Vox Media said on Wednesday that it was spinning off NowThis, a news site whose videos regularly go viral on Instagram and TikTok, as an independent media company ahead of the 2024 presidential election.
The deal, just more than a year after Vox Media acquired NowThis, is backed by Accelerate Change, a nonprofit dedicated to increasing civic engagement among underrepresented groups. The terms of the deal were not disclosed, but one person familiar with the transaction, who was not authorized to release financial details, said Accelerate Change would make a cash payment to Vox Media in addition to contributing capital to NowThis.
The spinoff allows Vox Media to reap financial benefits from NowThis without having to fund the operating cost of the news site. Vox Media will maintain several business ties with NowThis, in addition to a minority stake in the new company, Jim Bankoff, the chief executive of Vox Media, said in an interview. Vox Media will continue to sell advertising for NowThis, and one of the company’s employees will join NowThis’s new board of directors.
“Consolidation for consolidation’s sake is not something that we at Vox Media have believed in,” Mr. Bankoff said. “Our strategy has focused on constructing a best-in-class portfolio of high-quality, highly relevant properties that speak to modern audiences via modern platforms, and monetize in a diverse set of ways.”
NowThis, which has 75 employees, has been ramping up to cover an election that millions of people will follow from their phones and on social media. The site’s audience has been steadily growing on platforms like TikTok, where it receives an average of 70 million views a month.
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“Audiences want that intimate connection to people like them talking about the issues that matter,” Samara Mackereth, NowThis’s editor in chief, said in an interview. “That is why video diaries, Skype interviews, to-cam explainers and op-eds really resonate with our audience.”
As an independent company, the site plans to forge new partnerships, similar to ones it has with the Emerson Collective, whose investments have included The Atlantic and Axios, said Jessica Borovay, NowThis’s head of production and operations. In addition to politics, it will continue to focus on coverage of climate change, abortion rights and gun legislation.
Vox Media is spinning off NowThis as the media landscape grows trickier for digital-media companies, many of which have been hurt by the recent downturn in the advertising market.
In January, Mr. Bankoff announced that the company was laying off about 7 percent of its staff, citing the possibility of a “prolonged downturn.”
Vox Media’s valuation in recent years has declined considerably even as the company has grown. In 2022, Vox Media acquired NowThis, as well as niche sites including the Dodo, after the purchase of New York magazine and its related sites in 2019.
But in February, as Vox Media raised $100 million from Penske Media, it was valued at roughly half of what it was worth in 2015.
Around the time of its fund-raising, Vox Media had been meeting with other media companies to discuss potential acquisitions or sales of some of its properties, two people familiar with the discussions said at the time.
The spinoff of NowThis provides Accelerate Change with a chance to branch out into general-interest news. Founded in 2012 by Peter Murray, who was a founder of CrowdTangle, a social-media tracking service, Accelerate Change has incubated or provided services to news sites that focus on specific communities or demographics. Among those sites are Push Black, focused on Black culture and news; Pulso, for increasing engagement in Latinx communities; and Parents Together, a parent-led news organization.
Mr. Murray said NowThis’s focus on young people was a particularly appealing selling point. “It’s built by and for that community, and that’s really what we look for in our properties,” he said.
Source: | This article originally belongs to Nytimes.com
