StyleHauls It In from Euro-Based RTL Group -- Here’s Why

The MCN world rests for no one.  While the LA-based digital media world was readying itself for the weekend this past Friday (and I served as Best Man at a mega-wedding for my best friend of 45 years, Chad Hummel -- with whom I work at Manatt), Luxembourg-based RTL Group reportedly swooped in to buy leading fashion and beauty-focused MCN StyleHaul (I just recently exclusively profiled StyleHaul and its charismatic CEO Stephanie Horbaczewski here on my blog).  Terms undisclosed (although I am confident that the final price-tag is well north of $100 million).

No surprises here, apart from the unusual timing of the breaking news.  RTL already owned a minority stake in StyleHaul, previously investing $6 million.  And, Stephanie’s company has long been thought to be in M&A “play” (although US-based media companies were rumored to be the leading candidates in those reports).  In fact, just last week I moderated a panel at the Variety Summit in LA focused on the fast-breaking digital world -- and predicted on the record that StyleHaul would be the next leading MCN to be gobbled up (just in time for the Thanksgiving season -- ladies and gentlemen, how about THAT at 5 am!) (I repeated this prediction on Friday in an interview with the Los Angeles Business Journal that was just published this morning).  In the past few months alone, Disney buys Maker Studios.  Next, AwesomenessTV buys Big Frame.  Then, Otter Media buys Fullscreen.  And, now this.

Why StyleHaul specifically and MCNs in general?

(1) RTL already knows the company and its management team, since it already had been a major investor and board member;

(2) The fashion and beauty vertical market travels well -- style truly is international and speaks no language and this MCN’s 199 million network subscribers are truly global, which is perfect for an international company like RTL Group;

(3) Fashion and beauty products sell!  And, that makes StyleHaul’s business model somewhat unique amongst MCNs, enabling commerce to be a potential significant (and perhaps dominant) video-fueled revenue stream for the company (in addition to more typical ad revenues and sponsored/branded content opportunities); and remember, StyleHaul need not split any of commerce revenues with YouTube;

(4) StyleHaul is one of the largest and fastest-growing vertically-focused MCNs with over 17 billion network video views and 4,900 network channels; that’s a lot of content;

(5) MCNs in general have sprung up as a result of two primary realities: (1) our video world is increasingly (dominantly?) mobile -- and that means consumers are increasingly thirsty for the kind of short-form video content that is the MCN world’s specialty; and (2) those mobile-thirsty consumers are heavily the advertiser-coveted millennials who frequently forego traditional video programming in favor of the YouTube economy and non-traditional YouTube video “celebrities”; I have written about this reality over and over again.

Congratulations to Stephanie and her team.

And, we ain’t finished yet.  More vertically-focused MCNs will be swallowed up in the near-term.  Here are my previous predictions (which ain’t bad so far -- 2 of the 7 are now gone; so check out the 5 remaining).