Five-year-old U.K. publisher Jungle Creations will launch a monthly subscription craft box in August, spun out from one of its six media brands, Craft Factory. The boxes, priced at $29.99 (£23.63), will first roll out in the U.S.
“Commerce is not an insignificant part of our overall business model, we’re forecasting it to account for a third of our revenue this year,” said Melissa Chapman, chief content officer at Jungle Creations at the Digiday Video Summit Europe this week. “Craft Factory has been our fastest growing media brand and we could clearly see the demand from our audience to create the crafts we make in our videos. We’re making crafting easier by bringing it straight to their door.”
Surveys run on Craft Factory’s audience, which has 8.6 million followers on Facebook, found they actively craft between four and six times a week.
Craft Factory, which publishes craft videos, like how to make watermelon soap or make your own jewelry, is one of Jungle’s newer brands. It launched 12 months ago after the publisher saw the success of original content on its food channel, Twisted, post-Facebook’s algorithm change.
According to Tubular Labs, Craft Factory’s Instagram audience doubled in the last six months to nearly 900,000 followers. During that same time-frame, Craft Factory has grown YouTube subscribers three-fold to nearly 430,000. On YouTube, 30% of its audience comes from the U.S.
Each month the publisher will decide which crafts to turn into videos, box and ship, based on a combination of themes it already knows have appealed to audiences — tie-dye for instance — and crafts it knows that people have made. The publisher will weigh up the more practical concerns like what materials fit through a letterbox and are affordable, to ensure margins are strong. The publisher’s insights team will comb social comments for suggestions and feedback. Another bonus with monthly subscription boxes compared to a wider e-commerce marketplace is being able to more easily forecast stock, she added.
Each month Craft Factory will publish a new video promoting that month’s craft, where audiences can click through to subscribe, as well as more general marketing videos. The publisher is working with an existing partner for processing and fulfillment.
The success of Craft Factory’s subscription boxes will test the strength of media brands built on social channels, which have typically been downplayed as environments where brand identity struggles to gain traction.
Backed by £3 million ($3.8 million) in funding, Jungle Creations has diversified from depending solely on Facebook for traffic and revenue. Subscription products add more value: Media companies with recurring direct-to-consumer revenue lines can fetch a value eight to 12 times their earnings before interest, taxes, depreciation and amortization, or EBITDA. By comparison, solely ad-funded media companies, which can command between four and seven times EBITDA.
Many publishers have entered the commerce market as a way to drive incremental revenue and prop up a volatile ad market. Last year, Jungle Creations made £16 million ($20.30 million) in revenue, $1 million came from selling socks on Facebook and Instagram, after it created a new brand, Lovimals, to sell the socks through paid social ads.
“There’s a big difference in launching a commerce product from an existing brand because the customer base is already there, they’re already engaged with you,” said Chapman. “Craft Factory has a tongue-in-cheek tone that the audience responds to, we’ve built up that audience trust over the last year.”
Making sure that the audience isn’t bombarded with ads for its new subscription box will be front of mind. Here it has some experience too. The publisher began rolling out delivery-only restaurants two years ago, most recently announcing it now has six sites in the U.K.
Jungle has a team of six people working in commerce, four creating commerce-related content and two on operations and customer service. These commerce ambitions are extending elsewhere: This August it will launch Twisted Store, selling a range of Twisted branded kitchenware, from enamel bowls to tea towels to its first recipe book. The items will feature in Twisted’s three daily recipe videos. Prices start at $7.99. Selling products rather than advertising is a route taken by other digital media companies like BuzzFeed’s Tasty and Tastemade.
“Ultimately, this is about bringing our audience what we know they want,” said Chapman. “We’re not just a media company anymore, but starting as one has given us the tools, data and insights to hone in on the commerce ventures that make sense and that are going to add the most value.”