This week we find out why investors are bullish on online media startups, and we find out how the Philadelphia-based startup Billy Penn is producing local news coverage aimed at younger readers.
PART 1: Why investors love media startups
Digital media startups like Vice, BuzzFeed and Vox Media have grown quickly thanks to hundreds of millions of dollars of venture capital. We find out why investors are so willing to bet on these new companies instead of putting their money into established news providers.
Reporting by Tatiana Darie.
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A look at the numbers:
- Vice Media landed a $250 million investment in September from Technology Crossover Ventures, a Silicon Valley–based company that has Facebook, Spotify and Netflix in its portfolio. That financing followed a previous $250 million investment from A&E Networks, a joint venture owned by Hearst and Disney. The investment brings the total valuation of Vice Media to about $2.5 billion.
- BuzzFeed raised $50 million in new funding in August from the venture-capital firm Andreessen Horowitz, which placed the company’s total value at nearly $850 million. This article from Slate helps explain BuzzFeed’s valuation, saying the company “has walked a fine line between new-media platform and technology-first startup.”
- Vox Media recently landed a $46.5 million investment from General Atlantic, an investment firm with offices in New York City and Connecticut. The latest financing puts Vox Media’s valuation at roughly $380 million. That far exceeds the $250 million Amazon’s Jeff Bezos paid for the Washington Post in 2013. (For more on Vox Media’s operation and strategy, check out our previous report, as well as our Q&A with Chairman and CEO Jim Bankoff)
PART 2: Targeting young local readers at Billy Penn
Billy Penn is a startup news operation in Philadelphia that aims to provide local, mobile-friendly news specifically for residents under age 35. We learn from the site’s editor, Chris Krewson, how they hope to attract a younger audience with a mix of curated news and social content.
Reporting by Katy Mersmann.
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For more information:
As this article from Nieman Lab explains, Billy Penn is “developing a voice for the site that’s punchy and direct,” which has included “some kitschy things, like live-tweeting a gubernatorial debate in emoji, a weekly Spotify playlist that chooses songs to summarize the week in news, or a bracket to determine the Ultimate Philly Thing.” The article also profiles the genesis of Billy Penn and provides a more detailed explanation of the organization’s internal workings.
As CJR points out, Billy Penn is part of a batch of news-related digital startups being launched in a city that has seen several previous attempts eventually shut down.
Reuben Stern is the deputy director of the Futures Lab at the Reynolds Journalism Institute and host and co-producer of the weekly Futures Lab video update.
The Reynolds Journalism Institute’s Futures Lab video update features a roundup of fresh ideas, techniques and developments to help spark innovation and change in newsrooms across all media platforms. Visit the RJI website for the full archive of Futures Lab videos, or download the iPad app to watch the show wherever you go. You can also sign up to receive email notification of each new episode.
