Advance Publications is taking an unlikely diversification strategy

This is an excerpt from a story delivered exclusively to Business Insider Intelligence Digital Media Briefing subscribers. To receive the full story plus other insights each morning, click here.Condé Nast owner Advance Publications will spend up to $10 billion on acquiring and investing in global businesses in areas including esports, musical theater, and satellite launches, per The Wall Street Journal. The Newhouse family-owned company has already spent roughly $3 billion across these areas.Here's what it means: Advance Publications is ramping up on investments in a bid to expand beyond its traditional media holdings and lower the company's reliance on ad revenue.The media business — in particular publishing — is increasingly challenged. Print advertising and circulation have plummeted, and the duopoly absorbs the majority of digital ad revenue, as well as most digital ad growth. For its part, Advance Publications has attempted to revitalize its holdings through leadership shakeups and even some publication sales.For example, in April, the company hired former Pandora CEO Roger Lynch as Condé Nast's first global CEO in hopes that Lynch's distinguished track record might breathe some new life into its struggling publications. And earlier this week, Advance sold its New Orleans newspaper The Times-Picayune to a regional rival after its attempt to pull it into the digital era flopped. As a result, Advance recognizes that its future may lay beyond publishing, and is diversifying to widen its portfolio's scope. The company has been pursuing opportunities that it projects to be “the most disruptive economic trends over the next 10 or 20 years.” This has led Advance Publications to stick its hands in some unlikely cookie jars:Musical theater: Last August, Advance Publications acquired the Amsterdam-based theatrical production company Stage Entertainment for about $1.1 billion. The group has previously produced shows such as “Mamma Mia!” and “The Lion King.”Esports: Among Advance Publications' recently acquired esports-related assets include a majority stake in esports analytics firm Newzoo and Berlin-based esports business news site Esports Observer. Advance Publications consolidated its esports businesses along with its sports business brand holdings under a new subsidiary called Leaders Group in April. AI and machine learning: In March, Advance Publications purchased Turnitin — a software that detects plagiarism — for nearly $1.75 billion.Satellites: Advance Publications also bought a stake in California-based Stealth Space Co., a rocket operator that specializes in low-Earth-orbit satellite launches.The bigger picture: In an industry where marketers are demanding scale and data on audiences, companies need to get creative to support publications that can no longer afford to be dependent on ad revenue alone. Advance Publications' moves into the digital space have proved to not be enough against the duopoly.But its acquisitions in new, growing areas could help its overall business stabilize and grow. For example, Advance's acquisitions in esports will help it tap what's expected to be a rapidly growing industry geared toward younger consumers: Esports reached almost 400 million viewers worldwide in 2018, with total revenues reaching $869 million and projected to more than triple to almost $3 billion by 2022, per eMarketer.This round of acquisitions and investments is not a sign that Advance is abandoning its legacy publications, but rather that it's looking to supplement those businesses by expanding into industries that promise fast and long term growth.Interested in getting the full story？ Here are two ways to get access: 1. Sign up for the Digital Media Briefing to get it delivered to your inbox 6x a week. >> Get Started2. Subscribe to a Premium pass to Business Insider Intelligence and gain immediate access to the Digital Media Briefing, plus more than 250 other expertly researched reports. As an added bonus, you'll also gain access to all future reports and daily newsletters to ensure you stay ahead of the curve and benefit personally and professionally. >> Learn More Now