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Studio71 Breathes New Life Into MCN Business Model Overseas

When Disney laid off thousands of content creators at its Maker Studios division in February, it sent the clearest signal yet of how troubled the so-called multichannel networks (MCNs) had become. While aggregating billions of digital video views had attracted a rash of M&A activity, like Disney’s 2014 acquisition of Maker, other MCNs like Fullscreen and AwesomenessTV have since pivoted to businesses more oriented around original-content creation.

But if MCN is a dirty word, don’t tell Studio71. The company that rode the MCN wave while known as Collective Digital Studio is sticking to its business model, but with a twist it will pitch at MipTV: It’s partnering with an array of overseas broadcasters to sell a combination of TV and digital inventory.

Studio71 emerged from the now defunct Hollywood management firm the Collective and began reshaping itself in 2015 when German broadcaster ProSiebenSat.1 bought a controlling stake. Earlier this year, France’s TF1 and Italy’s Mediaset took smaller stakes.

Studio71 CEO Reza Izad is hoping the initial trio of investors will be the anchor tenants of a broader consortium of partners.

“Our focus is on building an incredible network in Europe and using it as a base to do this around the world,” he said.

Each of these broadcasters has the same goal in investing: offsetting the declines in ad revenue that began as younger audiences fled TV for digital. To keep those viewers and give advertisers the opportunity to buy at scale, they handed over short-form digital versions of their hit series to Studio71, which coupled that inventory with content from the company’s own roster of influencers.

Clips of a hit series like the German version of the unscripted format “The Voice,” for instance, are bundled with the latest videos from Studio71’s talent stable, whether that’s an American-bred global phenomenon like prankster Roman Atwood or a YouTube-based program popular in a specific territory, like Germany’s “Last Man Standing” (see image above).

For “The Voice,” Studio71 has created extra content and placed ads there that can be sold to its TV sponsors. “Things like that used to be impossible,” said Ronald Horstman, managing director of Studio71 for ProSiebenSat.1, “but we made it happen by bringing these two worlds together.”

Like Maker, Studio71 utilizes a network of content creators. But the reason Studio71 has been able to persist with the MCN model is that the company never let its base of affiliates get too big; while leading MCNs spread themselves thin across tens of thousands of influencer channels, Studio71 has stuck to a paltry 1,200 — all the better to take a more customized approach to revenue opportunities like branded content.

Studio71 doesn’t just aggregate a bunch of kids talking to cameras in their basement, either; there are deals in place with established talent like The Rock and Shay Mitchell for their own YouTube channels. Earlier this month, the company tapped Tapestry Films president Michael Schreiber to head a new scripted division, which should help service the increasing group of buyers, from cable networks to streaming platforms including Verizon’s Go90 and YouTube Red.

The Studio71 model could be appealing to marketers in territories where the shift of ad dollars from TV to digital isn’t happening as swiftly. Some overseas broadcasters also need help optimizing their own digital inventory; TF1 already owns an MCN called Finder, which is being rechristened Studio71 France.

But international media companies aren’t oblivious to digital opportunities. ProSieben rival RTL doesn’t take the Studio71 approach with the two leading MCNs in which it has stakes, Stylehaul and BroadbandTV; RTL signaled in January its interest in exploring “strategic alternatives” for BroadbandTV.

What Studio71 is doing now may take the MCN model in a distinctly international direction, but it doesn’t deviate from the core strategy. “We haven’t pivoted that hard; I would argue we haven’t really pivoted at all,” Izad said. “We have always said the creative person or the intellectual property is at the center of our business.”

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