August 14, 2015
NBCUniversal just made a $200 million investment in digital publishing house Vox Media, as part of a strategy to collaborate on programming, advertising and technology. According to comScore, Vox, a hub for eight digital media brands, had 54 million unique U.S. visitors in June, about 41 percent of who are 18 to 34 years old. NBCUniversal also plans to invest another $200 million in BuzzFeed, valued at $1.5 billion. The two deals are more evidence of a trend of established media companies partnering with digital startups.
According to The New York Times, one of the chief attractions of Vox for NBCU is its youth demographic, which is faltering in TV ratings. For digital startups, the lure is earnings. Valued at $1 billion, Vox sites include sports-centric SB Nation, video gamer Polygon, technology-focused The Verge, and Vox.com. BuzzFeed is known for its quizzes, shareable lists and, now, journalism. Vox would not disclose revenue or profit numbers.
Similar to Vox, BuzzFeed also attracts a youthful demographic. Out of its 80 million unique U.S. visitors June, about 54 percent was 18 to 34 years old.
Digital media companies, notes NYT, are “fast approaching the size of traditional media rivals like Time Inc., which has a market capitalization of $2.4 billion, and Meredith Corporation, at $2 billion.”
NYT also explained the allure of an investment rather than acquisition. For the larger traditional media company, an investment is less of a risk and more of an opportunity to learn about the digital space. For digital media companies, an investment lets them expand and remain independent.
Vox Media chief executive Jim Bankoff notes what his company and NBCUniversal have to learn from one another: Vox has expertise in creating digital brands for millennial audiences and new advertising formats, while NBCU brings experience in building audiences and creating long-form and short-form videos. NBCUniversal chief executive Stephen B. Burke declined to elaborate on how the two companies will collaborate.