent company Advance Publications.

DigiTour CEO Meridith Valiando Rojas came out of the music business, where she figured out that social media could help generate attention for recording stars. Now she has flipped that idea around, by turning social stars into live entertainers. Last year, DigiTour sold more than 100,000 tickets to events in cities across the country.

Other people who specialize in kids and video are getting into the live business, too. But it’s still unclear how big this will be, and whether a company like DigiTour can create standalone brands, or if it will always be dependent on the star power of certain acts — like every other concert promoter.

Related: Sources say that earlier this year DigiTour was in talks to sell the company to LiveNation, the world’s biggest concert promoter, but the deal fell through.

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