Study Hall Digest 10/7/2019

By Study Hall staff writer Allegra Hobbs (@allegraehobbs)

Sports Illustrated laid off more than 40 staffers. It’s all part of a major restructuring under TheMaven, a startup that bought the rights to Sports Illustrated’s digital and print publications over the summer. The staffers will be replaced by TheMaven contractors as the publication gears up for a re-launch in January (which so far looks to be pretty bleak). The plan, according to people who interviewed for contracting positions with TheMaven, is to turn the site into a content factory where underpaid workers churn out videos at a base salary of $25,000 to $30,000 in hopes of making extra cash through traffic bonuses. Sources told Deadspin the contractors would be required to register as LLCs in order to avoid getting sued for misclassifying full-time staffers as independent contractors. Then there’s this very promising anecdote: “I watched the presentation and it became clear that they’re all about volume and pumping out cheap click-bait stuff,” a source told Deadspin. “…[A] Maven guy [on the call] was like, ‘Yeah if you need help with volume you could go on college campuses and solicit free help.’” Very cool, normal stuff.

Another week, another big digital media team-up. But Vice’s acquisition of Refinery29, made official last Wednesday after months of exploratory chats, is hardly comparable to Vox’s acquisition of New York Magazine. The Vox/NYMag merger was noteworthy in that it was not, in the words of one analyst, a “distressed” sale — both companies were thriving with an impressive array of revenue streams, and neither seemed to be motivated by desperation or greed. Vox had carefully carved out a path to profitability, and New York had remained a family-owned shop until the sale.

Vice and R29, on the other hand, have both struggled to make returns on backers’ hefty investments. Neither are profitable; both have seen significant layoffs within the past year. One unprofitable company purchasing another raised some eyebrows, as did the optics of a company previously embroiled in a sexual harassment scandal buying an ostensibly feminist company (more on that later) but the deal still makes sense.

Refinery29 has struggled to free itself from being overly dependent on ad revenue, trying and failing to carve out a path to sustainability by pivoting to video — in the end, video only made up 7% of R29’s revenue. Vice has leaned heavily into video, and though it’s struggling to find its footing with Vice News Tonight, has seen enormous success this year letting advertisers buy instream ads for sponsored videos on its site and across other platforms. The company has done a pretty good job of diversifying revenue streams between its production arm and creative agency Virtue (revenue from the digital side makes up just 30% of Vice’s revenue).

So there’s clearly an opportunity for R29 to benefit from Vice’s reach and multi-platform prowess, and Vice gets to benefit from R29’s audience. Vice’s audience is mostly male. As of 2016 at least, this was true even of Broadly, Vice’s vertical for gender and identity stories that often focused on women’s issues. R29’s readership is overwhelmingly female; the company also heads up a thriving events business.

There’s an air of fatalism to the deal for R29. Employees who spoke to Business Insider seemed to think it was the brand’s last hope of staying alive. For Vice, which seems to be turning the ship around on its own, it seems like the cherry on top of a scale sundae. For what it’s worth, the company has claimed a valuation of $3.6 billion (though that is a speculative and ultimately meaningless figure — I’m old enough to remember when Disney wrote off its 27% stake in Vice, expecting it would never see a return on its investment).

But what of the culture clash? The common refrain, echoed in the New York Times coverage of the deal, that this is a toxic and bro-y company scooping up a progressive feminist brand, doesn’t really hold water. Vice’s past issues have been well-documented, but a “boy’s club” atmosphere is being deconstructed — current SVP Katie Drummond has batted away the narrative she was brought on to remedy some company-wide misogyny (that’s not the culture at Vice anyway, she says). Vice CEO Nancy Dubuc is also working toward more transparency, though I’m sure co-founder Shane Smith is just as misogynist as ever. (We’re all mad at Adam Neumann for pillaging WeWork but Smith parachuted out of Vice, which will probably continue to decline in value, with quite a bit of wealth, too.)

And anyway, the culture at Refinery29 seems pretty bleak! Susie Banikarim took to Twitter this past week to share her absolutely batshit experience interviewing for a job at R29 a few years ago, which is quite the roller coaster but ends with management badmouthing her to employees and lying about why she ultimately didn’t take the job. She then opened up her DMs to any current or former employees who wanted to share their experiences anonymously and posted some pretty shocking results, including punishing women for taking maternity leave and giving stressed staffers Xanax in lieu of a living wage or healthy job environment. The company’s former editorial director Mikki Halpin, who left in 2015, confirmed there was a lot of interference from marketing on the editorial side.

Anyway, R29 bosses, if you have any leftover Xanax hmu.

Consolidation is also taking over ad tech — and it’s probably going to do some damage to publishers. Taboola and Outbrain, rivals in supplying those gross ad-based content recommendation links on the bottoms of news articles, are joining forces in a $850 million deal. You know, those links with wacky headlines that make you think, “Why would a reputable news outlet want that on the bottom of their very serious news story?” (See The Awl on chumboxes.) It’s a smart move on Taboola and Outbrain’s part — it means building up a solid client list to rival the monopolizing forces of Google, Amazon, and Facebook. But for publishers, the lack of competition doesn’t bode well.

Outbrain and Taboola give publications large guarantees in exchange for exclusivity. This competition meant that if one of the two took away a guarantee, the publication could go to the other to bargain. That option won’t exist anymore, and could ultimately mean the loss of some ad revenue publishers have come to count on. Jacob Donnelly of CoinDesk, in his excellent newsletter A Media Operator, predicts that guarantees will shrink for publishers, and that publishers who have revenue sharing deals with either Taboola or Outbrain will see a decline in revenue.

Longread of the Week: Rebecca Jennings at Vox shadowed a TikTok famous teen in Alabama who has amassed 100,000 followers, chatting with her and her friends about the appeal and frightening volatility of online fame. “I feel like my biggest fear,” the teen, Haley, tells Jennings, “is just fading into like, nobody remembers me on TikTok.” Once-viral social accounts: the new Ozymandias. Look on my Followers, ye Mighty, and despair!

Entries & Exits

— Reyhan Harmanci, who was laid off from Topic when the magazine shuttered, is joining Gimlet as deputy head of programming.

— Justin Miller, after six years at the Daily Beast, is going to Medium, where he will be deputy editor of GEN Magazine.

Everything Else

— On the tail end of a tumultuous month that included a failed IPO and the resignation of its CEO, WeWork is considering selling its 23% stake in The Wing.

— Food52, a cooking and e-commerce site founded by NYTimes food journalists Amanda Hesser and Merrill Stubbs, has sold a majority stake to venture firm TCG for a whopping $83 million. I’m starting to think there is money in media and I’m just doing it wrong?

— Speaking of R29’s events business: Eater is currently expanding its events offerings — this year alone, the site has launched 11 new event programs and series for its brand and has either hosted or been a part of over 50 events for its parent company Vox.

— Sludge, a Civil newsroom that covers corruption, is begging for donations and is in danger of shutting down. If it doesn’t raise sufficient funds this month, it will “go into hibernation” Oct. 31.

— In the second round of layoffs this year, 11 full-time employees were cut from the Huffington Post video department. It’s all part of the company “realigning its video strategy,” per a spokesperson, which had previously consisted of licensing content to streaming services.