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Another YouTube Network Finds an Exit: Collective Links Up With Germany's ProSieben

A flashback to the kind of deals we saw in 2014.

Collective Digital Studio
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.

Last year, big media companies went on a shopping spree and picked up several YouTube video networks. This year, they haven’t seemed interested.

But here’s an exception: German media conglomerate ProSiebenSat.1 Group is buying Collective Digital Studio, a YouTube network best known for distributing properties like Rhett and Link, The Annoying Orange, and Epic Meal Time.

ProSieben, which already owned 20 percent of Collective, is combining it with Studio71, its own Web video unit, and calling the combined company Collective Studio71.

ProSieben says it will put $83 million into the new venture, at a post-money valuation of $240 million, and will own 75 percent of the new company. Collective’s founders will own the rest, even though their company generates 1.7 billion of the combined company’s 2 billion monthly video views. (Update: An earlier version of this story, based on a press release from ProSieben, reported that the new company’s value would be $240 million pre-money; ProSieben has amended their release.)

Collective co-founders Michael Green and Reza Izad say the idea behind the deal is to take advantage of synergy between the two companies: Collective will focus on building out its reach in the U.S., while ProSieben’s Studio71 team will focus on Europe.

The Web video landscape is starting to change, primarily because of Facebook’s newfound interest in competing with YouTube. But this deal looks a lot like the ones we saw last year, when video networks that made most of their money on YouTube found homes with bigger media companies.

Disney kicked off a wave of transactions by buying Maker Studios, in a deal that could ultimately value the company at $950 million. Other, smaller deals included RTL’s acquisition of StyleHaul, Otter Media’s purchase of Fullscreen and SoftBank buying DramaFever.

One deal we haven’t seen: A long-discussed rollup of comedy sites Funny or Die, The Onion and CollegeHumor. I still wouldn’t be shocked to see Viacom pick up one of those properties eventually.

This article originally appeared on Recode.net.