Publishers take a plunge into streaming

Digital publishers are creating content for the streaming content boom in order to create new revenue streams as advertising opportunities dry up.

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Publishers take a plunge into streaming

The Future. Digital publishers are creating content for the streaming content boom in order to create new revenue streams as advertising opportunities dry up. If they start to find consistent success by mining their own IP, the next wave of entertainment M&As may be partnerships between Hollywood studios and digital publishers.

Feed the beasts

Are digital publishers ditching words for images?

  • Vox Media has sold 50 projects to streamers such as Netflix and Amazon and networks like HBO and CNN in the past 15 months.
  • Vox’s studio division is expected to account for a third of the company’s revenue this year — about $300 million.
  • Vice, which has shows on ESPN and Netflix, expects its studio division to bring in about $750 million in revenue in 2022.
  • Vice is trying to use this new revenue stream to boost its valuation before a planned IPO… which has run into some issues.
  • BuzzFeed, which has a film deal with Lionsgate and a TV deal with Universal, is ramping up its content output after a few years of false starts.
  • BuzzFeed plans on releasing six films over the next year, including 1UP starring Ruby Rose. It also has 15 projects in production, and 50 in development.

Hard money

Money may be pouring into streaming, but that doesn’t mean it’ll be easier to make money.

  • Making high quality films and shows takes much longer and requires far more investment than what publishers are used to creating.
  • It also comes with a lower profit margin. While a digital ad can bring 75% profit on investment, projects for streaming services bring in around 10-20% because streamers pay larger upfront fees to buy up profit participation from producers.

Some publishers like Group Nine Media (holding company of brands like The Dodo and Thrillist) maintain ownership as long as possible by making projects themselves in order to enjoy a higher upside — as with its Oscar-winning short film, Two Distant Strangers. It eventually sold that film to Netflix in a bidding war.

Group Nine Studios president Mickey Meyer said, “the ambition has never been just grabbing executive producer credit and walking away,” Meyer said. “We want to be globally renowned for our IP; we’re still in the early stages.”

David Vendrell

Born and raised a stone’s-throw away from the Everglades, David left the Florida swamp for the California desert. Over-caffeinated, he stares at his computer too long either writing the TFP newsletter or screenplays. He is repped by Anonymous Content.


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