Candle Media, a Los Angeles-based media company, has been making headlines since its inception in 2021. Founded by two former Disney executives, Kevin Mayer and Tom Staggs, and backed by the powerhouse investment firm Blackstone, the company has been on a wild buying spree, acquiring industry heavyweights such as Hello Sunshine, Moonbug Entertainment, and most recently, Attention. With a staggering $4 billion spent on acquisitions in just two years, the question remains: is Candle Media's success sustainable, or is the company headed for a swift downfall?
Candle Media's founders had a big vision for the future of entertainment. They were all about creators and giving them the stage and freedom to do their thing. They believed that magic happens when creators are in the driver's seat and aimed to create brands and franchises that deeply resonated with audiences. The company wanted to blur the lines between what you watch, what you can buy, and your experiences, creating a content community commerce flywheel where everyone benefits.
The company's first major acquisition was of Reese Witherspoon's Hello Sunshine for $900 million. Hello Sunshine puts women's stories front and center, and has a book club called Reese's Book Club x Hello Sunshine. They use it to share and promote books that highlight women's stories, and have a significant following on Instagram and Facebook. They've also dived into podcasts and short-form series.
Candle Media's next major acquisition was of Moonbug Entertainment, a children's entertainment powerhouse known for creating beloved shows like Cocomelon and Blippi. The staggering $3 billion price tag solidified Candle Media's presence in the family entertainment space. Moonbug quickly became a powerhouse in children's entertainment, producing various shows from animation to live-action and puppetry. Their portfolio includes beloved YouTube channels like Coco and Little Baby Bum and popular series such as Mia's Magic Playground, Blippi, and My Magic Pet Morphle.
Candle Media's acquisition spree continued with the strategic minority investment in Will Smith and Jada Pinkett Smith's Westbrook and the acquisition of Fairway Road Productions. Most recently, they acquired Attention, a company specializing in social media storytelling for $100 million, and set their sights on International expansion with the acquisition of EX St content Studios, a Spanish production studio.
However, despite their rapid rise and impressive portfolio, Candle Media's success may not be sustainable. The company's projected earnings for 2023 are projected to be about 50% less than what their newly acquired companies had anticipated. A combination of factors, including a decline in advertising revenue on YouTube, Hollywood strikes, and a general belt-tightening across the board, have contributed to this unexpected drop in earnings.
Despite these challenges, Candle Media's founders remain optimistic. They firmly believe that the company is still a strong and profitable business, with top-notch talent and creative output. They call Candle Media a highly profitable, high-quality business, and their primary backer, Blackstone, is in it for the long haul.
In conclusion, while Candle Media's success graph may have hit a few bumps, it's too early to count them out. With a strong vision, impressive portfolio, and the backing of a powerhouse investment firm, the company may still have a chance at achieving greatness. Only time will tell if Candle Media is destined for greatness or doomed to fail.