RTL Group Close to ‘Hauling’ in StyleHaul — Here’s Why

/ Oct 27, 2014

stylehaul

The MCN world rests for no one. While the LA-based digital media was readying itself for the weekend this past Friday, Variety reported that Luxembourg-based RTL Group is nearing an acquisition of leading fashion- and beauty-focused network StyleHaul, which I just recently profiled for my blog. Terms remain undisclosed — although I am confident that the final price-tag is well north of $100 million.

No surprises here, apart from the unusual timing of the breaking news. RTL Group already owns a minority stake in StyleHaul, previously investing $6 million in the company. And CEO Stephanie Horbaczewski’s company has long been thought to be in M&A “play,” although US-based media companies were rumored to be among the leading candidates in those reports.

In fact, last week I moderated a panel at the Variety Summit in LA focused on the fast-breaking digital world — and predicted on the record that StyleHaul would be the next leading MCN to be gobbled up. In the past few months alone, Disney has bought Maker Studios, DreamWorks Animation-owned AwesomenessTV has absorbed Big Frame, and Otter Media has acquired Fullscreen. And, now this.

Why StyleHaul specifically and MCNs in general?

  • RTL Group already knows the company and its management team, since it already is a major investor and board member.
  • The fashion-and-beauty vertical 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 also 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, in addition to more typical ad revenues and sponsored/branded content opportunities; and remember, StyleHaul need not split any of its 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 forego traditional video programming in favor of the YouTube economy and nontraditional YouTube video “celebrities.”

And while StyleHaul is the latest, we ain’t finished yet. More vertically-focused MCNs will be swallowed up in the near-term. Here are my previous predictions, which haven’t been bad so far — two of the seven are now gone.

Check out more of Peter Csathy’s thoughts on the digital media space at the Digital Media Update.

Update: Added Variety’s name as the source of the RTL Group/StyleHaul report.

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