Can it survive the relentless attack?
Welcome to People vs Algorithms #34.
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.
Note 1: The team at PvA (ha) has been operating on summer hours. Was out of the country traveling last week and did not have discipline to file from the road.
Note 2: I have always endeavored to maintain an optimistic headspace through thick and thin. The alternative doesn’t seem very useful. Progress, as we know, is never a straight line. A sobering Guardian piece, “With the end of Roe, the US edges closer and closer to civil war” is an important read if only to remind us how the grim the future could be. Women's rights are under attack. The poor and disadvantaged will pay the biggest price. Small state bias in the US electoral system favors retrograde thinking against the will of the majority. That said, I will remain an optimist. I have never witnessed a period where more important issues were in play and where so many people are willing to fight for positive social and environmental change.
I wanted to write something about how web pages suck as content delivery platforms and TikTok is taking all the attention and how new research from Reuters suggests that young people are tuning out the news and rarely use websites and all of that, but I got so bored and thought you would too. Why spread that thought into 2000 words when you can just do it in one run-on sentence?
All of it had me thinking about media brands that break with conventions of good taste and crush it and how we might appreciate them more. Sites like the DailyMail, which a savvy colleague of mine once confessed was the only site she visitored with regularity. I briefly considered why. Was it long headlines that satisfy without a click? Bulleted “decks” that efficiently serve an impatient reader? Or how image and video soaked pages delivered endless vicarious thrills. Maybe it’s just that a well executed British tabloid makes the move to digital better than other media brands. Needless to say, I just fell into a half hour DailyMail hole and I am not going to let it dampen my mood.
It was hard not to briefly shift my thinking to Buzzfeed. I want this to be a good news story because Buzzfeed has done some great things over the years. So has Complex. But the future feels hard for a brand founded on the idea of content virality, even with a respectable food vertical, when economic realities force retrenchment on the thing that distinguished the brand — a enterprising news operation. Now competitors have upped their games. After a catastrophic public debut, money is tight and morale is low. Affiliate revenue has slowed materially. Not to mention being smited by SPAC-hating investors and a sour macro environment. Managing through all of this as a public company will be painful.
But… Buzzfeed and DailyMail did more to make the humble webpage compete with superior platform formats than most. Buzzfeed popularized the listicle and the quiz, breaking up long pages and making them interactive. DailyMail turned news into a scannable, visual orgy. Needless to say, the webpage is under siege, now more than ever. The transition to faster, more visual and less ad-laden environments has been going on for a long time. TikTok’s is just the latest affront.
Media companies have long struggled to compete with platforms that optimize user experience and innovation above the needs of advertisers and disrupt with economics of free user-generated content. Those floating video players that pockmock the free web are like little monuments in this futile war, an admission that video is coming to indenture the written word and display advertising will stand as the last pathetic line of defense to its nuclear-powered adversary, preroll.
Smarter members of the resistance, people like Neil Vogel CEO of DotDash / Meredith, live by a doctrine of “fewer, faster, better.” The idea seems obvious. Compete by doing things the audience likes. The key is money, of course. Things started to fall in place when publishers could align the needs of the reader with Google distribution and affiliate became a material part of the revenue mix. Listen to Neil’s great discussion with Brian Morrissey on the Rebooting podcast. This tidbit was sensible:
“Anybody who thinks they're going to reinvent the rules of historical media, don't give them money. You're not going to. Media is super simple. Collect and serve audiences that are valuable, make yourselves valuable to them, deliver them to advertisers, partners, and marketers in a way that works for your audience and your marketer. That's it. All the other nonsense, like any publisher that tells you they're a tech company, run for the hills.”
Perhaps things are not as dire as they seem. Good brands will go on. The open web will limp alongside proprietary platforms because it’s easy and open, searchable and interconnected and because we want it to, dammit. Media brands will syndicate content relentlessly because there’s audience there and money on the margin. Content creators will continue to share secrets of black box algorithms and how to game a system they do not control. New middlemen will emerge with new ways of making money and publishers will skeptically march forward, always careful to hedge and diversify, test and iterate.
The Smith’s will soon reveal Semafor. It will take the opportunity to iterate on format, prioritizing email, dividing the presentation of facts and opinion, prioritizing the presentation of author brand next to their media brand.
The LA Times will look to capture the attention of a video-addled next gen with the “404,” “the first-of-its-kind collective in any major U.S. newsroom,” untethered from an old fashioned website, focused on youthful original storytelling and tuned to the TikTok video-to-the-vein sensibility. Here come the news puppets.
Many will prioritize email because email is simple, finite and it makes its way to a reader. Advertisers appreciate it more than they used to. Others will attempt to compete in a crowded podcast market because they too are easy and inexpensive to make, and also a good carrier of ads. Vox Media has done such a good job here. Most will find a way to make ends meet because they always do. As Neil says, it’s just media… it’s not that complicated.
I thought about what Warren Buffet would say about all of this. Where would he put money if all he could do was invest in media companies. BTW, you could have spent $19M and asked him over lunch but someone just booked that reservation on eBay and will soon be breaking bread with the Oracle at New York’s Smith & Willensky steakhouse.
So where do you place your bets now? If you were going to start a company or invest in a existing media enterprise, what precepts will guide your decisions. When everything is digital, the lines blur between text, audio, video and games, between brand and performance, news and lifestyle, commerce and content. How would you prioritize what matters?
I have my own simple way of thinking about these things, less rooted in a category of media or segment than fundamental connection between an audience and brand and a sustainable distribution mechanism that sustains that connection. This is the heart and it’s the thing you always underwrite to. It doesn’t matter if it's manifest in a search-driven website, an app, a production capability or email. Is the connection real, does it create value for the recipient, can it be repeated sustainably, can it grow. Is there a fundamental profitable arbitrage in building the audience and extracting value from it. The heart is the verifiable human connection.
The cardiovascular system is part two. Can we take the blood provided by the heart and better circulate it throughout the system to find new growth? This is about the team and culture that sustains them. Tailwinds are key. Remember, you are betting on this part for the future, but you underwrite to the health of the heart. One will often hear things like “can you imagine how big this thing would be if they took the brand and did this or that” or “if we owned this company we would do this so much better than the people that run it now.” All of which is fine and natural, but it is not where you bet the grocery money. Think potential not proof.
Let’s call the final part the reproductive system. Here we think about the business in connection to other parts of a larger ecosystem. How might the asset synergize with your other assets or acquisitions? Where is the potential to roll together assets? Who might find the business so strategic as to pay unreasonable amounts of money for it in the future? In short, where are the synergies and why are you strategic to someone.
Apologies if this seems slightly obvious or too conceptual. The point is everything starts with a brand’s fundamental ability to demonstrate a sustainable connection that produces profit. Everything else is upside. Investing themes are great. This is foundational.
I was reminded of the idea in a meeting this week. A lot of people in media romanticize the idea of selling products. Content and commerce. It is a natural reaction to an over dependence on advertising. But on the internet, selling a product is just advertising by a different name. You still have to have a brand / audience connection built on insight, creativity and curation. Otherwise you are just an undifferentiated catalog of SKUs, now with massive new complexities in product development, sourcing, selling, fulfillment and customer service and the never ending grind of margin compression. It’s not enough to be good at one or the other. You have to do both well. Few will. But everything still starts with the heart.
Which brings us back to TikTok and Khaby Lame, a 22-year-old Senegalese-born creator, just became the platform’s most followed topping 144M followers. His average video posts get a staggering 30m views. Consumers are spending an average of 52 minutes daily on the platform. This doesn't mean they won’t read professional media or watch dramas on Netflix. But it's 52 minutes taken from somewhere else. More importantly, it’s a new media habit. The simple notion that an increasing amount of time is spent on short form video by a growing class of amateur and semi-professional creators should trigger some reflection on the shape of future media and how digital media companies compete. The humble web page has a tough job ahead.
Have a great long weekend…/ Troy
A few good links:
1. Something optimistic. “24 charts that show we’re (mostly) living better than our parents” / Full Stack Economics
But have average Americans really suffered from falling living standards over the last 30 or 40 years? I’ve spent the last month researching this question, and the data I’ve found simply don’t back up these claims.
Not every facet of our economic life is improving, of course. College tuition has risen a lot, and so have rents in some big metro areas. But even in problem sectors like health care, housing, and education, the situation isn’t as grim as pessimists claim. And there are many other areas of economic life where we are unambiguously better off than our parents.
2. Someone will eventually break the iPhone hegemony. Maybe it looks something like this:
3. Weezer insists you to spin while listening to their new single. Cute but do we really want to listen to Weezer that bad?
4. Finally, an honest-to goodness rotary cellphone.
5. Crypto pranksters create a stable coin backed by Arizona Iced Tea and more. “How Canned Iced Tea Became a Viral Crypto Project” / The Information
USDTea was the latest shenanigan from a group of artists who have spent more than a decade making headlines for their often-sardonic digital projects. Moore and Baker are the pranksters behind Cloak, an antisocial social app that lets people track their friends’ locations solely so they can avoid them. And all three teamed up to create a brutal satirical game, Thoughts and Prayers, where players try to stop school shootings with thoughts and prayers alone (players lose every time).
6. Movie of the Night is a useful search tool for inevitable moments of programming uncertainty.
7. Let’s finish with this celebratory 50th anniversary from Nike and Spike Lee. Surely the marketers of the century.
And Shahar Varshal makes good video mashups.
Rock the bossanova, casanova.