The movie and television arm of Comcast Corporation (NASDAQ:CMCSA) has decided to invest an additional $200 million in BuzzFeed. Last year too, they had invested $200 million in this New York-based internet media business. At that time, NBCUniversal had also invested $200 million in Vox Media, including sites such as Recode, Curbed, SB Nation, and Verge.
It was learned that the final talks are currently underway. The two businesses are likely to close the deal soon.
Both parties did not comment. However, Carole Robinson, a representative of BuzzFeed said, “We have a great relationship with NBCU. We’re always talking about broadening the relationship as part of our plan to grow as an independent company”.
Last year, after the initial deal, Steve Burke, the chief of NBCU, had said that BuzzFeed was a global company that uses data, superior editorial abilities and technology for creating and sharing content in unique ways. NBCU was very upbeat about the deal. After last year’s investment of $200 million, BuzzFeed was valued at $1.5 billion. Currently, their business valuation stands at $1.7 billion.
Many Digital Media Companies Not Doing Well
Many analysts and investors are now wary of betting in digital media businesses as many of them are not doing that well. But, the segment has still attracted a lot of investments in recent times. The Walt Disney Co., for example, has invested $400 million in Vice Media. Recently, Discovery Communications too poured $100 million in media ventures.
BuzzFeed missed their revenue goals for 2015 because of their distributed media strategy where they wanted to find audience beyond their own apps and websites.
The internet media business managed to attract a lot of eyeballs on platforms such as Snapchat and Facebook, but this was not giving them the advertising dollars.
There were also reports that they had brought down their revenue targets for 2016 by half. But BuzzFeed denies these reports. Industry insiders, however, say that the new targets for this year are more practical.
Video Ambitions Likely To Be Boosted
However, after this latest investment, the video ambitions of BuzzFeed are likely to get a boost. More than half of their current advertisement revenue is from video content. The share of revenue from video is expected to go up to 75 percent in the next two years. It is clear from the move that Comcast Corporation (NASDAQ:CMCSA) has faith in BizzFeed’s video initiatives.