Digital media survival guide
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The influx of venture capital and private investments into digital media companies has helped launch a new generation of outlets. It's also led to a succession of quick exits by those investors — some with strong returns, others not so much.
Why it matters: Media companies with a clear/niche focus are more likely to find strategic partners and generate a strong exit multiple for investors, as opposed to outlets that focus on scale and generalist content.
- Cox Enterprises' acquisition of Axios on Monday for $525 million was in part driven by Axios' clear focus on building a niche audience and its local news build-out.
- Informa's acquisition of Industry Dive last month is meant to support its focus on matching its B2B events business with B2B content.
- The New York Times' $550 million purchase of The Athletic, a subscription sports publication, was a perfect fit for its growing subscription bundle.
The bottom line: The publishing landscape has changed dramatically in the past few years, and no longer favors outlets looking to scale on social media. It favors companies that develop direct relationships with their audiences — as exit multiples reveal.
