Everyone Is a Media Company Now
Regular readers of The Hustle, a media outlet focused on business news, know its unique ability to make business and finance news more accessible. Since launching in 2014, it’s amassed close to 2 million newsletter subscribers and launched podcasts and a research business. Wherever audiences happen to experience The Hustle, they encounter a conversational tone, youth-friendly brand and sharp analysis.
Those same audiences have to really squint, though, to know that The Hustle is not just a business news site. It’s owned by Hubspot, the publicly traded software company that acquired The Hustle for $27 million about a year ago.
Being of Value to Audiences
Hubspot is one of an increasing number of companies — from consumer brands like Nike and Patagonia, to venture capitalists like Andreesen Horowitz, to banks like JP Morgan Chase — that are building or acquiring their own news and media operations.
Why? Because every business depends on audience attention for growth. They need it to build their brand, acquire new customers and keep those customers loyal. But attention is getting harder and harder to capture.
“We’ve seen an explosion in brands using online channels to promote their services and products to potential customers,” Kieran Flanagan, senior vice president of marketing at Hubspot, said in a blog post announcing the acquisition. “The problem with this model is that you’re not only battling other competitors for that attention; you’re competing against every site that publishes informative videos, the latest trends and educational content that serves the needs of their audiences. We’ve built HubSpot on the belief that you earn attention by being of value.”
In short, every company needs to start thinking and acting like a media company.
Media companies trade in an increasingly scarce commodity — direct relationships with audiences over an extended period of time. We check our favorite news outlets or aggregators in the morning, flip on Netflix at night and rely on many other brands in between. These relationships are built around a certain kind of value exchange. A media company gives the audience something informative, inspiring or entertaining and in return, the audience gives the media company their attention.
Brands will only benefit from functioning like a media company if they adhere to a media company’s core principle of serving the audience before their own self interest.
These relationships are important because of several headwinds facing all businesses. Online privacy measures mean brands can no longer use intrusive personal data about individual consumers to target them with precise ads.
So the more that brands can get people to interact with them directly — through their website, their app or their own media channels — the more they can learn firsthand what people want.
The Market Rewards Subscription Models
Financial markets are favoring businesses with recurring revenue, because it’s more predictable and profitable than gaudy growth numbers. Media companies specialize in subscription-based customer relationships. The New York Times currently has 10 million paying subscribers. Yes, people cancel, but it’s unlikely that number will ever go down. The result: The Times earns $1 billion less in annual revenue now than it did in 2008 when it relied mostly on advertising revenue, but its market capitalization is five times greater.
Audiences are also fragmented across millions of media, platforms and venues. That makes traditional forms of marketing and advertising far less effective. And even when a TV ad or a digital marketing campaign resonates with a lot of people, the brand is effectively only renting those audiences. In order to reach them again, they have to do it all over again.
Hubspot’s acquisition of The Hustle was made with these trends in mind. And many other companies are doing the same. Here are some other examples:
J.P. Morgan Chase acquired The Infatuation, a food and restaurant media outlet. The logic goes: If you love dining out, maybe you’ll love a credit card that gives you rewards for doing so.
Andreesen Horowitz, the pioneering Silicon Valley venture capital firm, recently launched its own media property, Future. “We want to be the go-to place for understanding and building the future, for anyone who is building, making or curious about tech,” it said in announcing the platform.
Several sports gambling companies are acquiring or licensing sports media companies, in an effort to drum up interest and a deeper understanding of the games that its audiences will ultimately bet on.
Big consumer companies are reorienting their business models around subscriptions that include a variety of media. In addition to its flagship devices, Apple offers a bundle that includes music, streaming TV, fitness, gaming and news services. Nike is building a membership product that includes virtual workouts, fitness and nutrition information and stories about gear and sneaker design.
Is It Journalism?
In a lot of these cases, there are legitimate questions about whether these brands are co-opting or sidestepping the traditional role of journalism, which serves as a source of accountability to these very brands. If on its Future property site, Andreesen Horowitz — which manages a $3 billion cryptocurrency portfolio — publishes articles telling everyone that they should invest in cryptocurrency, are they as reliable a source of information as The Wall Street Journal?
That’s why these efforts must learn from the practices of journalism — transparency, inclusivity, inquiry — not supplant journalism.
Brands will only benefit from functioning like a media company if they adhere to a media company’s core principle of serving the audience before their own self interest. The content they produce needs to be able to stand on its own merit in the media market.
That means treating people as audiences, not consumers. Audiences are real people, with real interests and a fixed amount of attention. “Consumers” are demographic groups to be sold to, evaluated by their ability to buy. Yes, brands need people to buy things and consumers need products that simply do what they need. That will never change. But there is even more value in getting people to see your brand as part of themselves.
That’s what the best media companies do and what the best companies, irrespective of industry, should strive to do.