Yesterday, the New York Post reported that Verizon, just 5 years after spending $4.4 billion on AOL/Yahoo, is looking to sell HuffPost, which AOL bought for $315 million.
And apparently it’s not getting any bites.
Verizon has pitched the property to prospective buyers including Thrillist-owner Group Nine Media, Rolling Stone publisher Penske Media Corp., Bustle Digital Media and J2 Global, insiders said. Those media outlets declined to comment.
Vox Media, which owns New York Magazine and operates news and political site Vox as well as tech news sites Recode and The Verge, is among the media outlets to have held talks to acquire HuffPost. Some sources have described those talks as “serious,” but sources close to Vox, while acknowledging they have taken a look, say they are not interested in buying the property.
Telecoms have been getting into content for a long time, and I always find it interesting we don’t talk enough about how the companies that provide us the distribution of our content are also increasingly becoming the ones that are creating it.
But as United States v Paramount (1948), the landmark ruling that broke the Hollywood model of studios controlling production, distribution and exhibition of films, went under review from the Department of Justice and then dismantled by decree from a federal judge in a 17-page ruling, the industry needs to brace itself for even more consolidation and even more control from the streaming networks.
One of my favorite newsletter writers, Ernie Smith, dove into the relationship between film studios and movie theaters.
The coronavirus has forced us to reexamine many aspects of our advanced society. And entertainment is one of them. Sports, for example, is a barometer of the health of a society; a high-functioning civilization that has the luxury of time and wealth and health can afford to play sports.
Films, too. The film industry has been crippled; last week, for instance, the top box office film, Tenet, brought in $3.4 million. In total, the highly anticipated Christopher Nolan $205 million film has only grossed $41.2 million in the U.S. since it hit theaters on Sept. 6 (its opening weekend saw $20 million, which was the highest grossing film since the pandemic began).
So when a pandemic forces us inside our homes, we turned to Netflix and Disney+ et al for our entertainment. And regulations for distribution that once reined in anti-competitive behavior now threaten to give more power to the streaming networks; many of which are also owned by the very companies that provide us with our internet.
Entertainment Weekly wrote in August:
As streaming platforms rise and are increasingly attached to studios in the case of platforms like Disney+, Warner Media’s HBO Max, and NBC Universal’s Peacock, they exercise a content monopoly in miniature. You pay a monthly fee for a personal block booking — to access Hamilton, you also agree to pay for The Little Mermaid II.
Jacobin, naturally, writes with a slightly more socialist point of view:
As streaming consolidates, in a repetition of a long history, the companies that control the platforms will have more power over what gets made and what terms get handed out to everyone else. It will take no less than federal action to once again ensure the public good is being served.
Both the implementation of the Paramount Decrees in the 1940s and the financial syndication rules in the 1970s led to a boom in independent production in film and television, as the power of studios and broadcasters was finally reined in. Arthouse and foreign film theaters flourished in this new environment. A rising generation of young American filmmakers like Martin Scorsese, David Lynch, and Francis Ford Coppola got to see movies by Ingmar Bergman, Akira Kurosawa, Roberto Rossellini, and Jean-Luc Godard for the very first time.
With telecoms getting deeper into the content waters the last few years, tracking their movements should be more frequent as they control the pipes, the content creation, and perhaps the shiniest coin in the realm: data.
In July 2018, during AT&T’s earnings:
AT&T laid out a four-pronged strategy for its newly consolidated media business: Time Warner’s roster of entertainment brands will produce the premium content, and AT&T’s high-speed networks will offer the distribution and collect consumer data that will, in turn, inform its “best-in-class” ad-tech platforms like AppNexus.
AT&T CEO Randall Stephenson claims this whole system represents the fruition of a plan the company hatched more than two years ago.
“It was early in 2016 where we were asking ourselves, if you believe that’s going to happen, if you believe that your networks are going to be able to distribute seamlessly premium content, if you believe that your information and your distribution business is really valuable and can drive different advertising models, then you probably ought to move fast and own media,” Stephenson said.
Indeed, in Sept 2018, Adweek reported (Disclosure: I assigned and edited this piece) the different tracks AT&T and Verizon were on:
With a new technical-minded CEO at the helm (the company’s former chief technology officer, Hans Vestberg), Verizon wants nothing to do with owning more content shops. It now plans to remain in a position where it can partner with as many different content providers as possible, and sees managing another big media company as a potential albatross in that pursuit. It still adamantly stands by Oath, but the division’s content production is focused on just four core verticals: sports, finance, entertainment and news.
And of course, the streaming services have exploded in the last two years as even more telecom companies add their IP to the mix.
This brings me back to Verizon looking to siphon off HuffPost.
Clearly, HuffPost isn't generating the revenue that Verizon expected it to, otherwise we wouldn’t be having this conversation. The outlet still hasn’t replaced its editor, who stepped down at the beginning of the year to run content for Gimlet Media, a podcasting company bought by Spotify for a couple hundred million dollars. Media buyers I’ve spoken with over the years have never put HuffPo as a must-buy, even as the site was used as a testing ground for AOL ad units.
And Verizon hasn’t proven to be a steward of content. Or as the FT called it: “a $9 billion mistake.”
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The Buggles, “Video Killed the Radio Star”
Some interesting links:
For the debate shitshow:
Call off the next two debates (Press Run)
BET founder Robert Johnson says ‘I will take the devil I know,’ adding he doesn’t know what Biden will do (CNBC)
For critical analysis of political ads:
“Trump is so saturated”: Anti-Trump attack ads might actually be helping him, Democratic group finds (Vanity Fair)
For conspiracy theories:
QAnon, Blood Libel, and the Satanic Panic (TNR)
For curious media reporting:
Digital News Startup Axios Weathers Covid With Sponsored Newsletters (WSJ)
For media criticism:
Telecoms are stuck in business models in which they make money by enabling the actions of others. They are informational and entertainment rentiers. Not quite the same as banks, because they do build out their own networks to make communications possible, but they have a different view of the world. "Invest the money necessary to create and promote content? What, aren't these currency printing presses?" It would take a lot for them to develop the patience and right mind set to build their own audiences.