More acquisitions of ethnic media businesses are likely to occur as mainstream businesses recognize the increasing buying power in minority markets.
Those markets are fast growing and lucrative. Omar Wasow, executive director of BlackPlanet.com, a Web site catering to blacks, said the combined buying power of blacks, Latinos and Asian-Americans is $1.2 trillion a year.
Time Warner Inc. recently bought black portal Africana.com and last year Seagram's bought hip hop label Def Jam from Russell Simmons.
The collaborations between minority businesses and mainstream businesses are making more sense, experts say. Businesses that cater to minorities have the expertise, while the mainstream businesses have the deep pockets and resources to take those businesses to new levels, say experts.
"It would not have made sense for Viacom to build a company like BET," said Alfred A. Edmund Jr., senior vice president and editor-and-chief of Black Enterprise magazine.
"It would have cost them more. So they decided if we can't beat them we should join them."
And if mainstream companies are not buying minority businesses they are forming joint ventures with them. Some of the most prominent and recent ones include Essence Communications' joint venture with Time Warner and Oprah Winfrey's partnership with Hearst Magazine to publish O magazine.
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