New media mogul Ben Lerer is beefing up the finance and business side of Group Nine Media — the holding company he created in October that tied together NowThis, Thrillist, The Dodo, and Seeker — with a $US100 million investment from Discovery.
The idea behind Group Nine was simple: consolidation worked in TV, and it would work again in digital video.
“Brands and agencies want fewer points of contact,” Lerer told Business Insider. “The idea that you can talk to one company and just do more is something that really works. It worked in the TV business.”
This thesis got some more ammunition from The Information last week, which reported that brands are looking for larger digital media deals, in a way that favours bigger publications over smaller ones.
“We’ve been hearing that for a long time,” Lerer said. “Fewer, bigger partners.”
In moving toward the goal of having Group Nine be one of those few big partners, on Monday the company announced two key hires: new CFO Judd Merkel, formerly the CFO of Droga5, and new Head of Global Business Development Miguel Burger-Calderon, formerly the president of Elite Daily.
Lerer pointed to Merkel particularly as instrumental in helping Group Nine develop into a disciplined and sustainable business.
“While we aren’t in the exact same business [as agency Droga5], there are a lot of similarities and common ground from his experience,” Lerer said. “There is a certain [financial] discipline in running agencies. Agencies grow profitably. That’s a common trait between almost every great agency … A lot of discipline around margin management.”
Lerer said he wants to make sure that what Group Nine is building will endure, and isn’t just a flash in the pan.
So far Lerer said the plan for integrating the four brands hasn’t changed fundamentally since October.
“What we thought this was going to look like is what it’s going to look like,” he said. And he said that the integration of the tech platforms of the different Group Nine companies would be completed soon. “The data [will be] living in one place really shortly.”
That doesn’t mean that creating Group Nine has been easy, however.
“There have been tons of growing pains,” Lerer said. “It is really hard to take four cultures and then have those four cultures live together, and create a fifth culture, Group Nine, and do it when you are sprinting to put the business together, to centralize as quickly as we can.”
One painful moment was layoffs last month at Lerer-founded Thrillist, which cut over 20 staffers. Lerer characterised the layoffs as part of a change in direction of Thrillist itself, and not as part of the combination with other Group Nine brands.
“When we went and built video the first time, we did some stuff wrong,” he said. “We made some mistakes I’m responsible for, other people in management [too]. We had to fix those things to grow at the speed we should … In the race for digital scale, brands can lose themselves. They’re a tech site that starts writing about politics because that’s where eyeballs are. I don’t think we were horribly guilty of that, but we extended coverage into a few areas that weren’t core to the mission of Thrillist.”
Thrillist employees have also recently criticised management for being slow to respond to unionization efforts. Lerer didn’t comment on the record about the situation, but pointed Business Insider to this statement from Thrillist president Adam Rich:
“The union has asked to be recognised without a vote; however, we want to ensure that all employees have the opportunity to participate in making this choice. Ultimately this is the decision of our employees: we celebrate their right to exercise their personal power of choice, and will support their decision.”
The other side
With the integration of the Group Nine brands nearly complete on the technical side, Lerer is looked toward developing new forms of content across the brands.
One particular area of focus is in creating premium video that can make the jump between digital and traditional TV. That’s a big reason Discovery invested the $US100 million in October.
“There’s a lot of work going on in super premium original ,” Lerer said. “You’re going to see lots more of that across all Group Nine brands.” The discussions with traditional TV companies Lerer was talking about in October will soon start bearing fruit, he said.
In all, Lerer described the Group Nine integration since October as like swimming across a fast-moving and rocky river. In October they had all just jumped in, and now, Lerer said he can feel that the other side is coming.
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