2019 has seen an unprecedented number of companies acquiring or merging with other businesses. In the first chapter of this year’s Media Moments 2019 report, Chris Sutcliffe explores whether this a sign of inevitable decline, or if these businesses will be powerhouses for decades to come.
When we were writing last year’s Media Moments report, we decided not to include a chapter dedicated to the media mergers and acquisitions of 2018. It wasn’t that the mergers that year were unimportant – Meredith’s acquisition of Time, Inc in the January before last has had ramifications far beyond that twelve month span – but that it seemed to be business as usual for a beleaguered media industry.
Jonah Peretti of BuzzFeed, which for so long was held up as being the model for digital publishing success, made the stark pronouncement in November of last year that further mergers were not just inevitable but desirable, in order that publishers act as a unified bloc against the power of the duopoly, stating: “If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money.”
Heading into 2019, the wider consensus was that media M&A would continue apace, but that the overall price paid for some media companies would decrease in line with a weaker economy. In fact, the M&A mania ramped up over the course of the year, at both the regional and international levels, but that prediction has been widely borne out.
The reason we’ve decided to include this chapter this time around is that some of the media-specific acquisitions speak volumes about the priorities of the companies involved, and provide a bellwether for the industry as a whole.
Where are we now?
Much of the significant M&A activity in 2019 was in service of bolstering and broadening publisher’ existing offerings. Vice’s acquisition of Refinery29, which closed in November for a reported $400million, is undoubtedly an example of this. Even when the two publishers’ unduplicated audiences are combined to reach 53 million monthly unique users, that still lags behind competitors like BuzzFeed and G/O Media, so while that extra reach will certainly be welcome, the real value of the acquisition comes from elsewhere.
Vice, despite its counter-culture, tradition eschewing nature, skewed largely male. Refinery29 was quite the opposite, having stayed true to its mission of being for millennial women. Off the bat, then, the acquisition allows Vice and its advertising partners access to a new audience.