Most Read
Image 01 Image 02 Image 03

Big Internet Gets Bigger: NBC buys stakes in Vox and Buzzfeed

Big Internet Gets Bigger: NBC buys stakes in Vox and Buzzfeed

The push toward conglomeration continues, so where does that leave “the blogosphere”?

Comcast subsidiary NBC Universal recently purchased large shares of Buzzfeed and Vox Media. NBC Universal, “owns and operates a valuable portfolio of news and entertainment television networks, a premier motion picture company, significant television production operations, a leading television stations group, world-renowned theme parks, and a suite of leading Internet-based businesses.”

With NBCU sinking about $200 million into each respective media conglomeration, both Vox Media and Buzzfeed are reportedly valued at over $1 billion each. Though Buzzfeed is valued around $1.5 billion.

Re/code reports:

…in addition to the NBCUniversal investment, the two companies now have a commercial partnership. That means, among other things, that they will collaborate on digital advertising, will work together on video advertising and video programming, and that you will likely see Vox Media employees more frequently on NBCU-owned networks like CNBC. (Re/code already had and continues to have a news partnership with CNBC).

Does this mean proliferation of Voxsplaining and cat gifs? Will the internet overtake television?! Is the future NOW?!

So why invest in digital media? And for sites like Buzzfeed and Vox Media who have seen exponential growth the last few years, why sell? Re/code explains:

The premise for both investments is relatively straightforward from NBCU’s perspective: The company, which has more or less ignored digital publishing since Comcast acquired it a few years ago, gets significant stakes in fast-growing digital publishers. That may help them learn a bit about the industry, and it will also make it easier for them to acquire one or both companies if it wants to pull that trigger down the road.

The trade-off for Vox Media and BuzzFeed is also fairly easy to parse: The two companies give up a chunk of equity for cash, which they can use to fuel their significant growth ambitions. They also get strategic relationships with one of the biggest players in the TV world — which still dwarfs digital publishing when it comes to ad dollars and overall revenue.

Increasingly, digital media outlets give traditional media outlets a run for their money. Print publications continue to struggle as consumers preference for web-based news and entertainment grows.

Fortune explains further:

So what these new-media entities need most is money (and perhaps a bit of old-media prestige). Comcast has plenty of that, thanks to its cable TV, ISP, and movie businesses. Getting that cash also gives Vox and Buzzfeed a broader reach—and it allows them to brag about being “unicorns” for passing the $1 billion mark.

So what does Comcast/NBCUniversal get out of these kinds of deals? For the most part, it means they get a hedge against the future. Rubbing shoulders with sexy new-media upstarts like Vox and BuzzFeed has a certain cool factor to it, and there’s the possibility of the cable provider using new media content for its various broadcast properties. The larger rationale is that having a chunk of a couple of new-media pioneers gives old media companies a window into the future of content, especially that favored by millennials.

Giant money-printing businesses like Comcast are rarely innovative enough to see the future coming. Even when they do see what’s down the pike, they usually fail to adapt as quickly as they need to, simply because the move so slowly. They need to acquire other, more nimble assets in an attempt to inject fresh thinking into their holdings. That’s why Comcast Ventures invested in what became SB Nation, the forerunner of Vox.

The unanswered question is whether Vox and BuzzFeed will actually provide enough value to justify the investments that Comcast/NBCUniversal is making. Will either one of the new-media startups go public? Perhaps, and most likely BuzzFeed will be the first. That could provide a payoff. But if a payoff doesn’t happen, will Comcast get enough out of its holdings? In the long run, it may not matter. The company has to spend that money somewhere, and hedging its bets on the evolution of content seems as good a gamble as any.

Even on the right, media companies are gobbling up once independent sites. Take Salem Media for example, who owns Hot Air, Townhall, Twitchy, and most recently, RedState. In many aspects, these buyouts, mergers, and partnerships have changed the landscape of the political right’s blogosphere for the better. The conservative point of view is is more readily available to a wider audience than it was in years past, which in my book is a huge win. We’re also able to compete with other large left-leaning sites in ways we weren’t able to in years past.

On the flip side, pushing content from smaller sites up through the barrier to the mainstream has become increasingly difficult.

My personal hope is that the trend to join large media orgs doesn’t eventually render the small-scale blogosphere discouraged. After all, it was Andrew Breitbart’s mantra that an essential component of the America-saving cocktail was, “more voices, not fewer.”

Follow Kemberlee Kaye on Twitter @kemberleekaye

DONATE

Donations tax deductible
to the full extent allowed by law.

Comments

Subotai Bahadur | August 15, 2015 at 7:10 pm

Even on the right, media companies are gobbling up once independent sites. Take Salem Media for example, who owns Hot Air, Townhall, Twitchy, and most recently, RedState. In many aspects, these buyouts, mergers, and partnerships have changed the landscape of the political right’s blogosphere for the better. The conservative point of view is is more readily available to a wider audience than it was in years past, which in my book is a huge win.

No, the Institutional Republican point of view has become more available through the buyouts. Those sites have marginalized the Conservative point of view.

    I’ve given up on the Republicans, what with their eagerness to surrender to the corrupt/criminal Dem/Lib/Socialist/Marxists at every opportunity. I still have some (faint) hope for Conservatives, however.

    As for the NBCU buyout of Vox and Buzzfeed… Vox is no loss; they’ve never even pretended to be anything but a liberal mouthpiece. Buzzfeed has lost any credibility it might have had. I’ve had them listed as “questionable”, but allying themselves with the Dem/Lib/Socialist/Marxist mainstream media has moved them into the “not worth bothering with” category.

Just when it seems NBC can’t get any lower, they bring out their drilling rig again…

In many aspects, these buyouts, mergers, and partnerships have changed the landscape of the political right’s blogosphere for the better.
*************************************
bull.
in every one that you listed they have slid to the left.

How on earth is Vox worth over one billion dollars?

Sounds like NBC is setting up its stock for a short-sell. Who would’t want to invest in a media company which features such well-respected journalists as Brian Williams, Al Sharpton, Ezra Klein and Matt Yglesias?

Professor, when they come waving money at you for LI, hold out for at least a billion.

Why, the comment section alone is worth at least that much! 😀

Comcast/NBC has lots of cash. In normal growth environments, they would be investing in expanding their core businesses, but regulation, slow growth, and Obamacare costs make that riskier than it was even a few years ago. Low interest rates mean sitting on the cash doesn’t earn any return.

That leaves three alternatives. They can pay the excess out in dividends, but too much at once might get stockholders expecting more next year. They can buy back their own outstanding shares to improve their capital position. Or they can buy other existing companies.

– –

Many big companies have already been doing one or more of those things. Mergers and Acquisitions seems to be the current trend. But most buy companies in the same business, so they can improve productivity by eliminating duplication (cutting jobs). This seems more like a gambler’s play: one is already very popular and successful, the other more of a long shot with potential.

Font Resize
Contrast Mode
Send this to a friend