Time Inc is gunning its engine for digital video. The magazine publisher’s share price jumped 7% today as it announced a deal to buy two prominent auto-related YouTube channels: /Drive and Fast Lane Daily.
The company, which Time Warner spun off in mid 2014, didn’t disclose financial terms. But it accelerates CEO Joseph Ripp’s effort to diversify the publisher of magazines including Time, Sports Illustrated, Entertainment Weekly, People, and Fortune with faster growing digital businesses.
The auto channels will become part of The Foundry, Time’s content and creative collective. In September it launched an auto-culture site, The Drive. Sometime during this quarter it will debut a showroom content studio located on the first floor of Time’s new headquarters in Brooklyn.
Time says it wants to create “a powerhouse video-rich production network of short- and long-form premium storytelling around car culture and lifestyle.” The operations will look for opportunities to distribute their handiwork “across the network, as well as through linear, OTT, SVOD, mobile, digital and emerging platforms.”
/Drive has more than 1.6 million YouTube subscribers. Since 2014 it has produced /Drive on NBC Sports, which features road trips around the globe. The operation’s founder, JF Musial, and colleagues including Michael Spinelli, Alex Roy, and Matt Farah will be “key contributors to the programming slate,” Time says.
Fast Lane Daily, with more than 300,000 subscribers, offers auto-related newscasts on weekdays.
Editorial Innovation SVP Matt Bean, who will oversee the auto-focused units, calls video “the most visceral tool for bringing cars to life.”youtube
/Drive’s Musial says he and his group “were the new kids playing with video” and “needed a partner like Time Inc. with experience and a sense of adventure.”
Time has struggled to persuade Wall Street that it can successfully grow beyond its magazines. The company’s shares lost more than 46% of their value over the last 12 months.
CEO Ripp told analysts last week that this is “a very important year for Time Inc. to transition into a growth business” — requiring him to spend to launch new ventures and invest in existing ones.
And video is a top priority. “Time Inc. brands translate very well into sight, sound and motion,” he says. “With TV audiences fragmenting and rapidly declining, we believe the TV ecosystem has broken wide open and we are already participating in this disruption as advertisers shift dollars into digital video and OTT offerings.”