Everybody is Not a Media Company
Revelations from a visit to the dentist.
Welcome to People vs Algorithms 25.
I look for patterns in media, business and culture. My POV is informed by 30 years of leadership in media and advertising businesses, most recently as global President of Hearst Magazines, one of the largest publishers in the world.
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The dentist asked me if I wanted gas. Actually, that’s not true. I asked for the gas. Like most, I don't love the dentist, even though mine is a paragon of efficiency and testament to the “10,000 hours mastery” rule — the good doctor was ripping an incredible guitar solo in my mouth with the dexterity of Eddie Van Halen. The procedure was routine but did involve needles and drilling, picking and scraping devices. I inhaled deeply. The gas took the edge off. A Netflix crime show playing on the screen above the chair dissolved into background noise. Perhaps I inhaled too deeply.
Was I opening my mouth wide enough? Honestly, I couldn’t tell. I fought to check my shame narrative: “OMG, my dentist is going to think I’m a fiend getting too high on his gas.” I remembered my mouth was propped open by this rubber mouth-jack thing. My mind drifted to something more productive… the newsletter.
I started thinking about my “newsletter bullshit” also known as “pundits rationalization” where inconvenient facts are brushed aside in an effort to make a singular, persuasive point. Now, this behavior has a place in the world of ideas because it clears out the intellectual brush and offers a clear view on an idea, which is mostly useful. Lots of respectable pundits do it. But it needs to be acknowledged.
Last week I circled around the idea that all media was becoming a feature of something else. I was making the point that as digital connected commerce and media in one seamless continuum, it was increasingly the case that content would be funded by means other than selling the media itself - like Amazon funds entertainment to enhance the Prime bundle, hopefully to get you to shop more. Apple vertically integrates to include content as core part of a premium hardware / software / services / retail platform offering.
This is another way of saying something that people like John Battelle have been saying for a long, long time that “everyone is a publisher.” Which is also equivalent of saying in a on-demand digital media world, every marketer needs a helpful content-driven front end to engage the customer. This is a useful way to see things.
But to say “everyone is a media company” is an overstatement. To say “media is becoming a feature of everything else” is an accurate acknowledgment that the business models of media are evolving beyond subscriptions and advertising. To say “everyone is a content marketer” is fair. But not everybody is a media company. Pure media must pursue its own ends. Period.
In my nitrous oxide haze, the idea that everyone is a media company felt cute but disingenuous. Because when content serves a god other than the story itself, you can feel it. There are certainly cases when the overlap between a commercial interest and the media make sense, but we are far too sophisticated a media culture to have this as a defining construct. Was I betraying you the audience in an attempt to make things intellectually tidy?
It sounds kinda weird and a little sad, but it’s true. Sitting in the dentist chair, a 2x2 matrix popped into my head that struck me as a useful way to explain things. It contextualizes the role of content from the perspective of a marketer:
It seemed to me a the time that we could plot content on a horizontal line from marketing to media — the left side content works to sell something other than the content, on the right side, content is pure media whose goal is to inform, enlighten or entertain. On the bottom, content investments are driven by return on investment. As you move up the goal is brand value and influence.
Let’s move from the upper left around the horn and see if the idea works. Quadrant 1 (Ambitious PR) is creating a content layer on your business tightly connected to your category. A16’s Future or McKinsey’s Global Publishing initiatives are good examples. These work when you avoid self promotion and make stuff that competes in the broader media marketplace. Competing requires talent, patience and commitment.
Quadrant 2 (Media Believer) takes even more resolve and budget. The content is arms-length from the business, verging on pure entertainment. Few have the patience to keep going here, particularly when the ROI is hard to measure. Quadrant 2 is much more fun and better cocktail conversation but it’s tough to draw a straight line between the investment and business results.
RedBull is a successful case study. AirBnB’s high-quality magazine is another, a collaboration between Hearst and AirBnB that was a casualty of Covid. Mel Magazine from Dollar Shave Club is another recent example, a fun and ambitious pure publishing experiment that, while briefly popular, was ultimately sold off to Recurrent Ventures.
Departures Magazine, born as a benefit for Amex Platinum card holders, was successful for many years because it leveraged a high-value distribution position coveted by luxury marketers. Granted, it did so as a very profitable, stand-alone business. It may be a better example for Quadrant 3 because it really only prospered because of the premium member list.
More often than not, ambitious media experiments, not tightly connected to the business or ROI, retreat to Quadrant 4, plain old content marketing after the Believer leaves the job or the CFO questions why you did it in the first place.
Quadrant 3 (Vertical Integrator) is basically old fashioned media. For non-media brands, moving here typically involves leveraging existing distribution advantages, Apple’s premium customer base and platform surface area or Amazon 100M+ Prime subscribers. This is real media and sustained only by investing in real talent, a corresponding media operating culture and a self sustaining P&L. The trap here is media always takes time to develop. When it doesn’t start with a sensible investment horizon, partnerships or talent, it won’t actualize.
Quadrant 4 is old fashioned Content Marketing. Here you make content to sell your stuff and make money. This is basically all marketing now. The trap here is obvious — you do it but are not particularly helpful or engaging.
Of course, the model also describes the world where you endeavor to find the balance between content and commerce. Examples of people that have run at the problem from the commerce angle, as savvy DTC sellers like Glossier, Mr. Porter and Huckberry have done, or media companies that come at selling their own products from an editorial angle as say the wonderful Milk Street is doing. Either way there is a magic when it is done right, a type of lifestyle merchandising that makes you want something without telling you to buy it.
Getting the balance right is easier said than done. I have seen this first hand some of the best content to commerce hybrids. The minute the content proposition doesn’t profitably serve a commerce goal, you begin to question the investment. While it seems simple and obvious that the models blend, media and commerce are distinct businesses that require distinct competencies. As you add functions, business complexity increases exponentially, not linearly. I’ve learned this the hard way over the years, combining media and platform and ad network into one albatros. Let’s call this the “Ikea Meatball Rule.” Meatballs at Ikea are decent but they are likely not the reason you go back. Not often at least.
I would say, more often that not, advantage goes to those that layer content on a core commerce offering. They are less sentimental about the role content plays in the overall commercial proposition.
The lesson here, other than try the gas and you might come up with a nifty 2x2, is as follows:
The path from marketer to media company rarely worth it unless you have a material distribution advantage that allows you to build a real business;
The top right (Media Believer) is not for the faint of heart and while ambitions often start here, it doesn’t last unless the business case is crystal clear;
Content to commerce is a nifty idea but really nailing it requires superb alignment between content and merchandising objectives;
Media needs its own master and business model that aligns with the goals of making great media.
I got covid in the back of an Uber or something and it sucks. It afforded me time to indulge in all of my streaming subscriptions. I thought I would share a couple of observations about the state of things, through this Covid haze:
Yes, there’s a lot of good shit out there including Julia and Winning Time, both on HBO Max which is on a serious roll. I am a sucker for stories about unconventional heroes that win;
Distribution advantage affords media stability and unnatural profits. This was the case with the cable ecosystem and network TV. These advantages can come through the wire (above) or technology driven network effects (Google). You can also find privileged, sustained profit positions highly differentiated IP like Harry Potter;
When content companies compete without these advantages, they have to make a ton of content, which, while good for consumers, drains the system of profit and forces companies to seek scale through M&A;
We will end up with a few “super services” that look a lot like cable. The good news is the shakeup has delivered choice and killed commercials;
Curators matter more. We need them now because as distribution has fractured it’s too hard to find stuff that is worth your time.
If I had it my way, my personal media ecosystem would look like this:
A decent streaming news channel, live and without ads, especially ads for old people things. Note, this is not what CNN+ is offering, which Vulture amusingly suggested had Quibi vibes. News is a live thing, not a on-demand show thing;
10 good show and movie recommendations a month from someone who knows me, as well as a short list of classic offerings to revisit. Please relieve me of the agony of scrolling through Netflix;
A couple of decent newspapers with well staffed news rooms, like the FT, Guardian or WSJ, offering a range of perspectives, US and international. Happy to pay up for these;
A healthy list of newsletters, personal and unencumbered by journalistic convention. Written by experts. Again, happy to pay;
A handful of podcasts but not the sycophantic stuff like “Smartless.” Smartful experts who ask good questions;
Twitter talks too much about itself and feels like a high school cafeteria. It can go away. So can Facebook. Does Instagram really make your life better?
TikTok is awesome but needs to be used in moderation. Btw, Gabby at The Chernin Group wrote a nice thread on the virtues of TikTok remix culture. This example is money;
Yes, YouTube should stay.
What would you world look like?
1. Images from words
DALLE-2 is a very cool is a new AI system that creates realistic images and art from natural language
DALL·E 2 can make realistic edits to existing images from a natural language caption. It can add and remove elements while taking shadows, reflections, and textures into account.
2. Nice house things, presented in a simple visual way
3. Open a tab and get art
Discover new and iconic works of art from The Museum of Modern Art each time you open a new tab in Chrome.
4. Redditors make art together
From the Verge:
Watching it evolve is like staring into the heart of Reddit. You get to see communities fighting to take over tiles or collaborating to make their own pieces of artwork — which included everything from an Among Us crewmate to a giant trans pride flag. And, you know, a terrifying face peeking out from a void (which pops up multiple times, of course).
5. Will, the first french homeless guy in the metaverse
From the Drum:
The announcement makes the point that, as people are already buying virtual properties and items worth hundreds of thousands of pounds, there is still a need to address the reality of homelessness. It marks the end of France’s emergency accommodation plans for precarious people, which takes place every year on March 31.
6. Guess the place
Explordle ties videos together in a fun little game.
7. Unreal Engine 5 makes lifelike animation
Outside of gaming, engines like Unreal have also become increasingly popular for other applications, most notably film and television. The Mandalorian, for instance, utilized Unreal for its virtual sets. With tools like UE5 and a new generation of gaming hardware, Libreri believes we’ll see more of this kind of crossover between mediums. In the past, he says, creators would build “movie quality assets” that would then have to be scaled down to be used in a game. Now those lines are starting to blur, opening up all kinds of possibilities.
And, the Bizness: