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Feb. 6, 2017, 11:42 a.m.
Business Models

Univision’s plans for the former Gawker sites: A shared business backend, less duplication, and a push into TV

“Think of all these sites as the digital, non-linear television arm of Univision.”

What exactly is Fusion? is a question many asked when the Univision- and ABC/Disney-backed television venture first launched, and asked again when it began hiring big-name journalists to helm its digital news arm, and again when the news site debuted in 2015. What Fusion wanted to be evolved yet again, as it expanded its target audience beyond “Hispanic millennials” to a multicultural demographic interested in everything, from heavyweight investigations to pop culture commentary to social justice issues to environmentalism to talking hot dogs. (Last April, Disney left the partnership.)

Then, in August, another shift: Univision bought the non-Gawker sites of the Gawker Media Group for $135 million, adding popular sites like Gizmodo, Deadspin, and Jezebel. In the whirlwind months post-sale, as Univision tried to integrate these new sites with the specter of lawsuits still hovering, the company laid off 200 people, a significant number of them from Fusion.

“Fusion’s intent was to build all those capabilities inside Fusion — to have a satire vertical, to have a food vertical, to have a women’s vertical, to have a vertical on sex and relationships,” Raju Narisetti, CEO of the renamed Gizmodo Media Group, told me in an interview last week, the day Fusion and the Root moved into the same offices as GMG. (Narisetti, a former News Corp senior vice president, was brought on in September to lead GMG.) “But then there was an opportunity for Univision to look at sites already out there — the Onion group on satire, or the Gizmodo group of sites. It’s just smarter to acquire them. Once that was done, as you’ve seen in the last couple of months, we then had to figure out: Why duplicate them, since we now have them?”

All the former Gawker Media sites, except for — R.I.P. — Gawker itself, now officially fall under the group known as Gizmodo Media Group, which falls under the Fusion Media Group, which includes Fusion the site, as well as sites Univision acquired in the past couple of years, such as The Onion and The Root. Everyone — including Fusion the site and the Onion sites — is moving to Kinja, Gawker’s publishing platform.

I spoke with Narisetti about what exactly Fusion is now, the relationship of the former Gawker Media sites to the rest of Univision, the goal of developing television shows off of those sites, and its ambitious doubling down on e-commerce efforts. Our conversation is below, lightly edited for length and clarity.

Shan Wang: Can you take me through the changes that the company has had to undergo in the past few months both on the business and editorial sides? I know, for instance, a single sales team is selling ads for the entire group.

Raju Narisetti: The idea behind putting these sites together into what is called the Fusion Media Group is that, in many ways, these are the web’s most irreverent and beloved brands, whether you’re talking about The Onion or Clickhole or Jezebel or Deadspin.

From a business point of view, what happens when you put these brands under one metric, is that we have the web’s premier audience at scale. The last couple of months we’ve had between 90 and 95 million unique visitors, and about 200-plus million monthly video views. That gives an advertiser trying to reach an audience that we have more uniques than most of our peer group — we’re bigger than Conde Nast, New York Times, Vox, Vice, BuzzFeed. We have more millennial readers, at 45 million, and we have more affluent millennials. So whichever way you slice this, we have the right audience from an advertising perspective.

Fusion and The Root are moving into the same location as the other Gizmodo Media Group sites. Obviously, the Onion group, which is based out of Chicago, will remain there. There are a whole bunch of horizontal streams — all of the sales, all of the native advertising, all of the programmatic, all of the video — and then on the backend, HR, finance — and those are all done, they’re all in place. A single sales team is selling all of the brands across the network.

All that work is what we’ve been doing for the last three or four months since GMG was acquired by Univision. There is work in progress, in the sense that The Root has already moved to Kinja, our publishing platform. Fusion is going to move onto the same platform at the end of March, and then we’ll be moving all of the Onion sites. Most of them are on WordPress, but they’re all going to come to Kinja.

All of the heavy lifting on that is done and now it’s a matter of executing against the fairly ambitious business plans we have.

On the journalism end of things, there may be some complementarity — the beauty of these sites is they have well defined and engaged audiences. So each of these sites will continue to serve their audiences. There’s some sharing of resources. If someone comes to The Root, there’s an ability to say “here are some interesting Jezebel stories,” and vice versa. There’s an opportunity to offer up more choices. The intent is not to mess with the fact that each of these brands already has a loyal, passionate audience. We’ll keep each of these sites fairly distinct in that sense.

Wang: Is this network complete for now? Are there blind spots or holes in your coverage or thoughts of trying to spin up a new vertical anywhere?

Narisetti: Mostly no. If there’s obvious duplication happening, then we’d want to reduce that actually. All of us face the same issue, where there are finite resources, and there’s little point in five sites doing the same five stories in five different ways. We want to not waste our journalistic firepower on narrow slicing of the same story.

We recently had a story about Netflix announcing you can download for offline viewing. Gizmodo has the story; that’s core Gizmodo coverage. Lifehacker weighs in, and says these are tips on the best way to do it. In the old world, every one of the sites probably would’ve wanted to do a news story. Now we can say, Gizmodo has broken the news, but we can point readers to that basic news story, but then each of the sites can do something different.

There’s no mandate that because X site is doing something, you can’t do it. But the pressure is to say: What is the Deadspin take on something versus what is the Fusion take something? This is up to each editor to define and understand their audience and how they’re meeting their audience’s needs. And they have the luxury of saying: I don’t have to do this, I can take it from a sister site, and I can put my resources to better use.

That’s up to the editors. A big benefit of the shared Kinja platform is they can see each other’s stories and can leverage each other’s stories a lot better — so some of the backend stuff can help with that also.

Wang: It’s easy for some to feel that, with the layoffs and with all these other sites on board, each carrying its own distinct audience, there’s nothing particularly defined or left to Fusion itself.

Narisetti: Sure, but not really. A few years ago, Fusion was really nothing but a Tumblr site. It evolved into a couple of directions. Univision wanted to go down a multicultural path, targeting young Hispanics, and then they added The Root, wanting to target African Americans. Then they evolve into saying, while there are young Hispanics, young African Americans, young Asians you want to target, their content consumption doesn’t necessarily start there. Young Hispanic want to read stories about tech, gadgets, gaming, as much as anyone else.

And then Fusion’s intent was to build all those capabilities inside Fusion — to have a satire vertical, to have a food vertical, to have a women’s vertical, to have a vertical on sex and relationships.

But then there was an opportunity for Univision to look at sites already out there — Onion group on satire, or the Gizmodo group of sites. It was just smarter to acquire them. Once that was done, as you’ve seen in the last couple of months, we then had to figure out, why duplicate them, since we now have them?

I think the opportunity with the brand Fusion is to create an umbrella site, which brings together the best of some of the other sites, while still delivering strong journalism on environmental issues, social justice issues, and political news that appeals to younger people.

Fusion is evolving to become an umbrella brand, which will showcase the best of all of our sites, while continuing to do what it’s done best in its years of existence — work around social justice, environment, political issues. We’ll double down on those for sure, but you’ll see Fusion evolving into the best of the network, in addition to providing its own original journalism.

Wang: There’s no hiring for the Fusion site specifically, right? All the new hiring is for sites within the Gizmodo Media Group?

Narisetti: Because of the acquisition, things that Fusion thought it would do itself, had to be pared down, and it’s unfortunate. The size of the Fusion team now is adequate to do what it needs to do: focus on a few of these topics that it’s done well. The other journalism is at these other sites. There is some hiring going on, but that’s around adding video resources — more around niche things some of the other sites don’t have. There’s no current plan to add to Fusion itself.

GMG Careers, the umbrella site where we post our job openings, there are more than 20 different jobs. Nothing particular to the Fusion brand itself, because the opportunity is to leverage the other journalism we’re doing, and Fusion has its strong core team in place, after the restructuring we did.

Wang: What is the relationship of these sites to Univision itself, to the newsroom, to the entertainment sector? Are you building television around the Gawker — sorry Gizmodo — sites?

Narisetti: Think of all these sites as the digital, non-linear television arm of Univision. They all sit under the Fusion Media Group and have strong relationships to Univision.com.

You can imagine journalistic shows coming out of these brands, traveling back into the Univision television world. There will be that kind of relationship.

And then there’s technology, legal, and finance resources — those used to be silos, and now those are integrated back with Univision. That’s the relationship now.

Univision is a strong Hispanic television company — that’s its core business. But when it comes to younger audiences, you can imagine a Jezebel show or a Jalopnik show traveling back to Univision and appealing to younger audiences. There’s more flowing back that way.

If we don’t leverage the very strong parent company, then we’re doing a disservice. Think of it this way. The BuzzFeeds, the Voxes, Vices of the world — they’re all trying to get into television by partnering with NBC and others. We have the advantage now of just having a strong TV company from the beginning. I absolutely want us to leverage that.

TV has a longer lead time, so you won’t see anything imminent. But over the course of this year, you’ll see us leverage some of the journalism we have onto television. No reason why we can’t think of having a Jalopnik show or a Lifehacker show. Lots of opportunities. Not all of them work as standalone shows, but some could be segments within an existing Univision show, or some could be a new show that starts and is aimed at younger Univision TV audiences.

Wang: Is there any rejiggering at all for these acquired sites? Are each of the Gizmodo sites getting new targets for traffic or revenue in any way?

Narisetti: Historically, none of these sites have been driven by traffic goals — it’s been more organic. I’m just not a big believer in having goals only around pageviews and unique visitors and so forth. But I’m a big believer in measuring it, for sure. If you’re putting journalistic resources to use, we out to be creating more engagement and driving more audiences to come every day. The goals are more business-side goals.

We have an ambitious plan to drive a 30 to 40 percent increase in revenue. To do that, we need to have more compelling journalism, and we need to be able to show us that our journalism is reaching a lot more people.

But none of these sites will have to go from X to Y — growth hasn’t been the problem for us, honestly. Even in the last year, given the challenges the sites had because of the Gawker case, they still all continued to grow their audiences. That has not been the fundamental challenge.

The beauty of these sites is that they are really about the culture of something. Gizmodo is not necessarily a traditional tech site; it’s also about the culture of tech. Kotaku is not a pure e-gaming site; it’s about the culture of e-gaming, too. That lets them do stories that are more interesting than if you were purely covering sports or cars or tech. That’s the philosophy, and because of that, we’re confident that someone coming to Fusion and reading a story about Jezebel would be interested in a story from Deadspin or from The Root, even if they didn’t necessarily come for that specific vertical. That’s the challenge: showcasing more of all of our stories.

Wang: What about growth on the e-commerce side? You set some pretty ambitious goals there as well. What are the steps you guys are taking to bulk up that business?

Narisetti:The last Black Friday, to make sure we could actually do it, we rolled out an e-commerce module on every single one of our sites, just to prove that Kinja Deals is something we can have on all our sites. The test went well from a technological point of view.

But remember, Kinja Deals is successful because it’s a reader service, and it’s providing content around commerce in the voice of these brands. You can’t just throw in a “Buy” button and expect it to work; you have to create some value for the reader. This year, we’ll make sure we’ll be trying this out on all our sites and organically building a commerce business.

We think this business can grow 30, 40 percent. A lot of these other big brands, including The New York Times which acquired The Wirecutter, want to get into it — we feel we have a strong position in this and want to do more.

Wang: What percentage of the group’s revenue do you expect will come from e-commerce versus advertising?

Narisetti: This year’s ambition is for close to a third of our revenues to come from commerce and bizdev, some partnerships. And we have a very strong native advertising, custom content-studio business — that’s the strength of the Onion portfolio. We want to leverage that across the rest of the portfolio. Think of it as around a third custom content and native advertising, a third around e-commerce, and a third around programmatic, display, and video advertising. Video will probably be the smallest piece of it, because other than Fusion and The Onion a little bit, the Gizmodo Media Group hasn’t really had a lot video yet.

Wang: Are there any fears or concerns on your end, or from the writers, given what happened to Gawker, and given the current Trump administration’s general hostility towards media that doesn’t write about them favorably?

Narisetti: Donald Trump is an opportunity, whether it’s for Jezebel, Fusion, The Root. There’s never been more of a need for the kind of journalism we practice. This is an opportunity to do more compelling journalism.

On the business side, clearly the pressures on advertising — particularly the pressures on display advertising, the pressures on programmatic — these will not recede. Advertisers have a lot more choices. Those pressures will be there.

Having multiple streams of revenue is the key, and we feel very good about the fact that we have a strong e-commerce business, a strong display and programmatic business, and a strong native advertising and custom content business. What we don’t have as a group is subscription, but that’s fine. Very few companies of our scale can say we have three different, strong sources of revenue. Most of our competitors are close to 90 percent reliant on advertising, have small studio businesses, and are just dipping their toes into e-commerce.

We have a good audience balance — 53 percent male and 47 percent female. 53 percent of our audience is high household income, 47 percent of the audience is millennials. In all those categories, we feel very comfortable compared to our peers.

A lot of our challenge will be simply execution. We want to be able to prove that all of our brands can stick together. There’s a big distinction in my mind between a house of brands, and a branded house. We’re a branded house, in the sense that there are a lot of synergies between our brand and our audience and the way we sell them.

Like any other digital businesses, there will always be headwinds, and we’ll always be tweaking and fine-tuning. But it’s very hard to fine-tune a network or a group of brands that are already as elaborated and authentic and irreverent as our collection. That’s our core strength.

POSTED     Feb. 6, 2017, 11:42 a.m.
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