Discovery and Germany's ProSieben Sat.1 to Merge Digital Operations to Compete with Netflix and Amazon

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A deal unveiled Monday will see Discovery merge its Eurosport Player and joint venture 7TV with ProSieben's Maxdome platform.

Two of the world's leading broadcast networks, Discovery and Germany's ProSiebenSat.1, have fired a shot across the bow of Netflix and co announced plans Monday to merge their digital operations to form a single online platform.

Under the agreement, Discovery and ProSieben will merge their current digital joint venture 7TV with Discovery's Eurosport Player, the digital platform for the sports-focused Discovery subsidiary, and ProSiebenSat.1's Maxdome, the online platform for the network's films and TV series.

If the deal receives regulatory approval, the result will be a broad digital service with the volume and reach to potentially compete in Europe with the likes of Netflix and Amazon Prime.

The two companies said they plan to “rapidly scale up and invest” in the new merged platform and to create “bespoke” content for the service. Discovery and ProSieben said the service , which they predict will hit 10 million users in the first two years of operation, would offer a range of options for consumers, from ad-led catch-up services to SVOD premium pay tiers. The addition of Eurosport Player also means the group can offer top-tier sports content in addition to ProSiebenSat.1's Hollywood-heavy offerings.

The service is set to launch in the first half of 2019.

ProSieben and Discovery has invited other German broadcasters, including commercial network RTL and public channels ARD and ZDF, to join the platform. RTL, for its part, has said it isn't interested in participating in a SVOD platform together with its commercial competitors.

7TV CEO Alexandar Vassilev, an ex-Google and YouTube exec, will run the new, merged company with ProSiebenSat.1 boss Max Conze as head of the board of the joint venture and Discovery Networks International President and CEO JB Perrette representing Discovery on the board.

“This is an exciting next step in our strategy of reaching more viewers on more screens as the global leader in real life entertainment and international sports,” said Discovery CEO David Zaslav in a statement. “Together with ProSiebenSat.1, we are building a world class streaming service to nourish superfans in one of our most important international markets while also creating a new model for the future for viewers to enjoy their favorite content.”