The digital media rollup dream is dead for the moment — now it's all about core brand strength

Digital media companies including BuzzFeed, Vice, Vox and Bustle Digital Group are sharpening their focus on core strengths.
The smaller media companies’ emphasis on differentiation echoes a larger media movement to cut costs and focus on brands.
Executives are split on whether the digital media industry will have another wave of significant consolidation, especially as companies look increasingly different from one another.

When a marriage or an engagement fails, it’s common for the participants to take time to work on themselves.

That’s where the digital media industry finds itself today.

After years of focusing on consolidating to better compete with Google
 and Facebook
 for digital advertising dollars, many of the most well-known digital media companies have abandoned consolidation efforts to concentrate on differentiation.

“What you’re finding is companies are trying to find a non-substitutable core,” said Jonathan Miller, the CEO of Integrated Media, which specializes in digital media investments. “The era of trying to put these companies together is over, and I don’t think it’s coming back.”

A 90% decline in BuzzFeed
 shares since the company went public in 2021, a failed sales process from Vice, the collapse of special purpose acquisition companies, and a choppy advertising market have made digital media executives rethink their companies’ futures. For the moment, executives have decided that more concentrated investment is better than attempts to gain scale.

“Right now, everyone’s trying to get through a tougher market by focusing on their strengths,” BuzzFeed CEO Jonah Peretti said in an interview with CNBC. “We’re in this period now where we should just focus on innovating for the future and building more efficient, stronger, better companies.”

What’s happening in the digital media space echoes trends from the biggest media companies, including Netflix
, Disney
 and Warner Bros. Discovery
. After losing nearly half their market values, or more, in 2022, those companies have emphasized what makes them different, whether it be distribution, brand or quality of programming, after years of global expansion and mega-mergers. Disney CEO Bob Iger said the word “brand” more than 25 times at a Morgan Stanley media conference this month.

“I think brands matter,” Iger said. “The more choice people have, the more important brands become because of what they convey to consumers.”

Making strategic decisions based on consumer demand rather than investor pressure is a pivot for the industry, said Bryan Goldberg, CEO of Bustle Digital Group, which has acquired and developed a number of brands and sites aimed at women, including Nylon, Scary Mommy, Romper and Elite Daily.

“Too many of the mergers were driven by investor needs as opposed to consumer needs,” Goldberg said in an interview.

The rollup dream’s rise and fall
From late 2018 to early 2022, the digital media industry had a shared goal. Pushed by venture capitalist and private equity investors who had made sizeable investments in the industry during the 2010s, companies such as BuzzFeed, Vice, Vox Media, Group Nine, and Bustle Digital Group, or BDG, were talking to each other, in various combinations, about merging to gain scale.

“If BuzzFeed and five of the other biggest companies were combined into a bigger digital media company, you would probably be able to get paid more money,” Peretti told The New York Times in November 2018, kicking off a multiyear effort to consolidate.

The rationale was twofold. First, digital media companies needed more scale to compete with Facebook and Google for digital advertising dollars. Adding sites and brands under one corporate umbrella would boost overall eyeballs for advertisers. Cost-cutting from M&A synergies was an added benefit for investors.

Second, longtime shareholders wanted to exit their investments. Large legacy media companies such as Disney and Comcast
’s NBCUniversal invested hundreds of millions in digital media in the early and mid-2010s. Disney invested more than $400 million in Vice. NBCUniversal put a similar amount into BuzzFeed. By the end of the decade, after seeing the value of those investments fall, legacy media companies made it clear to digital media executives that they weren’t interested in being acquirers.