Vice's deal for Refinery29: Why agencies should take note
Vice's acquisition of Refinery29 may not be a surprise – it’s certainly been a subject of speculation this year – but it is dividing opinions as to whether it will offer the new company the competitive edge needed to survive in today’s ever-changing and cluttered media landscape. (Digiday)
- Vice Media acquired Refinery29 for a deal that’s valued at around $400m
- Refinery29 is a women’s lifestyle publisher with a largely female audience
- Both companies have faced financial losses and significant staff cuts in the past year
- The new company will be called Vice Media Group, with Refinery29 continuing to operate as an independent brand
- It’s the second significant merger in the US this week following Vox Media’s acquisition of New York Media
When you’re up against global giants, smart, efficient mergers can give independent media companies the power to diversify and carve out a brighter future – but only if the differences are complementary and the individual expertise of each business is already strong.
The Vice Media and Refinery29 merger is reflective of what is commonly occurring in our market here in Australia. Better together, or risk becoming irrelevant in the face of global players?
In this case, the move certainly seems to answer one of Vice’s challenges – the need to extend its reach to Refinery’s female-skewed readership. The brands’ content offering will also complement one another – creating a cohesive content ecosystem – and the combined audiences undoubtedly offer a significant increase in scale. But these upshots alone are not enough to turn these businesses around.
It’s what both companies have managed to build in terms of expertise that gives this merger a real chance at ongoing success.
A case in point here: The respective in-house agencies. Media companies have struggled to create branded content studios that are strong enough to stand alone in their own right however both Virtue and 29 Rooms have managed to set themselves apart. Both offer clients the usual armoury, yet have carved out a USP to offer high-impact and much talked about solutions.
For Refinery 29, the standout has been the ability to create experiential events that bring art, celebrity and brands together seamlessly to create an immersive wonderland, while Vice’s agency has focused on creating TV, film and social content that is underpinned by youth culture. If these agencies can join forces and each retain their relevance, they will be serious competition for established shops.
Beyond the business assets themselves, the two very different cultures coming together will be one of the biggest challenges Vice Media Group will face.
Vice has been referred to as a ‘boys’ club’ in media circles, while Refinery’s team is made up of a largely female task force. Anyone who has experienced an acquisition of this type will know it’s often the workplace differences that can be the biggest hurdle. However, where a shift in culture may be a long time coming, a merger can act as that much-needed reset. The key is to retain the strength from both companies and forge ahead with a new vision.
Of course, with any merger it’s as much about the cost synergies as it is the opportunities. The companies have both faced financial challenges and the move will inevitably see a wave of redundancies. However, with the right structure, people and commercial offering in place, and leveraging the combined audiences from both, this may be the transformation that is needed to turn things around.