Specialist
Former manager at Vox Media LLC
Agenda
- Vox’s operating environment and demand catalysts across categories such as rise of first-party data
- Competitive analysis vs BuzzFeed (NASDAQ: BZFD) and Vice Media, highlighting Vox’s key differentiators and relative scale
- Vox’s strategic rationale for announced acquisition of Group Nine (NASDAQ: GNAC), including expansion of aggregate audience size and range
- Revenue mix diversification vs BuzzFeed and potential expansion of subscription business
- Outlook for 2022 and beyond – continued media consolidation and possible acquisition targets
Questions
1.
Could you set the scene around Vox? What is your take on its operating environment and the main segments and brands?
2.
What broader demand headwinds and tailwinds should we monitor for Vox? What demand catalysts are there for advertising and content across entertainment, news and other categories such as gaming? Where is the highest market growth and demand?
3.
You mentioned Apple’s privacy regulations open the door more for publishers. What are the impacts of these regulations and the upcoming removal of third-party cookies? Is this impacting Facebook and the walled gardens, thereby increasing the slice of dollars Vox can pursue? Are there other positive or negative impacts?
4.
You said the rise of first-party data opens the door for publishers such as Vox, Vice and BuzzFeed to take market share from Facebook. How could Facebook’s reported USD 0.85 of every digital dollar shift or shrink given its recent challenges with data and privacy regulation changes?
5.
What is your outlook for opt-in trends for Vox’s audiences in particular? Will the company be well-positioned to monetise its first-party data sets when Google’s cookies vanish at the end of 2023?
6.
Why does scale matter in media? Could you define Vox’s scale, what it entails and how it compares to other premium publishers such as Vice and BuzzFeed?
7.
It seems scale is the ability to reach larger and more diversified audiences and expand the advertisers’ reach. What will Vox and BuzzFeed’s agreed acquisitions of Group Nine and Complex respectively mean for their scale? There’s a lot of consolidation in the industry, but are there also ways to build scale aside from M&A?
8.
Is it detrimental to Vice that it’s not necessarily in a position to acquire? Are there other ways to build scale or is M&A the easiest route?
9.
Another specialist explained that Vice needs to either age up with millennials or age down [see Vice Media – Business Model Overview & 2022 Outlook – 20 December 2021]. How does Vox’s reachable target audience compare to that of Vice and BuzzFeed?
10.
What new product categories from the Group Nine acquisition will offer Vox the biggest opportunity to gain market share over the next year? You mentioned The Dodo and the animals category, and there’s also NowThis, Seeker, Thrillist and PopSugar. What other new lines of revenue would you highlight for Vox’s portfolio?
11.
How strong do you think Vox’s IP play is with the Group Nine additions to its portfolio? What IP opportunities are there for monetisation across the different business units?
12.
You mentioned BuzzFeed’s revenue is largely ad-supported. How diversified is Vox’s revenue mix in comparison? What has it done to diversify or mitigate the risks of being largely ad-supported?
13.
How do you expect Vox to build out or expand its subscription business over the next year or so as it integrates Group Nine? How might the company’s advertising and the subscription business contribute to revenue mix? Could advertising be less than 20% or 30% of total revenue? Your mention of the New York Times as a comparison model is helpful.
14.
Is Vox exempt from increased content production or traffic generation costs? Are there any risks or uncertainties to monitor over the next year or so that could impact its margins and profitability?
15.
Vox is expected to generate more than USD 700m revenue in 2022 post-acquisition. How confident are you that it could drive revenue over USD 1bn in the next 3-5 years? What will drive profitability and revenue growth and what is required to ensure this growth is long-term and sustainable?
16.
What’s your consolidation outlook? How might fewer players due to consolidation impact the broader media marketplace over the next 1-2 years? Are there still acquisition targets in the media segment with decent scale and value?
17.
Which company among Vox, Vice and BuzzFeed do you think will have the more positive 3-5-year trajectory? Could you give a ranking? Do you have any thoughts to tie the discussion together?
