MCN Wars - Who's Next In M&A? (Got It Right With CDS)

Last week's acquisition (of a controlling interest) by German media company ProSieben of leading MCN Collective Digital Studio -- one of 5 MCNs I predicted as being "ripe" for acquisition 6 months back -- woke up the MCN M&A game that had been somewhat quiet for the first six months (after a frenetic pace last year).  So, is this deal a "wake up call" for media companies to move on the remaining independent MCNs with scale?

Signs point to "yes."  As I recently wrote in a lengthy analysis of 2015's top digital media deals and trends to date this year, those leading MCNs "are ripe for M&A down the road -- a road that likely just got shorter [last week] because one of their independent brethren (Collective Digital Studio) has just been taken off the table ...."  Other industry insiders agree, including execs from major media companies with whom I have spoken.  And, several followers/influencers within the industry underscore this point even more emphatically.  Sahil Patel of Digiday -- who covers the space very closely -- writes, "If you're a major media company and you're interested in buying a YouTube network, you better hurry up."

And, even more emphatically, research firm Ampere Analysis concludes: "For those players without a stake in the MCN game, sand is rapidly running through the hourglass ... Many media companies are playing a waiting game: the million dollar question now is when to stop waiting and start acting."  Ampere pegs the top 100 MCNs as having a collective value of an eye-popping near-$10 billion (yes, BILLION!) -- and further concludes that 22 MCNs each justify an acquisition price of "at least $100 million" based on previous M&A comps in the space.

I don't know about that (since Ampere's "treat-all-MCNs-the-same" analysis is rather one-dimensional and apparently doesn't consider other relevant valuation factors, including strategic "fit," specific consumer vertical focus, each MCN's focus on and -- amount of -- licensable original programming, and quality of distribution partners, among others).  But, I certainly do believe that MCN M&A will actively continue in the next several months (NOTE: remember, most majors call themselves MPNs now, as in "multi-platform network").  I call this Phase 2 of expected MCN M&A activity -- which ProSieben/Collective Digital Studio (CDS) sparked last week.

HERE ARE MY PREDICTIONS OF WHO COULD BE NEXT (and for those keeping score, in addition to correctly identifying CDS, I had earlier correctly anticipated M&A for Crunchyroll, Fullscreen and StyleHaul):

(1) TASTEMADE -- the leading food and travel MCN (which counts Scripps, Liberty Media, and Comcast as strategic investors, is known and respected for its original programming and brand, and has secured big wins on the distribution side with Apple and Facebook, among others); here is my exclusive interview of CEO Larry Fitzgibbon from last August;

(2) MACHINIMA -- one of the major MCNs that started it all several years back, is gamer/young male-focus, and still has massive scale (and counts Warner Bros. as a strategic investor);

(3) WHISTLE SPORTS -- the leading sports-focused MCN (which counts BSKYB and Liberty Global as strategic investors, has compelling deals with several major sports leagues -- including the NFL -- and features content that "travels well" internationally); here is my exclusive Q&A with CEO John West (note: Whistle is a client of Manatt Digital Media);

(4) MITU NETWORK -- the leading Latino-focused MCN (which counts AMC Networks as a strategic investor);

(5) DANCEON -- the leading dance/music-focused MCN (which features significant original programming that is ripe for upstream licensing to traditional platforms, and which also counts AMC Networks as a strategic investor); here is my exclusive profile about this MCN (note: Manatt Venture Fund is an investor and DanceOn is a client of Manatt Digital Media);

(6) FREDERATOR -- an animation-focused MCN that is somewhat "under the radar" (similar to Collective Digital Studio prior to its acquisition), and which is lead by media industry pioneer Fred Seibert who helped launch MTV and VH-1 and also served as President of animation legend Hanna-Barbera; in other words, his relationships and partnerships with the creative world are legend; and

(7) OMNIA MEDIA -- another digital-first media company that also is very much "under the radar" and is rumored to be in active discussions on the M&A front right now.

And, these are just some of the leading U.S.-based MCNs.  Remember, it's a big world out there -- with several other major MCNs, including German-based Mediakraft.  Many hungry major international media companies exist (cases in point: ProSieben/CDS and RTL Group/StyleHaul).

BONUS PICKS -- JUKIN' MEDIA -- not really an MCN, but also generally in the short-form digital-first space (and with a unique value proposition and multi-faceted business mode -- and also with a strategic media investor -- Bertelsmann Digital Media Investments).  Here is my profile of this very "hot" company about which many are talking.  It wouldn't surprise me if Jukin' were swallowed up first.  I also like WOVEN, which is a bit like a "less angry" Vice -- and is another company that I previously profiled.

What's the common denominator here?  Virtually all of them count major media companies as strategic investors.  And, as we just saw with ProSieben (which previously already held a 20% stake in CDS), strategic investment frequently leads to outright M&A.  Strategics frequently like to "try" before they "buy."  And, in the prescient words of Yoda (a character now owned by Disney and which, in turn, transformed the MCN M&A world and playbook with its near $1 billion purchase of Maker Studios early last year), "buy, they will!"

Let's start counting them down ....

Tastemade - Scenes From the MCN's Exclusive Event

Last night, leading food & travel MCN Tastemade (headquartered just down the street from us here at Manatt Digital Media in Santa Monica, CA) held an exclusive invite-only event announcing its new partnership with Apple TV (a big coup which gives the MCN great visibility and distribution).  As expected, great food.  Great drink.  And video creators all around.  Here are some images of the event.  (Below, in order of appearance top to bottom, (i) deconstructing steak with a blow-torch ... yes, a blow-torch), (ii) the overall scene in the Tastemade studios, and (iii) pouring home-made Old Fashions.

Vessel -- The Subscription-First MCN - Opens Windows, While Netflix Closes Them

Jason Kilar’s long-awaited digital-first video service Vessel finally fully opened its sails last week -- charting a course to become the first mass scale paid subscription-first multi-channel network (MCN) -- charging users $2.99 per month.

While most others in the MCN world seek to take down and own individual market verticals (DanceOn for dance, Tastemade for food, Whistle Sports for sports, Stylehaul for fashion), Vessel has no specific focus -- it is broad-based.  And, while most other MCNs ultimately hope to build paid subscriptions into their business model, unlike Vessel, they focus first on advertising revenues and branded content.  THAT is a fundamental difference.  Interestingly, some other leading MCNs (including DanceOn and Tastemade) apparently already have committed to distribute at least some of their content exclusively on Vessel’s platform for 72 hours (a new 3 day “window”).  Why would they do this?  Several reasons: (1) Vessel will pay them and certain other coveted video creators for such exclusivity; (2) Vessel also will share 60% of relevant subscription revenues on top of that; and (3) Vessel’s subscription focus will accelerate their own paid subscription ambitions.  This is significantly different than what has been reported previously on the issue of 72-hour exclusivity.

Essentially, Vessel’s goal is to turn water into wine with a bit of compelling digital-first video content consolidation alchemy -- transforming here-to-date mostly free digital content into paid content.  In so doing, Vessel is opening a 72 hour paid window in this digital-first short form video YouTube-ian world, while Netflix and others seek to close them for long-form “traditional” motion picture content.

One window closes.  Another one opens.  Will opportunity, in the form of meaningful monetization, flow in?  Or, will there be nothing but air?  Only time will tell, but all digital-first content creators are holding their breath with anticipation for Vessel’s official launch in 2015.

StyleHaul’s $150 Million Valuation -- Good (Very!) for Other Vertically-Focused MCNs

As expected, fashion-focused MCN StyleHaul’s sale to Euro-based media conglomerate RTL Group is confirmed as of this morning.  And, consistent with my prediction a few weeks back, the deal values StyleHaul well north of $100 million -- essentially $150 million in fact.  But, reports indicate that the ultimate “haul” for investors could exceed $200 million via performance incentives.  Very stylish indeed!  (Here is my earlier analysis of why the deal makes sense for RTL).

This bodes well for other major vertically-focused MCNs -- i.e., those focused on a particular niche markets/audiences.  Those include Tastemade (foodie-focused), Mitu Networks (Latino-focused), DanceOn (a client that is dance-focused), Machinima (gamer-focused), and Whistle Sports (a client that is sports-focused and which just announced a major $7 million strategic investment from UK-based media giant BSKYB).  Why?  All target passionate groups under-served by “traditional” media outlets who are hungry for fresh content -- particularly short-form video for mobile engagement.

MCN M&A -- it’s not just about broad-based horizontal MCNs (like Maker Studios and Fullscreen) anymore.  In fact, vertically-focused MCNs cater to self-defined passionate audiences -- and that means deeper engagement and opportunities to monetize (via higher CPMs, more targeted sponsorship dollars, and direct commerce).

Kin Community -- My Interview with CEO Michael Wayne of the “Quiet" MCN for Women

Kin Community -- a leading women’s lifestyle MCN (in fact, they bill themselves as being "the #1 women’s community"), but have you heard of them?

Chances are, “no."  But, doesn’t mean you shouldn’t know them.  It may just mean that this MCN's story is a bit more difficult to tell.  

I recently sat down with founder & CEO Michael Wayne at the company’s beautiful offices in Santa Monica, California -- very near the offices of fellow MCN Tastemade (which I recently profiled).  And, I learned a lot in our time together ... and was impressed by his thoughtful, disciplined and, yes, humble approach to his overall business.

First, here are some facts that may make Kin Community’s pitch more challenging and less easily “hype-able":

(1) Kin is a rarer kind of MCN “animal” -- unlike a purely style/beauty-focused MCN like StyleHaul (which has long-rumored to be in M&A “play” as we speak), Kin Community covers multiple vertical lifestyles for women (food, health & fitness, beauty & style, parenting, home, and entertainment).  This means its overall story is, by definition, less focused and easily “pitch-able”;

(2) it is significantly smaller than mega-MCNs like Maker Studios (acquired by Disney for up to $1 billion) and Fullscreen (acquired by Otter Media for a deal rumored to value the company for up to $300 million).  In fact its scale is about 1/10th that and more Big Frame-like (acquired by AwesomenessTV for $15 million).  Nonetheless, Kin is certainly larger than other leading MCNs who have a bigger spotlight.  Kin now reaches 25 million subscribers (about half of whom subscribe to one channel -- “The Ellen Show”, as in Degeneres), with over 207 million monthly views, and over 4.3 billion lifetime video views.  In other words, its reach is real; 

(3) the company launched in 2007, practically a different generation and vintage from most leading press-proven MCNs.  This genealogy is very important to understand, because let’s not forget the impact (both financial and psychological) of the Great Crash of 2008 on all entrepreneurs who pre-dated that crash.  Unlike post-Crash MCN babies like StyleHaul, Kin had to weather the storm -- which meant that it needed to deploy its cash conservatively, much more conservatively than the speed of deployment of most MCNs today.  In the words of Michael Wayne, “we are recession children” -- and, that fact clearly has made a lasting impression on him and how he runs his company.  As a result, Kin’s steady growth over time may be less “exciting” than younger MCNs who have jumped higher and faster (even if some of those may be doing so with less compelling financial results).  Let’s face it -- the press (and investors) always prefer the young upstart with $0 revenues that can scale to infinity and beyond;

(4) the company’s CEO, Michael Wayne, doesn’t seemingly actively court the press or seek the limelight.  But, he is a proven entrepreneur who really knows his business -- he just may approach it in a more deliberate fashion for the reasons discussed above;

(5) the company caters to a slightly older female demographic -- certainly older than StyleHaul’s.  62% of Kin's viewers are between the ages of 18-52 (by the way, 74% of all viewers are women).  As such, it is not as much of a “millennial” play as most of the others.  After all, youth sells;

(6) Kin, at least for now and unlike most other MCNs, is content to live on top of YouTube’s platform and not chase other distribution platforms.  Kin, unlike others, is also generally content with its ad and branded-content and sponsored business model.  While Kin ultimately may syndicate and “upstream” more of its original content, unlike StyleHaul, don’t expect direct commerce opportunities here anytime soon; and

(7) unlike virtually all other major MCNs that feature hundreds and usually thousands of video creators, this MCN features only 90 or so (the most of important of which is “The Ellen Show”).  Fewer creators, personalities and channels mean fewer personalities to hype the overall story itself.

But, less hype doesn’t translate immediately into being any less impressive.  And, here’s why:

(1) the company has actually attained stand-alone and ongoing profitability (on a long-term basis);

(2) it also just recently closed a significant Series C round of $12 million in financing to further diversify its channel line-up and significantly accelerate its scale, particularly internationally -- not by the blue chip kind of “usual suspect” MCN investors that we have come to expect, but instead by stealth international strategics (led by Canadian media company Corus Entertainment) who can further accelerate the company’s “quiet" global growth; and

(3) the company’s relationships with its brand partners run deep and frequently extend for years.  Take Target.  Target is the reason Michael Wayne and his team targeted the more mature women’s market in 2007 in the first place.  And, Target remains its biggest sponsor today.

Kin Community.  Certainly not the hare.  But, not necessarily the tortoise either.  

Perhaps just a company in the MCN space that has already demonstrated a real, long-term stand-alone business model.

Kind of quaint.  Definitely a bit quiet.  But now ready to amplify its voice.

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

MCNs - They Matter (Because They Represent Media’s Fundamental Digital Transformation & the Accelerating Millennial Movement)

[NOTE -- this article was published yesterday as a guest article in VideoInk.  Different title, essentially the same content.]

I write a lot about the multi-channel network (MCN) digital video world.  And, I follow it closely.  Why?  Is it because I think MCNs are the only relevant players in the new world video eco-system?

Of course not!

Rather, I follow them so closely because the rise of MCNs -- and the massive M&A and investments in those companies -- are key data points for the overall digital “movement.”  Of the fundamental transformation of Hollywood.  And, of the fundamental transformation of the overall media business.  MCNs represent the new multi-platform media world that we had anticipated for years, but finally came into its own in a mainstream way just this past year.

It is here.  It is now.  Consumers “get" that.  Especially millennials.

But do the major “traditional” media companies?  Do the big brands?  Do you?

Certainly not to a significant degree -- and that is at their and your peril (if you fall into that camp).  I recently wrote about this after attending my first VidCon.

Core to this transformation is the mobile device -- a device that is with most of us (even non-millennials) virtually 24/7.  Now high quality video is available to consumers virtually any time, anywhere.  And, we are voraciously eating it up (to the pleasure of the carriers and their data plans).  The bottom line is that different platforms are optimized for different forms of content.  And, the vast majority of video consumption on the small screen is of “bite-sized” short form video.  That means that premium content development for that small screen is fundamentally different than it is for traditional longer-form video platforms like TV.  That requires specialized expertise.  Expertise that most traditional media companies don’t have.

That’s where MCNs fit in.  They don’t supplant traditional platforms.  Rather, they EXPAND them.  They enable consumers to consume the full spectrum of entertaining, informative, and impactful video content.  The mobile platform -- that small screen -- is finally ready for prime time.  Scratch that.  It isn’t just ready -- it is here -- it is now.

What else?

Our multi-platform media world -- in which consumers demand these new forms of premium content (after all, they are “voting” by their sheer numbers) -- also demands “personalities” who can speak most effectively to the massive young audience that has shifted much of its content consumption downstream to that mobile device.  And, that personality isn’t the mainstream celebrity.  Rather, because these “bite-sized” videos ideal for mobile viewing are typically produced on very low (or, more usually, non-existent) budgets, they are grass-roots-driven (at least initially).  They began with people like you and me (well, not me, I am not in that demo).  And, some of these grass-roots videos and personalities take hold -- for some reason -- and rise to the top.  Somehow some of them rise above the din.  It is THESE YouTube personalities who are the new “celebrities” for millennials.

A recently published study confirms that reality.  YouTube celebrities are now more popular than mainstream celebrities to U.S. teens.  Think about that!  Brands -- you better.  If you want to reach this key burgeoning demographic, then you must -- RIGHT NOW! -- shift significant marketing funds to the YouTube economy.  To MCNs.  To YouTube “celebrities."  To Viners.  Play time is over.  It’s time to go “in” big.  And, with these digital platforms, you have the added benefit of being able to reach and pinpoint the precise “right” audience for your messages.  Then it is up to you to engage with them, effectively.

And, that takes “authenticity” -- a word that is foundational to this new world order.  YouTube personalities rise -- MCNs rise -- and brands effectively rise -- only with authentic voices.

Take some of the leading MCNs.

I recently profiled #1 dance-focused MCN DanceOn and its founder/CEO Amanda Taylor.  Why did she start DanceOn in the first place?  Fundamentally, because of her love of dance!  Because she already was helping professional dancers expand their opportunities because she was aware of their challenges.  She felt their pain.

I also recently profiled Larry Fitzgibbon, founder/CEO of #1 food-focused MCN Tastemade.  Why did he start Tastemade after his successful IPO of Demand Media (which he also founded)?  I’m sure he had already made some significant cash -- so it certainly wasn’t all about the dollars.  Rather, when I met with Larry, he started our conversation talking about his love of food.  Of the beauty and creativity of food and cooking as an art form.  And, of the international bridging of cultures that food makes possible.  That is authentic!  (And very very cool).

That same authenticity is pervasive by essentially all founders and CEOs in the MCN world, several of whom I have come to know well (and some of with whom I have the good fortune of closely working).  Founder/CEO John West of #1 sports-focused MCN The Whistle?  Absolutely -- love of sports -- believed that millennials deserved their own voice of sports.  Not their father’s ESPN.  Roy Burstin, founder/CEO of Mitu Networks, the #1 Latino-focused MCN.  Same story.  Roy -- from Colombia -- “felt” the dearth of compelling video content for the Latino market (which he tells me has higher mobile consumption rates than other cultures).  Stepahine Horbaczewski, founder/CEO of #1 fashion-focused MCN StyleHaul?  Again, the same.  You can feel it by the faux furs she wears around her neck at events, even in the summer!  And then there’s Allen DeBevoise, Chairman of #1 gamer-focused MCN Machinima and the godfather of the MCN world in general.  Allen is such an authentic believer in this new world order that he personally has invested in virtually all of these (and more).

THAT’s why MCNs matter.  That’s why I follow them and the entire multi-platform media/video world so closely.

And, that’s why I am excited about the massive opportunities in (and privileged to be in) the media world that is now transforming in fundamental ways right before our eyes.

Let’s be clear.  It’s not “out" with the old.  But, it is absolutely about “in” with the new ....

DanceOn - EXCLUSIVE Insights from CEO Amanda Taylor of Dance’s #1 MCN

As you know, I follow the multi-platform media/MCN space very closely.  Last week, I featured an interview and studio tour of leading foodie-focused MCN Tastemade.  Today’s featured CEO is Amanda Taylor, founder & CEO of leading dance-focused MCN DanceOn (with 11 million subs, 70 million monthly video views, over 2 billion total views, and 8.3 million fans across Facebook and Twitter).  DanceOn’s all-star list of founders and investors include Madonna, Nygel Lythgoe (creator of “So You Think You Can Dance” and “American Idol”), and Allen DeBevoise (founding father/godfather of the MCN world).  Manatt Digital Media is also an investor, as am I individually.  We are believers.

Last week, Amanda and head of sales Mike Praw joined me and others from the Manatt Digital Media team for an informal brown bag lunch to hear more insights -- more about who they are, where they are, where they plan to go.  These are some of those insights from our special session:

(1) DanceOn’s Focus -

-- Amanda underscored that DanceOn focuses on “dance videos," not “music” videos; music videos feature music artists

(2) DanceOn’s Core Demo & Overall Market Opportunity -

-- 63% of viewers are female, 50% are “multicultural,” and 61% are in the coveted 13-34 age bracket

-- the market opportunity is “massive” in Amanda's words -- why?

-- 3.5 million children (K-12) in the U.S. take formal dance education from dance specialists (out of a total K-12 population of 50 million)

-- additionally, 43% of U.S. kids K-12 have taken dance class taught in their schools 

-- dance “travels” well internationally, since there is no language barrier
-- no other single multi-platform dance-focused media company exists, and “bite-sized” dance video works well for the smart phone/tablet world

(3) DanceOn’s Business Model -

-- advertising-focused video on demand (AVOD) -- a primary component

-- sponsorships, including branded integration/content -- a primary component -- and the company has had major traction already with several of the biggest brands (examples include Coke, Unilever)

-- syndication opportunities to other platforms (including television) -- but Amanda stressed that these are only interesting where the DanceOn brand is featured and preserved

-- interestingly, unlike some other leading vertically-focused MCNs like StyleHaul and Tastemade, commerce is not a key element of DanceOn’s business model; the company is NOT a commerce play; DanceOn’s core/essence is pure entertainment

-- the company is now dipping its toes into the live event space and has its first major event at the LA Convention Center this Friday, August 29

(4) DanceOn's Pitch to Professional Dancers/Creators

-- Amanda tells me that, at most, professional dancers can earn $120K/year in the “traditional” model and with traditional platforms; but digital platforms open a new world of monetization opportunities; and, even more, now professional dancers can build their individual brands and monetize in myriad ways that go well beyond dance (which already is happening with some dancers on the DanceOn roster)

-- a key part of DanceOn’s pitch to professional dancers is to directly address their relatively short professional “shelf life” -- i.e., DanceOn helps dancers maximize opportunities now in a Carpe Diem kind-of-way

-- and, because professional dancers can build their individual brands, they can also extend those brands into different areas beyond dance as they mature 

(5) DanceOn’s Biz Terms with Talent

-- DanceOn has exclusive digital relationships with its talent roster, but Amanda tells me the company is not an agency

-- the company's talent can utilize the DanceOn platform as a springboard to showcase their talent, build their brand, and move well beyond digital (and into all other platforms, including traditional media) on their own

(6) Future Plans -- Where They Are Going

-- DanceOn's video content is almost exclusively non-scripted now; but the company already develops significant original programming, a natural extension of which ultimately is to move beyond its current focus

Definitely an MCN to watch.  And, an MCN that was founded with the same fundamental principles shared by Larry Fitzgibbon of Tastemade (as well as essentially all other major MCN CEO/Founders whom I have come to know) -- authenticity and passion.

Refreshing!

Tastemade - My Interview & Studio Tour with CEO Larry Fitzgibbon of the Leading Food MCN

Tastemade is a leading MCN -- and is THE leading MCN focused on food, nothing but food.  The company’s mission is to be “Connecting the World Through Food.”  And investors have bitten -- to the tune of $25 million in their latest round led -- predictably (and smartly) -- by Scripps Networks Interactive (owner of, of course, the Food Network).  Mega-media companies Comcast (via Comcast Ventures) and Liberty Media also are investors in the company’s latest round (which is on top of $15 million previously invested).

Yesterday I drove down the street to Tastemade’s Santa Monica, California headquarters and studios and met with CEO Larry Fitzgibbon (the picture to the right is the unassuming exterior of Tastemade studios, which previously housed MTV).  Larry and I had previously crossed paths a couple of times -- while I at SightSpeed and he at CitySeach; and while I at Sorenson Media and he at Demand Media.  Demand Media is where Larry honed his chops for short-form video content.  After Demand Media’s IPO in 2011, Larry and his other co-founders used their recipe of best practices and mixed in key ingredients of experience, learnings (e.g., focus on a passionate target audience/vertical market and build a brand), expertise, and passion for food to bake Tastemade.  And, here we are.  (The picture below and to the left is one of several fully functioning production kitchens in the studio, this one being more urban and hipster-focused; while the picture further below and to the right is the kitchen typically used more for live audience demonstrations).

Larry shrugs off the label “MCN,” choosing instead to call Tastemade a “Modern” media company.  I mentioned to him that it was intriguing for him to use that word (“modern”), because that is a rarely used word in this day and age.  His response to that was equally intriguing -- i.e., “we are not a next-gen media company, because the audience has already migrated to digital platforms.”  Amen to that!  And, Tastemade’s content is developed natively for those digital platforms unlike content produced for the Food Network or other traditional platforms like television (that is then frequently ... and frequently clumsily simply carted ... over to digital channels).  Different strokes (content) for different folks (platforms).

And, here’s the interesting thing about Tastemade as opposed to many other major “MCNs” (yes, I am generalizing for ease of reference).  Most major MCNs have thousands of channels.  Not Tastemade.  Tastemade counts about 300.  And every single one of them -- every one -- is identified by pin, string, and individual profile on a massive world map on one main wall inside the company’s offices.  Yes, old world recognition by a new world “modern” media company for the old world art of cooking and food.

Here’s another one.  Tastemade’s app (which is really cool, by the way, you should try it out) enables anyone -- you, me -- to be a “foodie” and instantaneously and drop-dead easily make a beautiful professional video at our favorite restaurant while we order our food and enjoy our meal.  Everything is automated (editing, etc.) -- and you can also select music tracks to accompany your “rave” (not reviews, because reviews can be negative) of your food experience so that others can enjoy.  But here’s the punchline.  Every single prolific Tastemade raver has his/her picture and profile on that same Tastemade office wall in an old-world format (via post-its this time), so that the Tastemade team sees their audience, their users, all day, every day.  It is a great authentic reminder of what it is all about -- to connect the world with food! Bravo to Larry and his team for those nice human touches.

Tastemade now gets 18 million unique visitors per month and its core audience is, not surprisingly, 18-34 and about 60% female, with over 50% residing outside of the U.S.  This truly is an international play, because food travels well (at least digitally).  The company’s business model is, as expected, primarily ad-driven (including significant branded content and sponsorship opportunities).  But, the company -- like all other MCNs (and virtually every media company, period!) -- is also experimenting with paid content (via subscriptions and/or micro-payments for access) and ultimately with relevant commerce opportunities.

It’s only a matter of time until some big fish devours them ...

(The picture to the upper left is another interior shot of the studios, while the picture to the lower left is the bar used for viewers to learn about libations and where the Tastemade team will celebrate their inevitable liquidity event.)

MCN 101 - A “Cheat Sheet” for Key Multi-Platform Video M&A, Strategic & VC Investments, Partnerships

The overall multi-platform video/media and multi-channel network (MCN) space continues to be white hot, with accelerating M&A, strategic and venture capital investments, and an ever-growing list of significant strategic partnerships.  Tough to keep up with it all, but my team and I at Manatt Digital Media follow the space very closely.  To help, here is a scorecard/“cheat sheet" of key representative (1) M&A, (2) strategic investments, (3) VC investments, and (4) strategic partnerships -- all in reverse chronological order (most recent first, so that you can get a sense of the accelerating pace, even during the purportedly slow-moving dog days of summer):

I.  MCN M&A

StyleHaul (the leading fashion-focused MCN) heavily rumored to be up for sale right now – potential buyers said to include Hearst, Conde Nast, Amazon and 21st Century Fox

Rightster (London-based digital video distribution company) acquired European-based Base79 in early August 2014 for up to $85 million

Legendary Entertainment acquired Geek & Sundry (geek culture) in late July 2014 for an undisclosed sum

Otter Media widely rumored in late July 2014 to be mulling over taking a majority stake in leading MCN FullScreen for a sum reported to be between $200-$300 million (no updates since initial reports)

Otter Media (the $500 million joint venture of The Chernin Group and AT&T) acquired Creativebug (DIY videos) from Demand Media for $10 million mid-July 2014

Relativity Media was widely rumored to have bid for leading horizontally-focused Fullscreen for an amount reported to be between $500 million to $1 billion in early May 2014 (since that time, Otter Media is rumored to be the leading contender -- as discussed above)

DreamWorks/AwesomenessTV acquired boutique MCN and YouTube talent agency Big Frame for  $15 million in early April 2014

Disney acquired Maker Studios in the mid-March 2014 mega $500-$950 million deal that fueled and accelerated all of this year’s MCN activity

DreamWorks acquired AwesomenessTV for $100 million+ in the first major MCN deal in early May 2013

Consider all other major vertically-focused MCNs to be in “play” at this point, given all of the M&A activity (here are my predictions about likely M&A targets from a few months back).  

II.  MCN Strategic Investment

As opposed to M&A, this category represents major media companies who have taken significant equity stakes in (but not outright acquisition of) leading MCNs:

Scripps and Liberty Media invested $25 million in leading foodie-focused MCN Tastemade in late June 2014

AT&T and The Chernin Group committed $500 million in April 2014 to fund the new Otter Media joint venture to acquire, invest in and launch OTT services (including leading anime-focused MCN Crunchyroll

Warner Bros invested $18 million in leading and pioneering young male and gamer-focused MCN Machinima in early March 2014 (just before Disney’s acquisition of Maker Studios)

German media powerhouse ProSieben acquired a 20% stake in Collective Digital Studios for an undisclosed 8 figure sum in March 2014

AMC Networks invested $4 million in leading dance-focused MCN DanceOn in October 2013 (NOTE -- Manatt Digital Media is an investor in DanceOn)

III.  MCN Venture Capital Investment

As opposed to the strategic corporate investments discussed above, here are key multi-platform video/MCN-related venture capital investments:

Blue-chip Silicon Valley based VC Andreessen Horowitz invested $50 million to fund premium video development in BuzzFeed in early August 2014

Russel Simmon’s urban culture-focused All DefDigital raised $5 million from Greycroft, AdvancitCapital, E.ventures, and Nu Horizons in early August 2014

German-based MCN Mediakraft Networks raised $23 million from Iris Capital, Capnamic Ventures, Shortcut Ventures in early July 2014

Leading Latino-focused MiTu Networks raised $10 million from Upfront Ventures and existing investors mid-June 2014

Leading sports-focused MCN The Whistle raised $10 million ($18 million to date) from SeventySix Capital and “name brand” long-time media execs Bob DuPuy, Garry Laybourne, Bob Pittman in mid-May 2014

Tastemade earlier raised $10 million from Raine Venture Partners, Redpoint Ventures, Comcast Ventures in August 2013

Fullscreen previously raised an undisclosed 8-figure sum from The Chernin Group, Comcast Ventures, and WPP in June 2013

StyleHaul previously raised $17 million from Bertelsmann Digital Media Investments, RTL Group, RezVenPartners 

IV.  MCN Strategic Partnerships

As opposed to outright M&A or investment, MCN growth also is fueled by strategic partnerships.  Here are a representative few:

The Whistle just announced a major new distribution partnership with Xbox which included a major branded content component with Suburu (August 2014)

Mitu Networks just announced a major new content development and multi-platform distribution partnership with Spanish language media giant Televisa (August 2014)

FC Barcelona will use Dailymotion’s video player on their site and Dailymotion will launch FC Barcelona channel, dedicated to soccer (announced early August 2014)

Fox Sports Digital is partnering with Sporting News Media to share and swap libraries of editorial and video content (announced late July 2014)

Conde Naste launches pioneering brand-focused The Scene with content partners including AOL, ABC News, Forbes, BuzzFeed, Vox Media (announced mid-July 2014)

The Whistle announces continuous string of mega-content co-creation, co-distribution and co-promotion deals with the NFL, MLB, NASCAR, PGA Tour, AVP Beach Volleyball, Harlem Globetrotters (ongoing throughout 2014)

Maybelline announced a deal with StyleHaul in June 2014 for branded content in its YouTube channels (with StyleHaul videos also appearing in Maybelline’s content hub and on TV)

Leading media company Lionsgate and Freddie Wong’s RocketJump Studios agree to a multi-year film, TV and digital content alliance (announced April 2014)

Mediakraft and British Pathe announce a major content deal in April 2014 to bring 85,000 videos to YouTube from their historical film archives of to YouTube – 4/14

NOTE -- these certainly are key strategic MCN/multi-platform video “moves” -- but certainly not all of them.  

And, the action is still in its early innings ...

Leading video “pub” VideoInk also published this article, under a different name.