Digital Media’s Future Lies Beyond Ads and With Direct Consumer Revenue

Owners are no longer willing to fund these unprofitable outfits

Illustration of a person on his laptop and a person on his phone both surrounded by charts, graphs, and data
Owners have shown a new unwillingness to fund unprofitable digital media companies in perpetuity. Getty Images

The long-predicted digital media consolidation has finally come to pass. More than 100 online publishing companies are on pace to be sold this year, highlighted by the recent purchases of Refinery29, PopSugar and New York Magazine. The impetus for the sudden deal velocity is the direct result of a newfound profit imperative. The optimistic period when digital media companies successfully raised millions of dollars in venture capital funding with the promise of delivering billion-dollar valuations has given way to shrunken ambitions and a focus on the bottom line.

@joshjaffe Josh Jaffe is general manager of Inc.