With the attention of 85 million men per month, Woven is quietly building the next digital media giant
Don’t look now, but content is sexy again. After nearly a decade of being discounted by investors and entrepreneurs as a dying category, digital media companies are finally proving there are real businesses to be built online. For evidence of this fact, take three very different but highly successful deals: Buzzfeed’s fresh $50 million round at an $850 million valuation led by Andreessen Horowitz, Disney’s $900 million acquisition of Maker Studio, and Vice’s $1.4 billion valuation on the back of a 21st Century Fox investment.
But it’s not just these well known new media giants that are proving content is good business. Close on their heels is a new generation of upstarts reaching highly targeted vertical audiences.
One lesser known company that’s worth keeping an eye on is LA’s Woven, an under-the-radar network of websites featuring original and branded content. The four-year-old company has quietly built a massive online audience of 18- to 34-year-old males and has aspirations to be the next Viacom in today’s digital-first world, according to co-founders Scott Grimes and Michael Laur.
Just four months ago in April, Woven bolstered its executive team with the addition of MySpace and SGN co-founder Colin Digiaro as President and later added award winning director/producer Ben Blank in June as Chief Creative Officer. This week, the company made another key hire, adding Matthew Polesetsky in the newly created role of General Counsel. Polesetsky was previously EVP and General Counsel at Demand Media and before that General Counsel at MySpace. This hire, like Digiaro and Blank’s earlier, signals that Woven is indeed growing up and sees a future that involves more complicated content creation, licensing, and distribution challenges.
So how big is Woven’s audience and why haven’t more people heard of the company?
The answer to the first questions is sure to surprise, especially in light of the latter. Woven today attracts 85 million monthly unique users and an average of 4.6 million on a daily basis – a number that makes it larger in terms of reach than most primetime TV shows. Moreover, Woven reaches 46 percent of its target 18- to 34-year-old male demo each month, meaning that if you know two millennial males, it’s almost certain that one of them viewed a piece of Woven content last month. The only entertainment properties to reach more young men each month are YouTube, CBS Interactive, and Pandora, according to ComScore.
The reason Woven is so under the radar has to do with the way the company has constructed its brand portfolio. Unlike similar digital media conglomerates like Gawker or Vox, which heavily associate their parent brands subsidiary sites (e.g. Gawker’s Deadspin, Jezebel, and Jalopnik, or Vox’s Verge, SB Nation, and Polygon), Woven takes the opposite approach. The result is that while individual domains like UPROXX and BroBible continue to amass audience and brand awareness among consumers, Woven does not. But make no mistake about it, advertisers and content creators looking to reach the male demo are well aware of the Woven platform.
That said, Woven doesn’t own all of its properties. Five, including UPROXX, BroBible, Animal, Brotips, and Guyism are wholly-owned. But others, like theChive, NiceKicks, DatPiff, and Dime Magazine, are affiliated through partnerships. The company has been acquisitive in the past, and may look to do select deals in the future to bolster its reach in particular verticals, according to Digiaro, but the days of M&A being a primary driver of growth are largely past.
“I look at it as being very similar to the way TV networks view syndication,” Digiaro says. “But we’re focused first and foremost on creating and distributing original content.”
One example of this initiative is the company's collaboration with Paramount and Hip Hop legend Russel Simmons in the development of a movie around the popular hip hop destination WorldStarHipHop.com. It’s a unique example of taking a widely popular digital brand and creating a narrative around it for a movie.
Woven has grown revenue by triple digits each year since 2010, Digiaro says, describing the bottom line as “wildly profitable.” The company has produced more than 65 million views of its branded content in 2014 alone, and works with premium brand advertisers including Boost Mobile, EA, Miller/Coors, Sony Pictures, FX, Comedy Central, AT&T, Anheuser Busch, Motorola, and Bacardi. While Digiaro declined to share specific financial data, he indicates that he expects Woven to reach a $100 million revenue run rate by the end of 2015. What that means for the company’s end-game, in other words whether Woven becomes an acquisition target for a more established media brand or continues on an independent growth path, remains to be seen.
“I have always approached businesses from philosophy of creating solid top line growth and bottom line growth, with the mentality that if you do that, then opportunities will present themselves,” Digiaro says. “I feel like companies get in trouble when they focus more on building a big story and not on building a solid business,.
Woven has raised just $4.5 million in funding to date, primarily from angel investors, including former Facebook CPO Chris Kelly and PA Semi and Sibyte co-founder Leo Joseph. But while this limited cash position has hardly held the company back thus far, Digiaro reveals plans to raise a large institutional round in the near future with the goal of accelerating its content production and acquisition roadmap.
“We have finally started to see clear path for where we're heading, and that is basically multi-platform content creation and distribution,” Digiaro says. “The inherent complexity involved with each platform [Facebook, Twitter, YouTube, Web, and Mobile] and with working with creators and dealing with production guilds, dictates our plans to raise additional capital and also our need for in-house counsel. Now is the right time to be making both moves.”
Expect Polesetsky to play a major role in Woven executing this growth plan, Digiaro says. This will include developing everything from content acquisition and distribution agreements, consumer-facing user agreements and privacy statements, and internal HR, corporate governance, and financing policies. Having worked at both MySpace and Demand Media across multiple stages in their lifecycle, including high-growth startup, acquisition by a major media conglomerate, and IPO, Polesetsky should have a solid command over the issues that will confront Woven today and well into the future.
“As woven has matured we've really focused on building out our executive team,” Digiaro says. “Matt’s really strategic and one of the reasons I’m really excited about working with him again is that he can help us think through a lot of these bigger business issues. He won’t just be confined to narrow legal issues.”
Like in the fashion category, where male consumers are getting more attention than ever before, content creators are building big businesses delivering pop culture to the less fair sex. The era of female-focused glossy magazines is over. Welcome to today’s viral video and internet meme reality. And in this world, if you want to reach young males, there are few better partners than Woven.