‘We’re trying to build a Time Warner’: Group Nine CEO Ben Lerer on the view from his new holding company
Three months ago, Thrillist CEO Ben Lerer declared on the Digiday podcast that his company would be on TV within a year. A $100 million bet from Discovery Communications just gave that claim a lot more credence.
On Thursday, Discovery’s digital network, Seeker, announced it has joined together with Thrillist and two other Lerer family-owned media businesses, NowThis News (co-founded by Ben’s father, Ken) and The Dodo (founded by his sister, Izzie), to form a holding company called Group Nine Media. Discovery’s $100 million buys it a minority stake; the German publisher Axel Springer, which has stakes in both Thrillist and NowThis, is the second-largest stakeholder.
Lerer wants Group Nine to be a video giant, and from a raw numbers standpoint, it’s off to a good start. Group Nine’s media properties drive some 3.5 billion views across the social web every month, making it one of the five largest digital video content companies out there. It also has a direct line to Discovery, one of the world’s largest cable networks, setting the table for Group Nine to start gorging on TV advertising dollars very soon.
But before it can get there, Group Nine needs to grow past the quick videos that attract most of its current eyeballs. It needs to ramp up its ad sales team so that it can sell across four properties instead of one. It needs to learn what content buyers and consumers want, especially the millennial consumers that Group Nine’s sites have put so much effort into reaching.
To unpack what this all means, Digiday caught up with Lerer, newly named Group Nine’s CEO. In some cases, his answers have been edited for brevity and clarity.
You just finished telling your employees the news. How’d it go?
I honestly was, like, tearing up like a 7-year-old child. So aside from my lack of emotional fortitude, I think it went really well. People are really excited, for obvious reasons.
Group Nine isn’t quite an 800-pound gorilla, but you now have a lot more reach and a lot more scale. What do those upgrades enable you to do?
We have this pretty fundamental belief that consolidation is coming to media. If you study your history, with every big disruption, consolidation always comes. I look particularly back at the cable business, and how all these cable networks emerged, many of them like startups in the ’70s and ’80s, and built themselves on the dominant pipes of the time, which were linear TV pipes. And then over time, they banded together, and that’s the Viacoms and the Time Warners and the Discoverys.
These holding companies owned all these different assets that were deep and wide: Deep in that they owned specific audiences and specific tones and areas of expertise, and wide in the sense that they were able to sell across all of them, and use that collective power to hold more weight in the market and have different kinds of conversations. We look at digital and the same thing is happening. We’re trying to build the same version of what a Discovery, or a Time Warner, or a Viacom would look like in the digital world.
It sounds like you want to grow into long-form video content for all of Group Nine’s brands. Are they all ready for that?
These are all categories that have supported big, linear TV businesses. With Animal Planet and Nat Geo in the animal space, obviously in the news space with NowThis, the food and travel space with Thrillist, and with Seeker in the science and technology space, there have been giant linear cable networks that have succeeded really well in these categories.
There are different levels of readiness. Seeker is the one that’s by far the most ready, and a big reason for that is the fact that they’ve been part of Discovery. This is going to be a process, but we’re going to be able to build infrastructure that standalone brands wouldn’t be able to put in place.
One of the things you’re going to use that $100 million infusion on is expanding into new verticals. What kinds of things do you think are most ripe for expansion?
They’ll need to check a few boxes. It needs to be a category that has been able to sustain success on linear television networks, big enough from a consumer and advertising perspective to have thrived in the cable world. But, equally important, it’s about brands that matter. So much of the content that’s created today is just this lowest common denominator clickbait. The idea needs to be creating brands that if they disappeared tomorrow, people would notice. People would actually miss them. That means deep expertise in a subject.
Companies like Viacom are struggling right now because your core audience isn’t watching TV as much as preceding generations. Why make linear TV if millennials appear not to be very interested in it?
It’s a great question: If these people aren’t even watching TV, then why bother? The why bother is, it’s not like nobody’s watching TV. Who are we kidding? It’s not like advertisers have decided they’re done spending on TV. It’s a gigantic business. The reason TV has been so reluctant to give up on that and move on to the next model is the dual revenue stream. It’s magnificent. We can get paid to make the content we sell to advertisers.
I want these brands to become trip-over brands. Vice has done a better job at that than everyone else. Name a big platform that Vice doesn’t have a presence on. It puts them in a really enviable position. I would sound naive if I said I was going to do that. But we have audiences that love our brands. Brands that have strong voices, brands that are incredibly savvy in creating video, and we’re going to learn a lot in the difference between a one- or two-minute video and a 2-minute show will look like, but we have brands that matter.
Member ExclusiveDigiday+ Research: Where publishers see revenue growth in 2022
Publishers with diversified businesses are less optimistic about ads growth than those focused purely on advertising.
Why media unions are demanding to participate in management’s return-to-office planning
Media unions demand management come to the bargaining table over RTO plans and are fighting back against office return mandates and dates.
Recurrent Ventures – the next big private equity-fueled media conglomerate?
Private equity-funded Recurrent Ventures now has 20 digital media brands under its purview — and is on the hunt for more acquisitions. But is its approach to injecting new life into these titles sustainable?
Sponsoreddigital out of home
what is DOOH
WTF is Web3?
Web 3.0 is set to change the way brands interact with consumers, publishers engage audiences and the way the advertising business is conducted online.
How Leaf Group transitioned to being a commerce-dominant media company
After its recent acquisition by Graham Holdings, Leaf Group's CEO Sean Moriarty said vertical-focused expertise is the best direction for continued growth.