Aaron Levant (pictured), who has served as NTWRK's CEO since its launch, will now become CEO of Complex, in what appears to amount to a merger between the two properties
MBW Explains is a series of analytical features in which we explore the context behind major music industry talking points – and suggest what might happen next. Only MBW+ subscribers have unlimited access to these articles. MBW Explains is supported by JKBX, a technology platform that offers consumers access to music royalties as an asset class.
What’s happened?
Universal Music Group is acquiring a stake in the youth-orientated media platform, Complex.
UMG will become a strategic partner in Complex alongside other investors such as Goldman Sachs, Main Street Advisors, and Jimmy Iovine, via an agreed takeover that sees live-video shopping platform NTWRK become the official owner of Complex and its networks.
Complex was sold to BuzzFeed in a deal worth USD$294 million in November 2021. Buzzfeed confirmed today (February 21) that NTWRK (and its backers) have now agreed to buy Complex in a $108.6 million cash acquisition.
A press release issued by Universal Music Group today stated that the NTWRK consortium’s acquisition of Complex will “create a new destination for ‘superfan’ culture that will define the future of commerce, digital media, and music”.
What will be UMG’s ‘strategic partner’ play here? A fair assumption: It will include selling music-associated ‘superfan’ products (sneakers, streetwear, collectibles, vinyl, experiences etc.) direct to Complex’s culture-savvy audience via NTWRK’s technology.
This would fit with Sir Lucian Grainge‘s stated priorities for UMG in 2024.
In January, Grainge told staff in a new year’s note: “The next focus of our strategy will be to grow the pie for all artists, by strengthening the artist-fan relationship through superfan experiences and products.”
What’s the context?
NTWRK was co-founded in 2018 by Jamie Iovine (son of Jimmy) alongside Gaston Dominguez-Letelier and Aaron Levant. According to today’s UMG media release, the livestream US shopping industry, within which NTWRK operates, is “estimated to reach $68 billion in sales by 2026″.
Levant, who has served as NTWRK’s CEO since its launch, will now take on the mantle of CEO of Complex, in what appears to amount to a merger between the two properties.
Interscope Geffen A&M (IGA) and Capitol Music Group will become the first Universal labels to take advantage of the NTWRK/Complex ‘superfan’ strategy.
Today’s announcement said that the labels would use the new relationship to deliver “industry-leading and culture-moving experiences and exclusive collaborations, direct to passionate music fans in groundbreaking and authentic ways”.
“This partnership will give our artists access to a dynamic network to deepen connections with superfans through unique collaborations and cultural moments.”
IGA has previously promoted exclusive collaborations on NTWRK with BLACKPINK x Murakami and the Interscope 30th Anniversary vinyl collection.
“This [UMG/NTWRK/Complex] partnership will give our artists access to a dynamic network to deepen connections with superfans through unique collaborations and cultural moments,” John Janick, Chairman and CEO of IGA, said today.
Janick, who will also serve on the board of the new combined company, added: “We share a collective vision on how D2C, experiential, brand partnerships and content are mutually reinforcing cornerstones of the fan experience.
“We will continue to sign and elevate new generations of great talent and we believe that we can best serve these artists through a holistic set of capabilities.”
NTWRK has previously partnered with other cultural and entertainment figures including Post Malone and Lewis Hamilton.
A final thought…
Interestingly, UMG’s acquisition of a stake in Complex arrives in the same month that Robert Kyncl – CEO of Warner Music Group – confirmed that WMG is in active discussions to sell two of Complex’s long-time media rivals: Uproxx and HipHopDX.
As part of a confirmation of a planned 10% headcount reduction at WMG this year, Kyncl confirmed on February 7 that Warner is seeking acquirers for Uproxx and HipHopDX.
Elsewhere, Warner is shutting down the social meme platform IMGN plus podcast brand Interval Presents, as the company looks to exit its “owned and operated” media properties.
Kyncl told his staff that Warner’s owned media brands like Uproxx and HipHopDX – which Warner acquired in 2018 and 2020 respectively – “operate outside our core responsibilities to our roster”.
Also worth thinking about: Sony Music Group‘s The Orchard continues to own media properties aimed at fans of niche music culture, including Metal Sucks and Metal Injection.
