Who should buy the Onion?
Bloomberg is reporting that the Onion, the greatest newspaper to ever publish fake stories (that's including the New York Times) is considering putting itself up for sale. In addition to the fake newspaper, which features winning headlines like the Election Day favorite "Black Man Given Nation's Worst Job," Onion Inc. operates the "real" (though often funny) pop culture site the AV Club and the brilliant parody of viral content farms Clickhole.
As for why the company is mulling a sale, it's not for lack of web traffic. According to the imperfect-though-largely-indicative-of-reality numbers at Quantcast, both the Onion.com and the AV Club have boosted their traffic over the past 12 months, while newcomer Clickhole has already surpassed the flagship site in terms of monthly unique visitors. In total, the Onion's network of sites pulls in nearly 30 million uniques a month.
Bloomberg theorizes that the sale has less to do with specific struggles and more to do with the fact that there's tons of cash moving from traditional media to web media -- and the Onion wants a piece of it:
Onion can use its brand to capitalize on money flowing into Web media from traditional outlets. Funny or Die, the comedy website co-founded by Will Ferrell, recently hired Moelis & Co. (MC) to advise on strategic options. In May, Walt Disney Co. paid $500 million for Maker Studios, while Vice Media Inc. raised $500 million in September selling 10 percent stakes to Technology Crossover Ventures and A+E Networks.So who would, could, and should buy up part or all of "America's Finest News Source"? Here are some ideas:
Unlike Disney and many other media conglomerates, Viacom, which owns Comedy Central, Nickelodeon, and MTV, hasn't made many marquee digital acquisitions. It recently sold off its digital game properties and yet, according to Deadline, it's quickly moving more and more of its ad inventory to digital platforms like Hulu and Sony's upcoming OTT service, as cable providers continue to drop the company's channels. An acquisition like the Onion, in addition to providing perfect cross-promotional marketing potential between Comedy Central, would be another feather in its digital cap.
That said, Comedy Central and the Onion have collaborated once before on the now-cancelled television series, "Onion SportsDome." Rather than asking the Onion to produce television shows, Viacom would be better off letting it do what it does best: produce digitally-native content.
Disney already reportedly tried to buy Buzzfeed but balked at the $1 billion price tag, according to Fortune's Erin Griffith. With a much smaller audience, I doubt the Onion would demand $1 billion -- though in this age of heady content company valuations, anything is possible -- and yet Disney would be getting a native advertising revenue engine that's as potentially powerful as Buzzfeed's. The Onion's revenue is up 30% thanks to sponsored videos and posts on both its flagship site and Clickhole. As an advertiser, Clickhole poses a unique native advertising opportunity -- a chance to show that the brand, by advertising on Clickhole as opposed to the site it's lampooning, Buzzfeed, is in on the joke.
Of course, as Griffith noted at the time, sites like Buzzfeed and the Onion aren't as good a strategic fit as, say, Maker Studios: "Disney focuses on acquiring and aggregating intellectual property, which it can monetize through many channels like licensing, merchandising, TV, games, animation, and theme parks." Nevertheless, if Disney can pick up the Onion at a bargain, and when the sites' revenues are only poised to grow, it might be worth the cash.
Okay, this one actually doesn't make that much sense, but imagine the soul-destroying irony of Buzzfeed buying, and thus profiting from, the site that launches the most brutal attacks on it? If you can't beat them, join them. Also can you think of a more Onion-esque headline than "Buzzfeed buys Clickhole"?
You know, it's possible that there's just not as much money in content as investors thought. Just look at Say Media which is now looking to jettison its content offerings. Others in the industry have theorize that the native advertising boom is about to plateau. As entertaining and respected as the Onion's sites are, as a business proposition, it may not be so sure a bet. If the Onion wants to sell, I'm sure it can find a buyer. But the chances of it finding a high-profile buyer that will significantly increase its exposure through television cross-promotion or licensing is hardly a given.
[illustration by Brad Jonas]