The MCN world rests for no one. While the L.A.-based digital media on a recent Friday afternoon readied itself for the weekend, leading trade publication Variety reported that Luxembourg-based RTL Group is buying leading fashion and beauty-focused MCN StyleHaul (we just recently exclusively profiled StyleHaul and its charismatic CEO Stephanie Horbaczewski). As expected, the deal values StyleHaul well north of $100 million—$150 million up to $200 million to be exact, based on satisfaction of certain performance criteria.
No surprises here. RTL already owns a minority stake in StyleHaul, previously investing $6 million. And, StyleHaul has long been reported to be in M&A “play” (although U.S.-based media companies were rumored to be the leading candidates in those reports). Just a few weeks back, MDM’s Peter Csathy moderated a panel at the Variety Summit in L.A. focused on the fast-breaking digital world—and openly predicted that StyleHaul would be the next leading MCN to be gobbled up just in time for the Thanksgiving season. 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?
- RTL already knows the company and its management team, since it already had been a major investor and board member;
- 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;
- Fashion and beauty products sell! And, that makes StyleHaul’s business model somewhat unique among 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 commerce revenues with YouTube;
- 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;
- 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 forgo traditional video programming in favor of the YouTube economy and nontraditional YouTube video “celebrities.”
Expect more vertically focused MCNs to be swallowed up in the next year.