VerSe Innovation, the parent firm of Bangalore-based Indian content and news aggregator Dailyhunt has acquired New York-based digital magazine store Magzter. The financials of the deal are undisclosed, but according to a statement from cofounder Umang Bedi, the deal is a cash-and-stock transaction. The acquisition results in Dailyhunt’s entry into the premium content market, as Magzter holds a vast library of over 8,500 premium magazines and newspapers.
Founded in 2011, Magzer is a cross-platform, self-service, global digital newsstand. Aside from Heart Media titles, Magzter maintains partnerships with thousands of other large publishers and offers titles such as American Vogue, Vanity Fair The New Yorker, The Economist, and Time and boasts a global active user base of 87 million. A large portion of the media industry relies on Magzer — from brand PR teams keeping track of their media coverage and press clippings to magazine journalists eyeing up their competitors. During the stay-at-home order brought on during the COVID-19 pandemic, Magzer was one of the main platforms for how readers got their hands on their favourite magazines when newsstands and stores were closed. This was also a time when the status of print media was called into question, something we will address later.
So why does VerSe want to make the leap into the premium content market? As the large parent company VerSe oversees several digital content platforms including Dailyhunt, Josh, RedRobot and Parentune. What these companies have in common are their distribution of digital content from news articles to short and AI-driven content. Acquiring Magzer allows VerSe to diversify its portfolio and content beyond news and short video content to include luxury magazines and media. This also opens the door for VerSe to gain a wider audience reach and potentially cross-promote its media on other content platforms. When it comes to long-term profit margins, acquiring Magzter could provide VerSe with new forms of revenue and monetisation opportunities through subscription fees or via magazine advertising. However, this could easily be attributed to the rise of paywalls and subscription models, making it harder for individuals of all incomes to consume digital media but perhaps that is a different topic for another day.
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From a macro perspective, when it comes to global expansion, the move allows VerSe to have a foothold in new regions and markets, establishing a presence and acquiring market knowledge in these regions, like America, where Magzter was founded. Next, VerSe is a company that understands the value of data, particularly with their investments in AI technology. Magzter would have arguably gathered a database of engagement patterns, reader preferences, and other valuable insights related to magazine content consumption. Acquiring Magzter could provide VerSe with access to this data, enabling a better understanding of user behavior and preferences across different types of content from fashion to sport to interiors and various lifestyle titles.
Vertical integration is the next step as VerSe would now own content creation platforms like Dailyhunt and Josh, and digital content distribution sites like Magzter, potentially streamlining operations and reducing costs associated with content licensing and distribution. One could argue that Magzter would have a relationship with publishing houses (like Vogue’s Condé Nast and Harper’s BAZAAR’s Hearst) and exclusive rights to certain digital magazine titles, thus VerSe now has access to a new blackbook of contacts in publishing and potentially a plethora of valuable intellectual property rights. This opens up VerSe’s opportunity for future partnerships.
Ultimately, acquiring Magzter will strengthen VerSe’s position in the digital content market by adding another dimension to its portfolio and fulfilling the demand for high-quality premium content for Dailyhunt subscribers. It could also help VerSe stay competitive with other digital content providers by offering an all-encompassing range of content options. On another note, when it comes to the question of the stability of the digital media industry, this acquisition may show just how valuable magazines can still be.
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