Tolman Geffs, managing director of Jordan, Edmiston Group, said the number of deals for online consumer media companies has nearly doubled in the last three months. There have been 91 in the last nine months compared to 47 in the three previous quarters.
"The biggest problem is acquiring new users," Geffs said. He pointed out year/year audience growth among 10 major online publishers has been only 6.4%. "There was a time when that was the monthly growth rate." The urgency for a larger audience is the fact, according to research by Outsell, that an online customer is worth only 1/3rd the revenue of a print reader.
Geffs said 42% of the recent deals have been completed by existing media players. Examples include the purchases by The New York Times (NYT) of About.com, Reader's Digest (RDA) buyout of AllRecipes.com, and Viacom's (VIA) acquisition of Atom Entertainment as strategies to reach more people, online, quickly. His firm managed at least nine deals over the summer.
Among companies looking to make deals, Geffs said, is Amazon.com (AMZN). "It is actively out in the market search for media-type properties," he told the OPA.
Geffs offered some predictions, including one that most online newspapers will adopt some sort of paid model. He cited The New York Times' (NYT) "TimesSelect" feature as an example "of where the industry will have to go."
He also said television networks will be worth more as they learn to distribute and monetize content, similar to the newly-announced national broadband company effort from NBC. He also predicted that financial analysts at brokerage firms will become the first high-paid bloggers if they “can go very deep on a sector and break market moving news, (they) will be able to charge subscriptions," Geffs said.
Disclosure: The author owns shares of Viacom.