For $107M RTL Group buys a majority of YouTube MCN StyleHaul

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For $107 million RTL Group has acquired a majority stake in fashion and makeup focused StyleHaul, a YouTube MCN, reports Re/code. As one of StyleHaul’s investors, RTL had been circling around the media outlet for months. The deal values StyleHaul at $151 million. It had been rumored several other large companies were looking at buying StyleHaul as well, including Amazon, Condé Nast Publications and 21st Century Fox. StyleHaul’s large audience of teenage girls and young women are a coveted demographic within the media and advertising industries.

 

To date, StyleHaul has raised $17 million in funding over three rounds. RTL has participated in two of those rounds. RTL is a large European broadcaster that has recently been making inroads into the American market, including buying a majority stake in SpotXchange, a Denver-based programmatic video advertising marketplace.

 

StyleHaul's content is focused around makeup tutorials and fashion advice. The multi-channel network is a large umbrella of 4,500 different channels, with content creators coming from 62 different countries. Combined the channels have 175 million subscribers and receive 60 million views per month. Having a large network of channels is not uncommon; it reflects the difficulty in predicting new YouTube stars. For example, Maker Studios, which sold to Disney earlier this year for $500 million, has over 1,000 different channels. 

 

The ability to communicate with an audience of teenage girls and young women is highly coveted by media and advertising companies because they believe early influence may allow them to shape attitudes towards brands and as viewers get older brands can direct audiences to other media properties. 

 

Though StyleHaul gets the bulk of its views from makeup and fashion how-to videos recently, the MCN has been moving into more highly produced content. In January, StyleHaul launched ‘The Crew,’ a fashion-focused talk show and has signed on television star Lisa Kudrow’s show  ‘Web Therapy,’ which puts prominent film and television actors through mock therapy sessions via a web camera.  

 

The fact that Kudrow, who is known for her role on 90’s television show ‘Friends,’ is moving into a web distributed video and YouTube MCN StyleHaul is choosing a classic television star is another example of the much discussed convergence of legacy media with digital media. Incumbent media brands know that YouTube-like videos have a unique audience and represent the future of media distribution, and YouTube MCN’s are looking to legacy media companies for more profitable revenue channels, so the arrangement makes sense.

 

However, despite moving towards each other, convergence is coming slowly. Web distributed content is the future — it is just not entirely clear how money can be made on the Internet. Television and film creators have been cautious not to open themselves up to the free distribution of their content like newspapers and music producers did. Rather, legacy media has been cautiously courting the best of YouTube with a series of investments.

 

RTL Group dated its way into the space by making small investments in StyleHaul. Now that it is more acquainted with StyleHaul, a full marriage seemed appropriate. As convergence between incumbent media and digital media continues, expect more wedding announcements.