YouTube multi-channel network Collective Digital Studio is going multi-national.
The West Los Angeles MCN announced today that it had merged with Studio71, a multi-channel subsidiary of German media conglomerate ProSiebenSat.1 Group.
The resulting company, called Collective Studio71, will be 75 percent owned by ProSieben and 25 percent owned by the founders of CDS, Michael Green and Reza Izad. ProSieben will invest $83 million into the venture.
CDS is known for a number of YouTube shows, including “Video Game High School,” “Rhett and Link” and “Annoying Orange.” A number of the MCN’s shows have also been adapted into cable television shows, including “Fred” on Nickelodeon and “Epic Meal Empire” on FYI Network.
ProSieben has numerous television, radio and online media properties in Germany. By merging CDS into Studio71 its online presence will be strengthened.
“From an advertising perspective, we are clearly driving the demo that is moving away from traditional TV. There’s a lot of value in that all around the world,” Green said. ProSieben’s deep pockets will also give Collective Studio71 a “war chest.”
ProSieben made an initial minority investment in CDS in March 2014 and the American company was providing video content to Studio71. CDS and Studio71 will remain autonomous subsidiaries of the merged entity. Studio71 executives will lead United Kingdom and European operations and CDS executives handling the Americas and other English-speaking territories. Christof Wahl, a managing director at ProSieben, will oversee the combined company.
The branded content relationships CDS has developed with Fortune 500 advertisers, such as Verizon, Dodge, Procter & Gamble and Sony PlayStation, will give ProSieben more ways to make money from its online content in the United States. In Germany, ProSieben’s advertising relationships will also be beneficial.
“They have profound relationships with ad agencies in that territory. In Germany, we can leverage their sales infrastructure to create higher CPMs for the content that is being viewed in those territories,” said Green. “That is a concept that drives value and, if we can replicate that in other territories, that will help us scale.”
Technology reporter Garrett Reim can be reached at [email protected]. Follow him on Twitter @garrettreim for the latest in L.A. tech news.
