His portfolio now includes some strong digital brands including: Bustle (a women’s digital magazine), Elite Daily (millennial lifestyle), Romper (motherhood), Zoe Report (luxury fashion), Mic (news), The Outline (culture), Flavorpill events – and legendary gossip blog Gawker which he bought out of bankruptcy. BDG claims an aggregate 80m monthly uniques in the US, 75% of whom are female, primarily aged 18-34.
Goldberg has been buying up distressed digital assets at a fraction of previous prices or of the sums spent by starry-eyed investors. He bought Gawker (once worth $250m) for $1.4m, and Mic for $5m (less than 5% of its 2017 valuation). But he wants the world to know he is about more than smart deals and cost-cutting. He claims that revenue at Zoe and Elite Daily have grown by more than 100% in the 1-2 years since he acquired them, and he expects the same from Nylon. Not only will BDG be taking on the whole Nylon editorial and design team, he says he will be paying them more – and hiring more people.
Whatever the detail, even snarky reporters have noticed a new tone from Goldberg who says: “Nylon’s bold and colourful legacy has developed a cult-like status over the years. We’ve been interested in this property for a long time. We felt it was a natural fit for our portfolio. It’s a model of influential beauty and fashion brands. It’s a tough time to be an independent, or family-owned, magazine. But this brand has real strength. We think it can be a premium brand for the next 20 or 30 years.” More than that, BDG plans to bring back Nylon in print — not as a monthly magazine, but in special issues tied to “flagship cultural moments”. It will be BDG’s first foray into print publishing: “We view print as an extension product. It’s impossible to think about Nylon without thinking about the magazine covers. Print is part of who Nylon is.”
He was inspired to get into media by a cousin who co-founded Vimeo. In 2005, Goldberg and two school-friends launched the Bleacher sports site. It succeeded, partly because of the sheer volume of content pumped out (free) by the thousands of sports fans who were the writers and readers of stories that matched what people were searching for on Google. Those were the days when clickbait made digital entrepreneurs into masters of the online universe.
Within a few years, Bleacher was pushing the online sports audiences even of ESPN and Yahoo, which was enough to persuade Time Warner to buy the loss-making site for more than $200m in 2012.
Goldberg left with his winnings and decided to apply the same “citizen journalism” to sites for millennial women.
He launched Bustle in 2013. Critics have consistently sniped at his use of unpaid interns and a sometimes patronising, tone deaf approach to women. But the media industry is now taking more seriously the man who has hired experienced print-centric magazine executives including: one-time editor-in-chief of Condé Nast’s former Details magazine to relaunch Gawker, later this year; and Elle ‘s Executive Editor as editor-in-chief of Bustle, Elite Daily and Romper. The media-savvy appointments, expansion plans and, for example, Goldberg’s acquisition of the struggling, but beautifully-designed The Outline, have been a contrarian force in a market where former high fliers like BuzzFeed, HuffPost, Vice and Vox have been laying-off hundreds of people.
In five short years, Goldberg has grown BDG from one site to a portfolio of eight brands. He says 2019 revenue will be $100m, some 30% up on last year, and the company will be profitable in 2020. Most of his revenue is advertising but there is a growing emphasis on events and e-commerce.
BDG, which claims to be the “largest premium publisher reaching millennial women”, has raised about $80m in funding from investors including GGV Capital, General Catalyst, Saban Capital Group, Social Capital, and Axel Springer. The owner’s well-funded, strategic cockiness is a reminder of some basic truths about the magazine business he is targeting. Much of what magazine people say about their special One2One relationship with readers is true. You don’t need research to tell you that people who read magazines tend to trust the content and even the advertising, beyond that of most other media. But the problem is the business model.
Magazines have not suffered the mass exodus of classified advertising that so speedily drained daily newspapers of revenue. Instead, they have declined more gradually but magazine publishers have been squeezed between the need to create new media and to defend still-profitable print. That has been exacerbated by the simple reality that mass market and women’s magazines (like so many daily newspapers) tend to have relatively small volumes of the exclusive, distinctive, ‘must have’ content that is so vital to attract regular digital readers, let alone persuade them to pay. So much magazine-like lifestyle content is readily available online. That is a painful truth for magazine people as is the explosion of sponsored editorial (“content marketing”) to substitute for clearly identified display advertising. That – and the profusion of free subscription offers and bulked-up, bagged-up retail copies – is breaking the spell of magazines.
Everything about digital media emphasises the primacy of quality over quantity for readers who want to see and swipe. Bryan Goldberg is on to something when he couples his criticism of the broken business model of magazines with a strategy of hiring first-grade magazines people who know all about building deep relationships with readers.
The BDG founder’s assertion that print has a role to play in his mainly-digital Nylon is a reminder of just how much difficulty publishers have in accepting the need for print to become an ancillary channel for audiences that were once so captivated just by magazines. Women’s media, in particular, will increasingly be dominated by multi-media activity comprising:
- Smartphone-first content
- Product licensing
A lifestyle brand’s most profitable activity might come from any one of those ‘channels’, a complete reversal for publishers whose companies were built round the primacy of print, funded both by readership and advertising. For all their digital investments, most publishers remain dependant on print profits and cannot afford not to charge for their content.
Hearst Magazines was once the engine of its neatly-diversified parent and has recently been investing more than most in digital-only services. It’s even headed by former digital boss Troy Young. Next week, Hearst launches its first SVoD “All Out Studio” fitness app promoted by its magazines Men’s Health, Women’s Health, Cosmopolitan, Runner’s World, and Prevention.
The service, launching first on mobile app stores and Apple TV, will offer 35 hours of video content and 15 guided workouts, for a monthly US subscription price of $15, or $100 annually. Hearst magazines provide a strong promotional platform for video streaming but the project is careful to avoid damaging the revenue of its print brands. It will soon face competition from fitness companies like Equinox and SoulCycle which are planning media services offering video, audio and text. You surmise that such fitness specialists – and also digital-only media like Bustle – can produce similar video services to drive web traffic, free to readers as a promotional tool and/or funded by sponsorship and advertising. Unlike Hearst, they don’t have to worry about the ‘risk’ of free content for readers.
That’s the very definition of the disruption that Bryan Goldberg is bringing to magazine-media. He has been able to acquire expensively-built digital brands which, in some cases, are already a match for the much older print mastheads – and all his content is free for readers. He may become a formidable competitor by exploiting these brands, even in print, and says: “We don’t think the magazine companies are investing in the future – so we will.” He has been quoted as saying that BDG is “one of the least clever companies in New York” technologically but is “executing very effectively” on the basics: “Publishing will be fine – the next decade will prove that. What’s happened in the last few years has been unfortunate, a lot of mistakes have been made, but it would be extraordinarily foolish to give up on a product as profoundly important as the written word.”
BDG’s punchy media (and its war chest) is helping to fuel the next wave of investment and, perhaps also, much-needed strategic courage by traditional companies. With consolidation well underway in broadcast-streaming, it’s time for print media to catch up. Will the UK’s Daily Mail Group (failed former owner of Elite Daily) use its 188m global online audience to create ‘vertical’ women’s brands and drive profitability? Will News Corp acquire BuzzFeed? Will BDG buy a print magazine business or vice versa? Get ready.