News Corp. Acquires Video Startup Storyful for $25 MillionEdmund Lee
The acquisition lets New York-based News Corp. capitalize on the surge in crowd-sourced reporting, an area many newsrooms are trying to mine for content. The 28-employee startup also specializes in verifying citizen reports coming in through social media, such as during the Boston Bombing. Storyful, based in Dublin, will operate as a stand-alone company within News Corp., according to a statement yesterday.
The ease of shooting video clips with smartphones has produced a wealth of real-time news from nonjournalists. Storyful secures permission for videos it considers newsworthy and sells licenses for their use to organizations such as the New York Times, Reuters and CNN.
Rupert Murdoch, the chairman of News Corp., split off the company from his more profitable television and movie assets at the end of June. No longer able to rely on the profits of his cable networks to support the weaker newspaper businesses, Murdoch has pushed executives to get more revenue from online audiences. Video content is seen as especially lucrative because it draws higher ad rates than traditional banner ads.
Storyful was founded in 2010 by Mark Little, an Irish journalist for the national RTE broadcaster, and aimed to be “the first news agency of the social media age,” Little says on the company’s website.
“I watched the Arab Spring unfold on YouTube and saw an authenticity I had rarely seen on TV news,” he says. “This is what Storyful is all about. Social media hasn’t killed journalism. It has given it a new lease of life.”
Advertisers will spend as much as $4.15 billion on digital video this year, an almost 44 percent gain from the previous year, according to estimates from research firm EMarketer Inc. Google Inc.’s YouTube still grabs the biggest piece of online video ads with about 21 percent, EMarketer estimates. Online video ad spending is expected to reach $5.8 billion next year.
News Corp. rose 2.2 percent to $17.75 at the close in New York yesterday. The stock has climbed 12 percent this year.
With assistance from Nandini Sukumar in London.