By Sahil Patel
Traditional media companies have taken a liking to investing in or acquiring YouTube multi-channel networks. Here’s the latest:
German broadcaster ProSiebenSat.1, through its Red Arrow Entertainment division, has acquired a 20% stake in Collective Digital Studio, an MCN that currently encompasses 600 channels on YouTube reaching more than 100 million subscribers and nearly a billion views per month. Neither ProSiebenSat.1 or CDS are disclosing the exact size of the investment, though we’re told that it’s definitely in the “eight figures.”
Red Arrow Entertainment is ProSiebenSat.1’s production/distribution group. The subsidiary oversees a collection of 15 international production companies in nine countries as well as direct relationships with all sorts of talent.
With the CDS investment, Red Arrow says it’s hoping to “significantly” expand in the digital space, with an aim toward backing more online creators and developing new content verticals. As part of the deal, Red Arrow will also handle global programming distribution for content coming out of this venture.
Conversely, this deal gives CDS more support in terms of providing its creators with opportunities outside of the YouTube ecosystem. The MCN already has Metacafe, which it acquired to experiment with off-YouTube distribution. (In fact, CDS used the underlying tech from Metacafe to build a custom video player for Rocket Jump Studios and, specifically, the second season of Freddie Wong’s “Video Game High School.”) But with the backing of ProSiebenSat.1 and Red Arrow, it’s not difficult to picture ways in which CDS can find online and offline opportunities for its talent. The company has already successfully expanded several of its top brands off YouTube, including “The Annoying Orange,” “Epic Meal Time,” and “Video Game High School.”
Primarily, though, the new funds will go toward building out CDS’ sales organization as well the continued growth of the network’s talent pool.
In August 2013, ProSiebenSat.1 formed its own MCN, the Germany-based Studio71, which generates more than 100 million views per month on YouTube. As part of the deal, CDS will deliver content to Studio71’s network. In return, marketing for new content developed by CDS will be handled in-house by SevenOne Media.
“Digital functions globally,” said Dr. Christian Wegner, an executive board member at ProSiebenSat.1, in a statement. “Having established a leading multi-channel network in the German-speaking region, we are taking the consequent next step with CDS to create a global player in what is a high-growth sector of the entertainment industry.”
Other notable traditional-media investments in the MCN space include, most notably and most recently, Disney’s acquisition of Maker Studios, as well as DreamWorks Animation’s purchase of AwesomenessTV last year. European broadcast conglomerate RTL Group has also made multiple investments in StyleHaul and BroadbandTV.