Turner's strategic investment as part of a $45m round for Refinery29 is part of an ongoing trend that likely spells the end for what we think of as 'old media'.
Broadcaster Turner’s investment in US-based digital media company Refinery29 last week, made as part of a strategic partnership agreement, gives an interesting indication of where the sector is heading, and how corporate investors may play a part.
Refinery29 secured $45m in a round led by Turner that also included Scripps Networks Interactive, the media company that owns properties including The Food Network and The Travel Channel, and which valued it at $500m according to the Wall Street Journal.
The round took the total raised by Refinery29’s to $125m since it was launched in 2005, its earlier funding coming from media group Hearst, marketing firm WPP, Floodgate, Lead Edge Capital, First Round Capital, Lerer Ventures, Stripes Group and Scripps Networks Interactive, which invested in the company’s last round, a $50m series D closed in April 2015.
Refinery29 runs a digital media site focused on women, which publishes articles on subjects such as fashion, beauty, news, entertainment, technology and lifestyle. In the past year or two it has followed the lead of platforms like Vice and Buzzfeed by diversifying heavily into video and targeting mobile users more heavily, and had grown its reach across all platforms by 226% to more than 225 million between its last round and this one.
Turner invested as part of a strategic collaboration that will involve Refinery29 creating content for Turner’s channels, which include TBS, CNN and Cartoon Network, and forming partnerships on advertising sales. Refinery29 plans to spend the cash on further developing and diversifying its video output, and to expand into new markets following the launch of UK and German editions over the past few months.
Speaking about the partnership deal, Philippe von Borries and Justin Stefano, cofounders and co-chief executives of Refinery29, said: “Turner’s portfolio consists of many of the world’s strongest media properties and is a true leader in global content creation.
“We are excited to collaborate with the Turner team to expand Refinery29 into new territories, expand and develop our leading voice in video content for women, as well as integrate into some of Turner’s most exciting franchises and platforms.”
The investment follows a similar deal Turner struck with digital media news platform Mashable in April this year, leading a $15m round as part of an agreement to collaborate on video production, technology and advertising. Mashable subsequently laid off about 30 staff members the following week, most of which were part of its news and politics team, as it restructured to concentrate on the new direction.
Turner has in fact been steadily increasing its focus on digital content in recent months, acquiring a majority stake in livestreaming technology provider iStreamPlanet in August 2015, putting $100m into expanding sports media platform Bleacher Report and a further $20m into beefing up CNN Digital into a more mobile-focused content platform.
The Refinery29 investment comes only days after Turner’s parent company Time Warner paid $583m for a 10% stake in online streaming service Hulu, agreeing at the same time to provide content from Turner channels. The raft of deals suggests Turner is aware of the need to boost its digital offering, but also of how new media can link with traditional media in order to target different demographics.
The other Hulu partners – Comcast, The Walt Disney Company and 21st Century Fox – have already pursued investments in digital media properties. Fox was a relatively early investor in Vice Media, and like Disney and Comcast subsidiary NBCUniversal which provided a total of $400m for Buzzfeed and Vox Media last August, has latterly been increasing its corporate venturing investments, partially through subsidiary Sky.
Those investments cover digital media platforms but also adjacent sectors like online streaming, adtech and daily fantasy sports companies – 21st Century Fox, NBC Sports Ventures, Disney and Time Warner Investments are all investors in either DraftKings or FanDuel – and they point the way to how the firms plan to operate in future.
Quite simply, the internet can be seen as one more form of media and one more way to secure advertising funds, and so it makes sense for big media groups to gain an interest. We’ve had years of stories about how ‘new’ media will consume ‘old’ media, but increasingly there seems to be no such thing as the latter, as established companies evolve their offerings.
Big media groups will continue to link with digital media companies and fund their expansion through strategic partnerships. The digital media companies might find that growth requires them to switch to content like video which is easier to consume, but as adblockers make advertising money harder to come by, such a move could simply end up being the price of survival anyway.
