Collective Digital Studio Is Latest Video Net to Get Acquired

CDS to Merge With ProSieben's Digital Video Net Studio71

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Collective Digital Studio's talent network includes YouTube stars Rhett & Link.
Collective Digital Studio's talent network includes YouTube stars Rhett & Link.

The shopping spree for online video networks isn't over, as traditional entertainment giants continue to absorb their digital disruptors.

Collective Digital Studio -- the company whose network includes YouTube stars Rhett & Link and Vine star Logan Paul -- has been acquired by European media company ProSiebenSat.1 Group, which had picked up a 20% stake in CDS last year and will spin off the video network into a new company.

The German giant will merge CDS with its own European-centric digital video network Studio71 into a new company called Collective Studio71, in which ProSiebenSat.1 Group is investing $83 million for a 75% stake.

Collective Studio71 will be responsible for efforts that would span both CDS and Studio71 such as distribution and technology services. And CDS and Studio71 -- which are effectively overseas versions of each other and combine for 2 billion video views each month -- will split the video network operations according to their respective hemispheres. CDS will handle production, distribution and marketing in North and South America and some other English-speaking regions, and Studio71 will do the same for the United Kingdom and the rest of Europe.

"Studio71 and CDS are joined by the same digital DNA: a strong focus on developing innovative Web-only productions and branded entertainment formats, and intensive cultivation for our creators. The added value for our partners has top priority here. By this merger we will reach a global audience and can thereby offer additional marketing opportunities to advertising customers," said Christof Wahl, managing director of ProSiebenSat.1's digital division, in a statement.

The deal marks the latest example of a traditional entertainment giant acquiring a younger, digital version of itself to try to future-proof its business as people, especially kids, shift their attentions away from traditional TV shows to the new version of TV that's cropped up on sites like Google's YouTube.

Last year The Walt Disney Company bought Maker Studios. AT&T's and Chernin Group's internet TV-focused joint venture Otter Media picked up Maker's main rival Fullscreen. RTL Group -- which owns "American Idol" producer FremantleMedia -- acquired StyleHaul. Viacom took a minority stake in Defy Media. And Hearst took a 25% stake in AwesomenessTV, which had been bought by DreamWorks Animation in 2013.

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