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).

MCN CEO Profiles -- Your Michelin Guide to Who’s Hot

All in one place -- consolidated for your consumption -- easily digestible.  Here are my recent detailed interviews and individual profiles of leading MCNs and their CEOs (ok, in one case, President & COO).  All of these MCNs (identified in alphabetical order) are important.  And, all of these execs -- each of whom I have come to know -- are passionate about (and authentically into) their individual missions.

I am a believer in each of them ... and you may find their insights to be enlightening ....

DanceOn and CEO Amanda Taylor

StyleHaul and CEO Stephanie Horbaczewski 

Tastemade and CEO Larry Fitzgibbon

Whistle Sports and CEO John West

Here’s my bonus “under the radar” pick -- which is not quite an MCN, but is in the same world --

Jukin’ Media and President Lee Essner

5 Questions with StyleHaul’s CEO Stephanie Horbaczewski -- EXCLUSIVE Q&A with THE Leading Fashion-Focused MCN (& Rumored M&A Target)

StyleHaul -- one of the leading and “buzz-worthiest” multi-channel networks (MCNs) around.  Vertically focused on all things fashion & beauty.  Catering almost exclusively to a young female demographic.  On the tongues of many in the media and brand business at the highest levels right now, because rumors abound that the company is in M&A “play” right now (interested potential buyers have been reported to include Hearst, Conde Nast, Amazon, and 21st Century Fox).  And, I absolutely believe this is a proverbial “where there is smoke, there is fire” situation. 

I have tracked StyleHaul for a long time now (just like I track all of the leading MCNs, including Whistle Sports which I just featured this past Thursday).  I make it a point to try to meet the CEOs behind all leading MCNs to truly understand the personalities and motivations upon which those “new media” companies are founded.  And, I have found that literally all share two key attributes -- passion and authenticity.  It is not just about the money.  It is about transforming the media industry within their own particular niche of interest.  

In that context, I have come to know StyleHaul's dynamic founder & CEO Stephanie Horbaczewski, one of the few people I know who has perhaps an even more difficult name to spell and pronounce than mine.  Stephanie is a force -- as is the company, which now counts 15+ billion network video views, 175+ million network subscribers, and 4,500+ network channels.  And, StyleHaul has a compelling multi-pronged business model comprised of, yes, ads and branded content -- but also obvious significant (uniquely powerful?) direct commerce opportunities, as well as the potential for “upsell” content.  For StyleHaul, its network of video creators, and its deeply engaged audience, the fashion itself IS the “thing.”  And fashion sells!  This is not lost on marketers and brands, of course, so the monetization opps all around are intriguing.

I am a believer.  The company will not stay independent for long.  That is virtually certain in my view (and something that I have long predicted -- well before the current rumors).

So, on with my 5 Questions -- and Stephanie’s unedited answers.

(1) What is the reason your company exists (and what problem(s) are you looking to solve)?

Social networks like YouTube and Instagram have created a new way for people, especially millennials, to communicate.  That conversation excluded brands until companies like StyleHaul created new scalable products and content that connected brands with influencers in huge multi-platform marketing campaigns.  StyleHaul is solving for the need to extend your brand message from print, TV and digital advertising opportunities to social conversation at scale.

(2) How are you different from your competitors?

The great thing about this ecosystem is that by having a number of companies with differing perspectives about the opportunities, the contributions have been vast and varied but all provide value.  We are incredibly focused and dominate fashion and beauty to the extent that we really have no direct competitors for the work we are doing.   We are the only global, multi-platform, fashion and beauty network that commands the highest levels of engagement available and can do it at this scale.

(3) Why will you succeed (and what is your single most important ingredient for success)?

StyleHaul has had a deep commitment to the importance of our influencers and our brand from day one.  StyleHaul focuses on keeping the network about quality over quantity to ensure we have the most successful campaigns and the lowest attrition and we also pride ourselves on working very closely with our industry partners like Google, YouTube, Fremantle, Gleam and Addition to deliver the strongest offering available.

(4) What makes you unique (and what do you enjoy most outside of building your business)?

My passion for this space has made me obsessive and as a result I iterate on the opportunity every day, allowing StyleHaul to continue to be a leader in the development of the ecosystem. There don’t seem to be many hours left in the day outside of my work as an entrepreneur, but StyleHaul came from combining my passions and I still love all things fashion, beauty and style.

(5) What digital media trend is most interesting to you (and what is the least)?

Most interesting: engagement. Least interesting: scale without context or appropriate application.