Jim Bankoff, chairman and chief executive officer of Vox Media, isn’t exactly a typical start-up ceo. For one, he has been in the media business since the early days of the Web — think Netscape — and he worked as an executive at AOL when they were the only game in town (Remember dial-up?).
He rose from president of AOL Web properties in 2002 to executive vice president of programming and products until 2007. Two years later, he founded Vox Media, which includes a variety of sites that have distinct Web addresses, staffs and coverage areas, as well as a native advertising unit. Sites include The Verge (technology), Eater (food), Racked (fashion), Curbed (real estate), SB Nation (sports), Polygon (gaming) and Vox (news and politics). This sets Vox apart from rivals such as Vice Media and Buzzfeed, which have verticals through their portal sites. Buzzfeed is still king of the trio in terms of traffic, ComScore said. In August, Buzzfeed lured 85 million unique views, while Vox Media nabbed 58.1 million and Vice pulled 49.2 million.
From Vox’s New York office, Bankoff, 46, (who looks much younger in person than in his corporate headshot), talked about Comcast’s recent $200 million investment in his company, which is now valued at a hefty $1 billion, what the future of TV will look like and whether we’re living in a digital media bubble.
Valuations are very high now for media companies like Buzzfeed, Vox and Vice. Are we in a bubble?
I honestly don’t focus too much on valuations. But there’s a lot of disruption going on — not only in the media — in all industries. Technology is coming in and changing the way things get done. What you see in valuations is the market valuing the potential for the companies that are using technology to create change. Stepping aside from media for a minute, you see that with Uber, you see that with WeWork. There are companies that are using technology to change things.
They’re the ones that are generally getting the higher multiples because there’s a bet that things will change over time and so media is experiencing that too. We are clearly seeing some big shifts in the way that people consume things. Bets are being made on companies that the market thinks have potential to be among the future leaders.
Are the valuations based more on the promise of a company than its financial picture?
These are sophisticated investors. When we talk [about] the bubble of the dot-com boom, which I lived through, a lot of it was driven by day traders that didn’t have too much sophistication and got caught up in it. I don’t see that happening today. It’s not to say that things might go up or go down but it’s a different kind of thing. There are companies that the investors are looking to understand. They are smart and do their diligence and they place their bets. I think they are investing in real business models. In our case, we’re profitable and we’re growing. This is not the Pets.com era.
When did you reach profitability?
Last year, in 2014.
You just acquired Re/Code. Are you looking to make more acquisitions?
We’re not necessarily a company that grows by acquisition. We consider acting when there’s a great opportunity. Both with Re/Code and Curbed, which was our other sizable acquisition, they both fit really well with our strategy and with our culture, and with where we wanted to go forward — you know, talent-based new media brands that could benefit from our technology, our platform, our sales infrastructure. Re/Code brings another dimension, which is the conference business. It’s a little bit more of a C-suite audience, too. That’s new for us. We’re influential but we’re influential on a consumer base as opposed to a business base. I think that will be a good dimension that they bring.
How will you use the NBC investment? What are your thoughts on cable companies investing in digital media companies?
We kind of have had a relationship with Comcast Ventures for a while. We’ve known a lot of the NBC people for quite some time — even for some of us, like me, dating back before I was even in this job. I had relationships, but since I’ve been here, we’ve had some small partnerships. In addition to the investment, we plan on having collaborations across a variety of different areas that are still being defined, so I don’t even have a specific to point to. One general area, however, is around programming and finding opportunities to make video programming together that would run across our platform, their platforms.
Would that video be for the Web, not for TV?
We’re not limited to purely digital distribution but that’s what the future is, so we’ll definitely focus on that. But they reach tens of millions of people across the categories that we operate in, whether it’s sports, where there’s great complementary material between NBC Sports and our SB Nation…
You get greater reach and for them, it’s digital reach, correct?
Yeah. Our skills and our reach are complementary. We overlap well in our topic areas — sports, news, lifestyle. Re/Code and CNBC already have a partnership, you’ve probably seen Ezra Klein [Vox editor in chief] on MSNBC, and NBC Sports has SB Nation — so there’s already a lot of organic, natural ways to work together. If you look at our assets — we do digital really well, they do video and scale really well, our audiences tend to be younger, their audiences tend to be a little older. What we have is complementary. We can learn from one another, but we can find ways to grow together. We can expose our content and brands to new audiences and they can do the same thing via us. Generally speaking that’s what we’ll seek to do, whether it’s in the content space or in the advertising space.
When you look at the Verizon/AOL deal or Fusion and Univision/Disney — is this a model we can expect going forward for networks?
I think so. You’re seeing more of it because you’re seeing enlightened companies on both sides that are saying: “Hey, there’s higher growth going on elsewhere.” It may be negative growth or it may be flat, but [incumbent companies] are saying: “How do we continue to grow in the future and what are the combinations that are going to make that work?”
Not all of the deals are successful. How will yours differ?
In terms of what’s going to make it successful — I think it’s respect for culture and respect for not trying to interfere, retrofit an older model onto a new one. I was — for better or worse — a child of the first merger of AOL/ Time Warner. [Laughs.] There were a lot of horrible things, but a few great things, too. I think in our case, the structure that we have — NBC Universal is investing but they don’t have control to determine our destiny — we maintain our independence. In fact, our independence is strengthened because of the commercial partnership that we’re entering. That’s a great way to impact one another, learn from one another. But there are other ways of doing it.
You’ve said you want Vox to do for digital media what Condé Nast did for magazine publishing. How do you view Vox compared to Condé and rivals Hearst and Time Inc.?
I don’t want to be compared to anything, but one thing that we do have in common is that we operate in multiple content categories with multiple brand names. In the new media space, you’ve seen the rise of companies like The Huffington Post, Buzzfeed, Vice or Mashable or whatever, and one key difference is that we’re the only company that has proven that we can successfully grow multiple brands in multiple categories and do so with a common platform. All of our brands have a unique identity. This is not like portal.com/sports. It’s hard to do it in the other direction. It’s harder to start as one brand and splinter off; it’s harder to change perception and authority.
Gawker Media has multiple brands but some have floundered, and overall, the company has struggled with its identity as of late. Why?
I try not to comment on other companies, but I’ll say this: I have tremendous respect for Nick [Denton, Gawker founder and ceo] and what he has built. Frankly, he’s been an inspiration to me. I met him in my AOL days and I really admired what he was building. I will leave it at that. Gawker is Nick and he knows what to do with that company.
Why can’t traditional media companies transition easier to the digital landscape?
There are smart people running these businesses. Ten years ago you could have said, “These people have their heads in the sand” and maybe they did. It’s far from that now. But the question is, even if they are very aware, how much can they do about it? For instance, if you have all this cash flow coming from one source that is not growing, you may have to jeopardize that cash source by embracing a new model — how willing are you to do that? If you have a culture and a workflow that is built up on one model and you have to jeopardize that culture and workflow — how willing are you to do that? It’s about real, structural trade-offs that have to be made. It might actually be a bad decision to make some of those trade-offs.
Some magazine brands have trouble finding a voice on the Web and fall into the trap of mimicking the tone of viral sites. How do they forge a unique Web identity?
I talk about these structural issues — and brand is one of them — which you’re getting at, and you’re right. One of the nice things about our brands is…they have permission to program to audiences wherever their audiences are. It’s a generational thing. Some of the older brands — just because they’ve had storied pasts and have made an indelible impression in the consumers’ mind, it might be harder to travel into new places. Not impossible. The smart minds will be able to figure out how elastic the brands can be. You do have some advantages. You have recognition.
What industries outside of media do you look to for inspiration?
I get inspiration from companies that have had to reinvent themselves and do things rapidly. What sets this industry apart is that the pace of change is just so rapid. I try to look at companies that try to set up cultures that are optimized to succeed for a rapid pace of change. We try to create an organization that embraces and thrives on change. We aren’t perfect at it, but that’s what we are aiming for.
Was this a takeaway from being at AOL?
It was a takeaway. I probably learned more from the bad parts than the good parts. There were a lot of great leaders at AOL but there were some structural things that ultimately led to it not being as great a company — specifically not embracing change and setting up an environment where there isn’t an expectation that the old way of doing things is going to lead to success. What AOL created was a phenomenon. But you can see how quickly what was going on there became outdated and new companies started to nip away at it and succeed where AOL didn’t. You can see it with media brands that were launched just 10 years ago and may not have innovated at the pace necessary to be on top of the game.
With so much investor money in new media, will there be a point where some of these firms will be forced to go public?
I don’t think so. I don’t know. We have obligations to provide financial returns to our investors and to create opportunities for our employees or else they won’t want to work here any longer. An initial public offering is one route to do that, but we’ve been out there for seven or eight years and have found a way to satisfy all those conditions.