Media Fortune Fame & Folly

Discovery buys cycling network as streaming soars

Discovery Inc, the world’s largest factual broadcaster and owner of Eurosport, has acquired the 29.3% it did not already own of Play Sports Group (PSG) operator of the UK-based Global Cycling Network (GCN). Last month, it bought the remaining shares from founder Simon Wear who, with fellow investors, had successively sold 20% and 51% for a total of £40m during 2017-19.

The buy-out valued PSG at an estimated £70m (4 x revenue). Wear, who had owned 76%, is staying on as CEO for a further four years. He has also bought back the Shift Active Media cycling marketing agency which he founded 10 years ago as the start of what became PSG.

GCN claims to be the world’s largest and fastest-growing cycling channel. Its “videos bring fans compelling daily content including expert tutorials, techniques, training, unparalleled behind the scenes event coverage, humour and entertainment. Presented by ex pro riders, it offers a uniquely qualified insight into the world of cycling, fuelling its viewers’ passion and knowledge”.

It is eight years since since GCN – which now has more than 2.5m YouTube subscribers and publishes 300 videos a month – was launched by Wear, a life-long cycling enthusiast who had quit an 18-year publishing career at Future Plc to turn his sport into a business. He had begun by selling ads on Mountain Biking UK magazine. He eventually became COO of Future’s UK operations, having led its dramatic growth in international licensing revenues for niche magazines as diverse as T3, Guitarist, PC Gamer, and Cycling Plus. His passion for specialist media was a perfect match for the magazine company founded 36 years ago by TED’s Chris Anderson in the picture-book city of Bath in England’s South West.

Anderson described his sparky hometown magazine business as “Media With Passion”. But there was sometimes more passion than profit at Future which suffered a succession of near-death experiences after its high-flying IPO in 1999. The home-spun, try-anything publisher was a brilliant business school for Simon Wear, whose entrepreneurial instincts were later spiked by the 21st century decline in magazine business. By then, he had fallen in love with online video and “the limitless distribution and total meritocracy (the best content wins) of YouTube. I just had to work out how to do it.”

Back in 2013, observers assumed that Wear’s Bath-based launch of GCN was actually coming down the road from Future whose cycling-magazine web sites were then attracting over 5m monthly uniques. At the time, we said that GCN was an indication of how much “magazine publishers like Future will have to change in order to compete. Suddenly, the world’s leading cycling publisher finds itself on the outside lane in a key growth sector.”

Eight years later, the Play Sports Group (still focused exclusively on cycling despite the corporate re-branding) is powerful fan and community -based media The realisation that the future of so much media lies in “narrow-but-deep” content and relationships is nothing new. Indeed, for all the damaging loss of print advertising, the relatively steady audiences still enjoyed by many specialist magazine brands underlines the continuing promise of media produced by enthusiasts for enthusiasts.

PSG is the world’s largest cycling media community, claiming more than 40m cycling fans and riders globally across its portfolio of road cycling, mountain biking, triathlon and e-mountain biking channels. It delivers original content in multiple languages presented by cycling professionals on channels including GCN, Global Mountain Bike Network, and the Global Triathlon Network. It has fast-growing local channels in Spain, Italy, Japan, and Germany. Last month, it had 130m video views from 27m people worldwide.

It generates most revenue from sponsorship and advertorials, but also from its own branded merchandise and the sale of data/research to manufacturers and retailers. Advertising accounts for less than 5% of revenue.

It is one of the best examples of how digital media can captivate and monetize a specialist audience that was once hooked on print. It’s obvious that online beats print with moving pictures, interactivity, live action, and global reach. But the GCN success also reflects the seismic shift of the ‘reviews’ content at the heart of specialist magazines about boats, bikes, cars and much else. Post-digital consumers everywhere have become accustomed to a multiplicity of authentic reviews and ratings by their peers: “mass reviews” instead of the sketchy insights from journalists that have been the staple of magazines for decades. Peer-to-peer reviews and ratings are at the heart of the success of GCN and much else in digital media.

But a sign of just how the former magazine publisher’s creation has progressed is this year’s launch of GCN+, a streaming service featuring almost daily releases of feature-length travel documentaries, tech features, biographies and races. The ads-free, subscription service is available on smart TVs, tablets, computers, Amazon Fire, and Apple TV at a price of £40, $50, or €50. GCN meets Netflix.

The first films included a GCN+ crew riding a 186-mile off-road descent down an active volcano in Chile, a profile of world champion Swiss cyclist Fabian Cancellara and a profile of companies making bikes by 3D-printing. This month, there’s an amazing insight into the sub-culture of bike messengers (yes) conducting races through the world’s major cities while delivering packages: there’s probably a whole bunch of cyclists racing “brakeless” through your town right now.

GCN+ is packed with easy-to-view films, documentaries and shows on bikes, history, tech, and cycling stars. The service also incorporates Race Pass which broadcasts 300 days of live professional racing including the sport’s best-known races. GCN+ looks, feels and functions like Netflix.

The streaming service is believed to have more than 200k subscriptions (in just two months) and may already be getting close to breakeven. It is turbocharging GCN revenue growth which may reach £25m in 2022 (up from £15-20m this year), with perhaps 50% coming from streaming. That shows how PSG/GCN has matured and seems set to grow even more rapidly under the 100% ownership of Discovery whose Eurosport cycling portfolio includes: all three Grand Tours, more than 35 UCI World Tour races, including all five Monuments, and the UCI World Championships. Earlier this year, Eurosport and GCN together signed a five-year deal to provide live coverage of the Tour of Britain and Women’s Tour road cycling races.

Discovery’s focus on cycling follows its move into golf, and highlights the strategy to serve global communities of fans and enthusiasts in specific sports genres across all media. It did $2b an deal with the PGA Tour, launched GolfTV and expanded its golf rights portfolio. The strategy is “to be leader in brands and products that power people’s passions.”

GCN’s YouTube channels are harcore cycling but also have videos on how to fix a puncture and how to teach kids to ride. GCN+ is expanding on this, making the content even more broadly entertaining to help people get into cycling. In times of an eco-charged worldwide boom in bikes, it’s good business.

There are many reasons why we should be interested in the Global Cycling Network. Not because it is now owned by the $18bn Discovery and might, therefore, become as prominent on TV sets as on tablets and smartphones. But because a former magazine publisher has created worldwide specialist media which could be the model for many other B2C and even B2B brands.

Simon Wear has built a global multi-platform community of fans and enthusiasts well beyond the reach of the magazine brands that once “owned” cycling media, and also beyond the reach of the data giants which dominate mass marketing.

The GCN secret sauce is the passion and versatility of Wear and his team. To say the very least, the business knows its audience and does everything to engage and excite them. Next year, some 20,000 people will descend on an Austrian ski resort for GCN’s Festival of Cycling, three days of cycling, music, food and entertainment. The whole GCN community is alive with tips, tricks, tech, adventure, and personalities.

But it’s also sophisticated marketing. GCN made an early art of building YouTube expertise. The Google-owned network’s European boss once described GCN as “a shining example of how to grow a passionate audience of fans using YouTube’s platform.”

Now it’s all about the new frontier of streaming.

But PSG/ GCN is really a specialist, deep-dive magazine publisher without a magazine: content by enthusiasts for enthusiasts. It exploits the excitement of its cycling community – without fear of accelerating the decline of a once mighty magazine or newspaper that cannot keep up. All this is happening at a time when broadcast and video streaming are melting together to create the opportunity of reaching the largest audiences of all. You can do it.

Play Sports Group