Here at MediaShift, we write a lot about how media and technology intersect. The last couple of months we’ve talked about the importance of mobile technology, cable companies, social media platforms, and business models for funding journalism. Well, this next story ties it all together. We are, of course, talking about NBCUniversal’s decision to invest $200 million in both BuzzFeed and Vox media. They aren’t the only traditional media company looking to court millennials by investing in established new media brands. A&E Networks, a joint venture between Hearst Corporation and Disney, invested $250 million in Vice for a 10 percent share in the company. Here’s one reason why they’re doing this: these partnerships will allow A&E and NBCUniversal greater leverage when they deal with advertisers. But how do the upstarts explain their “unicorn” valuations north of $1 billion? Especially as the bubble is growing in Silicon Valley. We’ll ask our experts Eunice Shin, director for Manatt Digital Media; Alex Weprin, deputy media editor at Politico; and regular guest Andrew Lih at American University. MediaShift’s Mark Glaser will host, with Jefferson Yen producing.
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MEDIATWITS BIOS
Mark Glaser is executive editor and publisher of MediaShift and Idea Lab. He is an award-winning writer and accidental entrepreneur, who has taken MediaShift from a one-person blog to a growing media company with events such as Collab/Space workshops and weekend hackathons; the weekly “Mediatwits” podcast; and digital trainings, DigitalEd, in partnership with top journalism schools. You can follow him on Twitter @mediatwit.
Andrew Lih is a new media journalist and associate professor of journalism at the American University School of Communication. He is the author of “The Wikipedia Revolution” (Hyperion 2009, Aurum UK 2009) and is a noted expert on online collaboration and journalism. He is a veteran of AT&T Bell Laboratories and in 1994 created the first online city guide for New York City (www.ny.com). Follow him on Twitter @fuzheado.
SPECIAL GUESTS
Eunice Shin is head of consulting for Manatt Digital Media and has 20 years of industry experience. Eunice has provided strategic consulting services as a trusted advisor to the major studios, new digital media platforms, and other leading media and entertainment and brand companies. Eunice is a thought leader in the latest disruptive innovations in the industry.
Alex Weprin is deputy media editor at POLITICO. He was previously senior editor at Mediabistro, where he led the company’s TVNewser blog. He has written about television for Broadcasting & Cable magazine, Variety, Cynopsis: Weekender and other outlets, and is a big New York Mets fan. You can follow him on Twitter at @alexweprin
BACKGROUND
Announcing the partnership on Buzzfeed’s blog, CEO Jonah Peretti wrote “All these deals were structured to assure BuzzFeed’s continued editorial and creative independence…the investment from NBCU and our rapidly growing revenue assures our financial independence…” It certainly can’t hurt to have that cash on hand. As it stands, Buzzfeed is projected to be valued at $1.5 billion, while Vox Media is valued at more than $1 billion and Vice at $2.5 billion.
But Politico’s Alex Weprin has another idea as to why Buzzfeed, Vox and Vice might be interested in partnering with traditional media. The additional revenue generated by A television arm would look very attractive if those companies wanted to file an IPO or sell ownership. People are still paying for cable bundles and they will be for the couple of years. In terms of advertising dollars, TV still reigns supreme. As part of the deal, BuzzFeed and Vox will share content with NBC Universal. Comcast announced last month they were working on a digital video platform to compete with YouTube and Facebook that will feature content from BuzzFeed and box along with Mic, Vice, Refinery29 and the Onion.
What do you think about the large investments in Vice, BuzzFeed and Vox Media? Do they represent a leap forward for old-line media companies or a hedge against the future? And how can they justify the massive valuations?
Jefferson Yen is the producer for the Mediatwits Podcast. His work has been on KPCC Southern California Public Radio and KRTS Marfa Public Radio. You can follow him @jeffersontyen.
