Media companies looking to expand outside of advertising, and especially into commerce, are increasingly following the same path down the grocery aisle.
Why it matters: Food and beverage caters to nearly every demographic. When launching forays into commerce, media companies are finding this an easy place to start.
Driving the news: Discovery Inc. launched a Food Network Kitchen App in conjunction with Amazon last week that will offer users live cooking classes, as well as the ability to buy food and kitchenware directly from the app.
- CEO David Zaslav said at the Vanity Fair News Establishment conference: "This platform is ubiquitous to everyone and we get all of the data and we get all of the credit cards."
Other notable examples:
- Buzzfeed CEO Jonah Peretti told Axios that last year the company made over $100 million from revenue streams like selling cookware from its food brand Tasty at Walmart.
- Dotdash, a media company that's owned by Barry Diller's IAC, bought liquor.com earlier this year and said it would use that brand to further launch its commerce business.
- The Chernin Group has poured over $130 million into media companies like Food52 and MeatEater to help them launch commerce businesses around food products, like whiskey, cookbooks and cutting boards.
Be smart: Food has also proven to be a growing vertical for advertisers, subscriptions, events and licensing.
- The three consumer packaged goods (CPG) food categories — Food, Alcoholic Beverage and Non-Alcoholic Beverage — made up 11% of the 2018 ad market, per data from Standard Media Index.
- While the national TV ad market has dropped 1% over a five-year CAGR (excluding the Olympics), Food Network's advertising has grown 5.9%.
Even news outlets, or companies which own news operations, have launched events, licensing businesses and subscription businesses around food.
- The New York Times Cooking App surpassed 250,000 subscriptions in Q2 2019, tripling the number of subscriptions in just one year.
- New York Media's food vertical Grub Street teamed up with "Just Salad" shops to sell salads in New York City.
- Vox Media's largest TV licensing deal to date has been a multi-year, multi-series development and production deal that's a collaboration between celebrity chefs and Vox Media's Eater brand.
- The Infatuation sold 17,000 tickets to its annual EEEEATSCON weekend-long food festivals in LA and NYC this year.
The bottom line: Food sells.