Vox Media's Jim Bankoff Explains Why He's Selling to James Murdoch

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1:44Peter Kafka:From the Vox Media Podcast Network, literally at the Vox Media Podcast Network with the CEO of the company that owns the Vox Media Podcast Network. This is Channels with Peter Kafka. That's me. I'm talking to Jim Bankoff, the CEO of Vox Media. Hi, Jim. Hi, Peter. You're in the news today. Thanks for coming by. Yeah, well, thank you for coming by. But it's so great to be in our studios and doing an interview here. I think this might be the first, or maybe the only other one I did was with you, or perhaps. I don't even remember. I've done a couple of these with you. Before we start, I have a ton of disclosures here.

2:18Peter Kafka:I worked for you for eight years at Vox Media. For the last two years, I've been recording my podcast with the Vox Media Podcast Network, again, which we just talked about. On top of all that, I like you personally. I think you are a good human being as well as a good boss. So let's just get all of that out of there. I like that last disclosure. And I will second that emotion. You're my only media stop today, Peter. And maybe my only one period. And this is certainly my only podcast for now. So, it's great to be here. Now the love fest is over. Yes. I saw the press release you put out about the deal, just to set it up.

2:55Peter Kafka:I can't imagine anyone's listening to this who doesn't know what it is. You are selling the Vox Media Podcast Network, New York Magazine, and Vox.com to James Murdoch's holding company, Lupa Systems, I think it's called. Correct, correct. So, why is this a good deal for Vox, its shareholders, and then the other company that you're not selling, which is a collection of websites, including Eater, The Verge, PopSugar, etc. Yeah, absolutely. You're right. We're excited to be, essentially, splitting the company into two. Until close, which usually takes about six weeks, I'll be the CEO of the combined company, as I am today.

3:32After that, I'll be CEO of the Lupa Systems company. and Ryan Pauly will be the senior leader of the other part of the company, which will be named. It's exciting, and it's great. I just happened to read the New York Times article. I think I was quoted as saying, as someone who has been here since the beginning, who takes accountability for the architecture and the journey, I'm so excited for both parts of the company, because I think it allows them to reach their full potential. It allows the employees to, it allows the brands to, it allows us to do great things for our business partners, our advertisers, etc.

4:13One side of the company is focused on what I'll generally call in media jargon, since this is a media podcast, talent-based platforms, and multimedia, multivisual, also with more of a subscription bias. So, the Vox Media Podcast Network, a talent platform. New York Magazine itself, a different kind of talent platform, talented journalists, but also increasingly expressing itself multimedia, but importantly, with a subscription business that really propels it forward. And then Vox is multimedia from the outset, as well as, and by the way, you used to work at Vox after Recode. So, those businesses naturally go together.

4:52They have growth characteristics that make sense to go together. They also have multimedia characteristics that make sense to go together. The other businesses also have multimedia and also have growth, but they're more similar. There was a time five-plus years ago where bringing everything together, getting a whole lot of scale made sense. And as it tends to do, media changed a lot. The internet changed a lot. Technology changed a lot. That's what happens in our industry. And so what made sense for us to come together five-plus years ago now makes sense for us to get focused.

5:27Peter Kafka:So, that'll make sense, I guess, if you don't look under the hood. But I didn't report on this because it would be weird for me to report on a company I'm working at. But I ended up talking to a lot of people about it anyway. And it seems like what was happening under the hood was you guys took the podcast network out. And I guess you're saying you were approached by buyers. You definitely brought it out, offered to other folks. There were a bunch of people who were interested in the podcast network. Again, the thing I'm recording this on. And then you, at some point, added New York Magazine and Vox.com to that.

6:00Peter Kafka:But most of the other buyers only wanted the podcast network. And it doesn't seem like anybody was dying to buy the other sites. So, what is that? First of all, is that right? No. Well, not exactly. Some of it is right. Some of it isn't. It's true. We were approached from the outside about, originally, the podcast network. And, by the way, with regard to Vox, we'd always kind of contemplated that Vox was part of that. because Vox, so much of what Vox does is, by the way, for those listening, there's Vox Media and then there's Vox, but so much of what Vox does is podcasts and video. Today Explained is a very, very, very popular podcast.

6:33And it's not just Today Explained.

6:35Peter Kafka:But that's the primary driver, and that's a top 10 podcast. It's a top 10 podcast, but there's some other big ones in there, and there's also a massive YouTube channel. And so, I think the majority of its revenue comes from things other than what I'll call tech space, although it has a great tech space program too, of course. So, that has always been contemplated as part of it. But yes, we got some outside interest. We didn't take it too seriously at first. But then we thought to ourselves, this is a different kind of business, a growth business, and maybe it should have, in business speak, its own capital structure, its own ownership structure.

7:04Maybe we should think about that, and maybe it makes sense. And we did.

7:11The fact that New York Magazine came along was a little bit more based on, initially, their idea. James Murdoch's idea. Yes. We walked through the logic of it, and it made particular sense for the kind of company they're creating. I think it makes a lot of sense as we think about it together. We got our heads around it, and the process moved quickly at that point, and here we are today. I will say that the part that wasn't exactly accurate is, I think there's interest in literally every single part of the business, But we're not looking just to break things up for the sake of breaking things up.

7:50We're looking to be successful and create the right culture and the right environment for success. And so we don't expect to break things up beyond what we did today.

8:01Peter Kafka:I guess what I was trying to get to is it seems like the thing at least media buyers were most interested in was the podcast network. And I'm wondering why you think that appeals to them more than other properties. Well, I'll question the premise. Certain types of investors were. But having said that, I'll go along with the question. I talked to one of them, the CEO of Verson, at this table last week. He said, the thing I wanted was the podcast network, not the other stuff. Yeah, but then you're generalizing his content. No, then I've talked to others. But it doesn't matter, because I grant you that it's an exciting property.

8:34And there are some obvious reasons, for those of your listeners who understand this stuff well. First of all, it's an extraordinarily high-growth property, which makes it attractive, upwards of 40 % per year for quite some time. And what's driving that?

8:46Peter Kafka:Audio? Video? All of the above. Another thing that's driving it, it taps into what we call the creator economy. Vox Media Podcast Network approaches it in a certain way, though, which I think is about as premium, as thoughtful as you can get. So, there's a lot of great approaches. Some focus on a given category, sports, comedy, etc. etc., what we tend to focus on are the best at what they do, whether it's Brene Brown and Adam Grant, or Kara and Scott, or Today Explain. We go out, I should say criminal, I should say cafe with Preet. I can go on and I don't want to leave anyone else, but I have to because there are dozens of them.

9:27But what they all tend to have in common is they are thoughtful and they are smart. They could be funny, they could be analytical, they all have their own approach. but it's a highly curated network that still has scale. Number six on PodTrack, which is the ranking system for these things. So we're not after scale for scale's sake, but we are after quality scale, and that's what we've achieved, and I think that's part of what made it so interesting to people.

9:50Peter Kafka:And it's also a network where, in my case, and I think for many of you, many of you talent, they're not your employees. You sort of have a vendor-vendee relationship, and is that part of the appeal as well? It's about split. I don't even know the exact split. But, as you pointed out today, explain Top Ten is produced internally. And then, yes, we have great partners as well. But, is the idea that this is a talent business, you guys have relationships with talent, but don't have to pay the overhead of keeping them employed full-time, you don't have to deal with their health insurance, etc.? Yeah, I don't really view it that way.

10:27We may not pay their health insurance, but we, in some cases, pay them millions of dollars. because they...

10:32Peter Kafka:It's not free. I'm just saying it's a different profile than employing people. It's a different economic... Here's how I like to think about it. It's like we're open to different economic relationships. I mean, since we're fully disclosing, we have one with you. And depending on what makes sense for the creator and what makes sense for our business, we come to an understanding on that. And different people have different needs, et cetera. So we try to accommodate that where it makes sense for our business to do so. You talked about being here from the beginning and sort of putting this architecture together.

11:02Peter Kafka:So let's go back. When you bought the company I was working at in 2015, the character switcher and Walt Mossberg's, all things, no, it was called Recode back then. You bought it then. And at the time, you were building this house of brands, and the idea was we're going to have lots and lots of different verticals. They're all knitted together. And really sort of the main idea was we can take this, we'll have more scale, and we'll use that scale to work with, at the time, partners, primarily Facebook, but all the platforms. When I started, I think you guys were all excited about making original video for Snapchat.

11:36Peter Kafka:And I was really depressed. I'm like, I can't make video for Snapchat. What am I going to do? Obviously, things have changed. I'm wondering, as you look back and see sort of how you built the company, are there things you go, oh, I really wish we wouldn't have done that? Or do you say, no, I understood why we did that. It made sense at the time. And that was just the evolution. Yeah, I think both. With all humility, we've gone in wrong directions on many occasions. Thankfully, we've gone in right directions on more occasions, and that's why we've been successful. I'm proud of what we've done. Very proud.

12:10For me, it's been close to two decades. I started off as CEO of SB Nation, which I'm still extraordinarily proud of SB Nation. In the changing environment, it's killing it right now. But media changes and media evolves. I'm proud to say that in the past 20 years, we're really, I would say, maybe the only media company that I can think of, at least, that has, from the ground up, built category-leading brands. SB Nation, I just mentioned. The Verge. Vox. And then, of course, the Vox Media Podcast Network. All from whole cloud. All from scratch. Most people are lucky to do it once. We did it at least four times.

12:49We wound up having to sell Polygon, but I'd put that on the list as well, too. We built things that are enduring and leaders. Then we also acquired things. When we acquired things, I think we did very well with most of them. For instance, Eater, which already had started out and other people started it. But we were able to take it and grow it and expand it to what it is today. It was an elite but small site. And now it's big, and it's really the leader in its category. But whether it's Eater, whether it is, most notably, I suppose, on the acquisition front, New York Magazine. New York Magazine is older than me.

13:29I was saying something. It's been around for, I guess, 58 years. And it had its own culture. David Haskell and Pam Walserstein really are the life force business and editorial of making that place so successful. But I think we created the right conditions for it to continue to grow, to build an amazing subscriber business that is upwards of 400 ,000 subscribers, growing at over 20 % a year on the subscription front. Most importantly, its quality is getting better and better. Today, what I'm here to celebrate is not this transaction. What I'm here to celebrate is winning two major ASMEs, that's our magazine awards, including General Excellence.

14:13Those are the Oscars of magazines. And the New York Magazine team, led by David Haskell, won the Best Picture equivalent, which is the General Excellence Award. And I bring that up because that's, for me, what it's about, that and running a good business. And I'm so proud that we have been stewards of that asset and the rest to get us to the place where we are. So, yes, there are plenty of things that I can talk about that weren't successes, too. But we had enough successes, and I'm really proud that we're... Really, I think... There's a lot of great stuff that we were able to accomplish.

14:45Peter Kafka:Stipulate did great stuff. You hired me. You kept me employed at the top of the list. Is there one major do-over? I guess I'm really thinking about, is Facebook the thing you regret the most? Yeah, listen, all the... Depending on them. Let's be honest about all the platforms. I'm careful to say that, in some senses, we couldn't have existed without these platforms. You know, if I go back, you know, I started this company with YouTube. Yeah, I'm a I'm a student of media. And like until the Internet, you had to have a radio tower or a printing press and a license for the radio tower and a local monopoly for the printing press.

15:21And so I had no way of breaking into that. And then along comes the Internet and like we can do it. And then along comes Google and Facebook and they let in and you can be seen with those things and distributing those things. Now, the problem is the rug got pulled out from under us. and I think in some cases in not entirely ethical ways. Those companies don't have any responsibility in some senses to us. But problems start coming in where they take the content, particularly in this AI age, they effectively steal the content, and then they use it to make their own services and to charge their own customers and advertisers for it.

15:59So that's a problem. But having said that, we don't sit around making excuses. We make great products. And we have, at Vox Media, because we have strong brands, we're able to build direct consumer connections. And so, yes, algorithms change. They come and go. You can't ignore them, but you also can't become reliant on them.

16:18Peter Kafka:Again, when I came here, the real focus besides Facebook was video, video, video, making video for the platforms, but also selling. We were going to make television shows and movies. Everyone was trying to do it. We did. But the selling to networks and movie theaters, that business did not really pan out. Again, it didn't really pan out for most people. Yeah, I mean, we had some great... I wanted to wind it up, because it occurs to me that the, hey, let's make video. People will consume video. People will pay to have their ads in video, was right directionally. And it seems like you now have ended up in the right place, because your podcast network is essentially a video network.

16:58Peter Kafka:And I'm wondering if there's a lesson there for people who are thinking about building businesses now. No, that's a good question. I mean, we all, in our industry, we all joke about the pivot to video cliche. But the reason, I mean, everyone says pivot video was this terrible mistake, because, again, you feel like the rug was pulled out from you. But, like, the idea of making things that people want to watch is not a bad idea. Yeah, no, let's not overcomplicate things. Like, people like watching stuff. They also like reading stuff. They also like listening to stuff. But they mostly, you know, if you did a pie chart, most of them like watching stuff.

17:31We were early. Everyone, the industry was early. But, like, let's also be honest. We carry around 4K screens in our pockets. And we can use those 4K screens. And it just took a little while for that all to be figured out. And without the fits and starts, we wouldn't be where we are today. So, if you're not failing, you're not trying hard enough. I know that's easy to say as a CEO, because what happens is you invest in something and it doesn't work out. And then that often has an impact on people's careers. We don't take that lightly. But at the same time, risk is a two-sided coin. And the chances you don't take or the shots on goal that you don't take, you won't score.

18:12And so, you're going to miss a lot of shots. But if you don't take the right shots, you're not going to score. And I'm not trying to be all sports cliches, but it's just the truth. And the medium is progressing, and thankfully, we have been an innovator there. And some of the innovations went down rabbit holes. Others, enough were successful that we're here today.

18:31Peter Kafka:Last history question, and also a chance for you to celebrate yourself and your management here. For a long time, when people talked about the new upstarts in digital media, they were focused on BuzzFeed and Vice. Those were competitive companies. Those companies had higher valuations. They had more buzz. and they had a much harder landing last week. We just had BuzzFeed being sold for a theoretical$120 million and maybe less than that. And today, Vox Media is not where you wanted it to be 10 years ago, but it seems like it's a much better place. How do you account for that? A lot of different things.

19:06I want to thank our employees and our culture that we've built. And I thank them in a long letter today. But we have people who come to work every day and just focus on quality work. I brought up the ASME awards as an example, but there are so many examples of our outstanding work. But in addition to the team and our business partners, who are wonderful to work with, I want to point out our investors, too. Because often in this industry, investors get a bad rap because they... They're the money guys. Yeah, exactly. But I'm going to name a few by name. I'm going to start with the first investor, a guy named Andrew Braccia of Excel Partners, who has been with us for about 18 years.

19:48Those of you who know this industry know that an average fund life is probably like seven years or something like that. He's never been impatient. He's always been supportive. And I will list all of them. Our most recent investor, Jay Penske, same way. Jay knows this business inside and out. He's always been supportive of us. And, of course, you mentioned Versant. And Versant is now run by Mark, who I've known for decades, always been supportive. But it wasn't just Mark. It was Steve Burke, who used to run NBC Universal. It was the folks at Comcast, who have been wonderful. Coastal Adventures, the Wasserstein family, who have been guiding New York Magazine and ultimately merged it with us.

20:29And I can go on. There have been other great ones, too. But their patience and their understanding of our business, and all that time, because hopefully you have some journalists listening, too, Never once in the 18 years of this company has any investor ever leaned on me, ever winked at me, ever suggested that we change anything in any of our stories, any of our journalism whatsoever. How incredible is that? The patience with the capital, the patience with our editorial freedom. And these are people who know people who have friends who we might not write good things about. Never. I mean, isn't that incredible?