Big Media Target Tech Companies in Buying Spree
News Corp nabs Storyful while Tribune buys Gracenote in what analysts say is a bid to scale quality content across social networks.
This story first appeared in the Jan. 10 issue of The Hollywood Reporter magazine.
In a trend that could continue through 2014, traditional media powerhouses are snapping up digital services.
On Dec. 20, News Corp, the publishing company spun off in June with $2.6 billion in cash from Rupert Murdoch's more profitable entertainment assets, revealed its first acquisition: Storyful, a nearly 4-year-old company that verifies and licenses viral news content. The $25 million deal, spearheaded by News Corp CEO Robert Thomson, allows News to scale Storyful's service globally and integrate its verified content with newsroom-produced video.
"At our core, we are a high-quality news and information company and we are not trying to change our stripes," News Corp senior vp and deputy head of strategy Raju Narisetti tells THR by email. "Technology is going to be a key underpinning of our offerings but is not the end goal."
The company plans to be "selectively opportunistic in looking at acquisitions that help speed our digital transformation."
News Corp isn't alone in trolling for tech deals. On Dec. 23, Tribune Co. unveiled a $170 million purchase of Sony's Gracenote, a music data service that will be merged with entertainment data provider Tribune Media Services. The move comes as Tribune, emulating News Corp and Time Warner, plans to split its publishing assets from its higher-value broadcasting business.
Many of these digital acquisitions provide a cheaper way to scale quality content via social media and other aggregators, notes news industry analyst Ken Doctor. "You're able to use tools like these to create more content, get it out quicker and at a lower cost point," he says, forecasting that mobile apps such as Circa, which aggregates news content, will be on media conglomerate wish lists in 2014 as traditional powers seek to keep pace with digital startups.
Adds Doctor, "[These technologies are] really important because the economics of the business have changed."