Trusted Media Brands the publisher of Taste of Home, Reader’s Digest and Family Handyman, today announced it has acquired Jukin Media, a digital video media company — making it the latest publisher to join the M&A race. The acquisition is an all cash deal, though CEO Bonnie Kintzer declined to share the exact terms of the sale.
The move signals that TMB is ready to debut its legacy publications in the digital video and OTT space.
Rather than spending months or even years hiring a production staff and building an in-house studio, however, the company decided to buy Jukin Media, which has led a distributed video operation for over a decade, to help direct TMB’s path forward.
Founded in 2010 by CEO Jonathan Skogmo, Junkin was grew its portfolio of brands like FailArmy, People Are Awesome and The Pet Collective on social media platforms and more recently streaming on 30 different OTT channels. Following the closing of the sale, Skogmo will stay on under TMB to continue growth strategy for Jukin.
Jukin is a profitable company, Skogmo said, and 2020 was a growth year for the digital publisher, despite the pandemic’s impact on brands’ advertising budgets. TMB is profitable as well and its EBITDA was up over 40% year over year, according to a company spokesperson, who declined to share hard revenue numbers.
While Jukin’s video expertise is a major appeal to TMB, Jukin’s audience size and franchisable brands are also attractive assets that Kintzer said justified this acquisition as an immediate growth opportunity.
Jukin presently has a staff of about 270 people while TMB has approximately 400 employees. Kintzer said she is confident that the teams are “complementary” to the growth goals that she has for both TMB and Jukin and is going to “spend some time to listen and learn” before identifying redundancies in staff or operations, meaning there are not any planned layoffs at the moment.
“This deal is all about growth — the revenue synergies are incredible and I’m sure that we’ve only touched the surface, so we’re not focusing on cost savings,” Kintzer said.
Pivot to video
Kintzer has four first priorities once the deal is finalized: launching an OTT channel for Family Handyman and for Taste of Home, and building out The Pet Collective and FailArmy into larger digital brands with their owned-and- operated websites.
Both Family Handyman and Taste of Home already have a degree of video content being produced — like FH’s paid courses business, DIY University — but Kintzer said that TMB does not have the in-house skillset on its own to build its video business out further than what it currently is.
The content strategy for TMB brands’ OTT channels is not set in stone, but Kintzer said she is relying on Skogmo’s team to determine what will work best with the resources that the Taste of Home and Family Handyman teams have.
“It’s a really smart, aggressive move by TMB to make this acquisition,” said Paul Greenberg, CEO of video strategy firm Butter Works. “They’re looking at their business and saying, ‘Unless we do something drastic, that’s really going to jumpstart us into the field of digital video, it’s going to be a tricky road for us,’” given the number of publishing competitors already in the space.
Across all of its social platforms, Skogmo said Jukin’s brands receive about 2 billion video views per month, collectively and is pacing to earn about 10 billion minutes watched on OTT in 2021, which will be about 100% growth year over year. Distributed media still accounts for the bulk of the publisher’s views, he said, particularly on Facebook, which has recently served as a boon for the user-generated media companies’ traffic. In the past 12 months, from August 1, 2020 to July 31, 2021, Jukin’s four collective brands generated 12.3 billion views on Facebook alone, according to Tubular Labs, averaging about 1 billion views per month.
Conversely, TMB’s portfolio received about 5 million views on Facebook all together, with Taste of Home and Family Handyman driving the bulk of those views, according to Tubular Labs.
The total online audience for its five O&O websites, however, was 40 million unique monthly visitors on average from July 2020 to June 2021, according to Comscore. Taste of Home carried the bulk of those views with an average of 24 million unique monthly visitors during that same period.
Jukin’s video strategy is largely focused on acquiring and distributing or licensing user-generated content. For example, FailArmy bought the rights to the 15-second-long Pizza Rat video in 2015, which only had 2,600 views at the time. The original video has since amassed over 11 million views and iterations of the meme rapidly grew on other platforms, now with the brands’ name watermarked in the corner.
Patch.com reported in 2015 that one video creator sold a video of two white men arguing about “settling” in Brooklyn within 5 minutes of posting to Jukin for $200 and a 70% commission on future profits the video makes from licensing or advertising.
Jukin’s monetization strategy is a 50-50 split between licensing and advertising (from programmatic, direct sold and branded content), Skogmo said. So taking bets on what will become a viral video before it catches fire and then wielding a strong copyright infringement letter for non-approved distribution of the video can easily keep operational costs low and profits high.
The licensing business, which licenses the rights to these viral videos for brands or production companies to use, sold about 2,000 contracts last year and has 500 deals so far this year. In all, the company owns the rights to 70,000-plus videos, he said.
“Trusted media brands [doesn’t] sell a lot of video. So [that’s] one of the things that’s particularly strong about this deal,” Kintzer said.
Adapting licensing and user-generated content strategies
In the immediate future, Kintzer wants to adapt the licensing business model to fit TMB’s photography and content business and try to earn some revenue through that new channel.
Greenberg said that getting other media companies and brand partners on board with content licensing might be a challenge for a special interest publisher, whose competitors would likely favor original content versus paying for someone else’s. The general entertainment category of Reader’s Digest might bode better for this business, however, he said.
“Licensing really was big in the era of portals like Yahoo and MSN and AOL, where they were just looking for tons and tons of content and they weren’t creating a lot of their own, It’s not a huge amount of overhead in terms of the business, so it could be a nice marginal revenue stream [for TMB],” Greenberg said.
Going after more user-generated content (UGC) with Jukin’s help is also an appealing strategy to Kintzer, given that there is a surplus of UGC that willingly gets submitted to the brands’ editorial staff in the form of jokes, recipes and DIY home repair tips every month.
TMB is not the only party that will be benefiting from this acquisition. Kintzer said she has plans to take some of Jukin’s brands and build them out into their own standalone properties with more definition and a more permanent presence online.
The Pet Collective is one of these brands she said she has her eyes on.
“We have tremendous pet stats in our digital audience,” Kintzer said. “When you think about what consumers and advertisers are spending in the pet space, we believe that The Pet Collective can be an incredibly powerful website in addition to what Jukin has already built on OTT and social.”
Commerce is another area where Kintzer said she can see building out both Pet Collective and FailArmy with affiliate and product licensing deals. In the past fiscal year, which ended on June 30, TMB’s commerce business has grown by 75%, according to the company. The company declined to share hard revenue figures associated with this growth.
“The Jukin team is focused first on social and then on OTT. Their web presence is not as strong as our web presence [but they are] powerful brands and [we want to] make them very strong digital destination sites along with real commerce,” Kintzer said.
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