'It puts us into a different class of media companies': Vox Media discusses the benefits of its New York magazine acquisition, including new advertisers and a $10 million-plus e-commerce business
- Vox Media agreed to acquire New York Media in what they said would create a strong media company.
- New York Media lost money most of the past 15 years and has considered cutting its eponymous magazine's frequency to monthly, two knowledgeable sources said.
- But New York's e-commerce site, The Strategist, is a bright spot, on track to make more than $10 million this year, sources said.
- New York's fashion coverage will also help Vox appeal to beauty and luxury advertisers, ad buyers say.
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Vox Media agreed to acquire New York magazine parent New York Media, a move the two companies said would create a strong, independent media company.
Pam Wasserstein, head of New York Media, told The New York Times, "It's not out of need. It's out of ambition."
The financial picture suggests other motives, though.
Started in the 1960s, New York is known for its famous writers and enterprising journalism that has made it one of the most award-winning magazines. It was bought by Bruce Wasserstein in 2004 for $55 million. But knowledgeable sources said it was losing money most of the past 15 years, with one source saying as much as $15 million one year.
The company started exploring a sale more than a year ago. At one point, Medium's Ev Williams reportedly looked at buying it. New York started talking to Vox Media in June, the Times reported.
Once-dominant magazines and newspapers have been in decline for decades as print advertising migrates to more measurable digital platforms, while newer, digital-only media companies have struggled to become profitable on online ads alone. Publishers have tried to diversify through events, e-commerce, and digital subscriptions and the like. Vox Media made a small profit last year and has said it would be open to mergers and partnerships with other media companies this year.
New York has a $10 million-plus commerce business
The newly announced deal could help New York by taking advantage of Vox Media's bigger audience, advertising tech, and other infrastructure. Vox Media reached 77.8 million unique visitors in August, while New York reached 37.5 million, per Comscore.
For Vox Media's part, the big benefits to acquiring New York are The Strategist, Vulture, and The Cut, which are its e-commerce, culture, and fashion verticals, respectively. Each deepens Vox's presence into a new business area and has revenue attached to it. The Strategist, which grows out of New York's history of trusted product recommendations, is on track to make $10 million-plus this year, said knowledgeable sources.
While New York magazine will benefit from Vox's bigger footprint, Vox CRO Ryan Pauley said New York Media will help Vox with media, entertainment, luxury, and beauty advertising to complement its existing travel, retail, financial, and consumer tech advertising.
Overall, with the addition of New York Media, he said, "We can credibly have a deep partnership conversation with every marketer in the world. Being able to say that puts us into a different class of media companies."
"It's going to give New York magazine scale outside of New York and beef up areas like fashion, beauty, that are not endemic to Vox," said John Wagner, group director of published media at the agency PHD. "The Cut is super exciting for Vox. Vox never played in that arena. The Cut actually goes to the fashion shows."
Both companies have high-quality sites and combining that audience makes them more attractive to advertisers, said Barry Lowenthal, CEO of The Media Kitchen. "Scale leads to packaging and at the end of the day, packaging leads to better opportunities, whether it's content or better rates."
At some point, Vox Media could leverage New York's local food content and live events, said Doug Rozen, chief media officer at 360i.
"It confirms the power of local and where it's getting more hot," he said. "Brands are looking to get more get into the scene as opposed to just buying impressions across media."
Insiders expect layoffs in non-editorial parts of New York Media
As for the fate of the beloved print edition of New York magazine, Jim Bankoff, CEO and chairman of Vox Media, told the Times that there would be no editorial layoffs and the print magazine wouldn't fold.
That doesn't rule out the layoffs of people in other parts of the business, though, which is typical in acquisitions. Insiders expect there to be cuts in New York Media sales, tech, product, ad ops, and events staffs, areas where Vox Media already has teams.
Pam Wasserstein said in an interview that no layoffs were planned, however.
There's still the open question of New York magazine's print frequency. The magazine already went biweekly from weekly in 2014, and insiders said the company investigated the idea of going monthly but struggled to figure out how to position it editorially. While the family is devoted to the print magazine, under Vox Media, that problem will shift to new leadership.
"The magazine is an incredible drag on the whole company," a source with knowledge of the numbers said. "It's an expensive product."
New York and Vox execs insisted they're committed to the current biweekly frequency, though.
"The business we're in is the building-brands business," Pauley said. "The brands very much resemble the brands we want to build. The weight the magazine holds still stands, and the loyalty remains, and that's one of the mediums the brand needs to exist in."