Next-Gen Media, new acquisition trends. (Or why The Hustle was bought by Hubspot)

At the start of February 2021, The Hustle, a next-gen media business focused on startups, business and tech announced it was being acquired, in signature style - BOOM! The Hustle is getting acquired!

The real story is who the buyer is: Hubspot. The reasons for the acquisition are outlined here, summed up in this quote from HubSpot CTO and co-founder Dharmesh Shah:

“We believe that the next generation of software companies will invest in media that earns the attention of their audience. Instead of the traditional model of having a software company embedded inside of a media company, we predict that the next generation of tech companies will have the opposite – a media company embedded inside a software company”

This isn’t the first instance of a brand buying a media property but it’s the latest example in a trend that signals a step-change in how brands are using content; buying an asset with a ready-made audience they are already advertising to, plus an archive of content relevant to the brand, rather than waiting to build both over time.  

For instance, in early 2020 US media brand, Barstool sports was acquired for $450m. 

This wasn’t publishing industry consolidation, or a fire sale. It was a purchase of a $multi-million media asset by one of its advertisers – Penn National Gaming.  

At the time it raised a number of questions about the future operating economics of Barstool, not least how advertising revenues will be affected in future. But media and publishing brands were already diversifying revenues by focusing on membership/subscription programmes, events, tech licensing and direct to consumer product sales, etc. And then came COVID-19 which accelerated these trends…

And anyway - bigger picture - if Penn acquires and retains more customers and increases ARPU via the media assets and first-party audience data they now own then it’s a win.

Then in March 2020, as reported in Forbes, the UK-based media company, Courier - which aims to educate and ‘build a movement’ of entrepreneurs and small businesses - was bought… by Mailchimp.  

The reported reason for the purchase was to access Courier’s content, which fits with Mailchimp’s purpose of helping its customers to be more successful. 

For some time now, the phrases ‘brands as publishers’ and ‘brands as media owners’ have been used to describe ever-increasing flows of marketing investment towards content marketing and brand-owned media. The examples here highlight an alternative approach to this; buying rather than building to get there faster.  

The Hustle, Barstool and Courier were independent startups that either disrupted an existing market, or broke new ground, developing an audience with unmet needs. So these acquisitions are great news for all startup, next-generation media brands. 

In the past, the exit route for the founder of a startup media or content business would probably have involved a trade sale; being bought by a media group to power-up their innovation strategy, or to bring a potential disruptor on-side. 

But now it looks like the options have opened up with more of these next-generation media businesses being bought by corporates, venture builders and brands outside of the media sector, to acquire and leverage their content and community.