KKR invests $50M in magazine JV

The Deal
By Staff
December 3, 2014


Private equity firm Kohlberg Kravis Roberts & Co. (KKR) is investing $50 million in magazine joint venture Next Issue Media LLC, the parties said Wednesday, Dec. 3.

The JV with Advance Publications Inc.’s Condé Nast, Hearst Corp.’s Hearst Magazines, Meredith Corp. (MDP), News Corp. (NWS), Rogers Communications Inc. and Time Inc. (TIME) provides magazine articles on a model akin to Netflix Inc.’s movie offering or Spotify Ltd.’s music streaming service.

Subscribers can read articles from 145 different magazines such as Vogue, Esquare and Good Housekeeping on smart phones and tablets for $9.99 per month. The premium service, which include People, Time, The New Yorker and others, costs $14.99.

Wells Fargo Securities LLC analyst Eric Katz noted in a Wednesday report that digital publishing has must lower costs.

“While we aren’t quite sure if the digital subs will meaningfully cannibalize print subs in the nearterm, we do think this could provide a nice incremental, high margin revenue stream from millennials (as well as older generations) who don’t have print subscriptions but would prefer the ‘all-you-can-eat’ digital model that has become so mainstream (i.e. NFLX, Spotify, etc.),” Katz wrote.

Raine Group LLC advised Next Issue Media. — Chris Nolter