Independent Media’s Moment
Eleven years ago, I made Ev Williams cringe at the first ever social media conference. I was a journalist covering the BlogOn conference at UC Berkeley’s Haas campus. At that time, I was excited about the novelty of posting video interviews to my company’s site so I was carrying around my camera to conduct video interviews with attendees. I spotted Williams — who at that time was well known for founding Blogger — from across the room. I approached him and he kindly agreed to talk for a few minutes. I fired my camera up — a simple point and shoot device — pointed it at Williams and introduced him as “The founder of Blogger and co-founder of Odeo, a blog search engine.”
Except Odeo wasn’t a blog search engine. Williams cringed and pointed out that Odeo was a podcast platform. I eventually got the intro right, conducted the interview and proudly posted that video to my publishing company’s site.
That was one of the first formal gatherings of social media entrepreneurs. Blog, social software and media tinkerers were well represented there and optimistic about the democratization of media and the more open communications they were enabling. Following the industry in the next few years years, Wordpress, Blogger and Typepad empowered bloggers, Twitter changed communications and Facebook washed Myspace and Friendster away. Yet, for what seemed like a long while, there was little of that value being realized. No IPOs, few acquisitions and just a small handful of big fundraising valuations. It led some to question the lasting power of social media.
A decade letter, it’s clear the skepticism was unfounded. It only took a little more patience for Facebook to go public, Twitter to exceed $1B in annual revenue, Pinterest to raise at a $11B valuation and Wordpress to raise $160M.
Sometimes it takes a while for what you know to be true to come true. The rise of independent and influential content creators come to mind. Much has been made over the past ten years of independent publishers using inexpensive tools to challenge more established media powerhouses. And while, some have attracted big audiences (Buzzfeed), raised at big valuations (Vice Media) and built big brands (Vice Media), very few have achieved liquidity events or built lasting media brands yet.
Maybe that’s starting to change. Last month seems to have brought more independent media M&A activity than we’ve seen in the previous year. Business Insider sold a majority stake to Axel Springer at a reported $400M valuation. Pitchfork went to Conde Nast for an undisclosed amount while Time bought Hello Giggles for between $20M and $30M and xoJane (sold by my former employer Say Media) for an undisclosed amount.
Here are some of the lessons this recent spate of dealmaking activity holds for independent content creators:
- Contributor Networks Help — Digital natives can teach more traditional media companies (and even brands) how to lower their content creation costs. In a world of shrinking and more accountable revenues, lowering the marginal cost of content is an important lever to be able to pull. Hello Giggles and xoJane have carefully built out a network of hundreds of contributors amongst their readers.
- Brand Equity is Paramount — Acquirers are paying 10X+ revenue multiples because they plan to expand their newly acquired media brand across platforms. Hello Giggles will help Time with online video. Conde can expand Pitchfork’s events and radio initiatives.
- Launch Date Doesn’t Matter — It seemed a few years ago that only the sites founded before 2008 could attract a big online audience. Hello Giggles and Jane Pratt’s xoJane disproved that. Both launched in 2011 and attract about 10M unique visitors per month. Business Insider launched in 2009 and grew to 75M monthly uniques. It used to take time for newer sites to appear toward the top of Google’s search results. In a search-dominated world, this prevented new sites from gaining meaningful distribution. The shift to social changed all that. New sites such as Elite Daily — acquired by MailOnline — , ViralNova — acquired by Zealot Networks — , and venture-backed PlayBuzz obtained eight digit monthly uniques faster than any sites before them.
- Distribution and Audience is Required — As publishers grapple with the need to distribute their content across social channels to gain audience and attention, digital natives can bring much needed expertise to the topic. Pitchfork claims 5M followers across Facebook, Twitter, Spotify and YouTube. HelloGiggles sources 70% of its traffic from social platforms.
It’s difficult to tell if the dealmaking will continue in the short term. In the long run, however, independent media sites will be coveted by more traditional media companies seeking to offset declining print businesses with rising digital ones. Brands should also be getting into the game aligning their marketing positions with content creators that reinforce that. When they do, aside from the pricey companies listed above, here are some of the independent media brands at the top of buyers’ shopping lists:
- Refinery29 — A top destination for fashion and beauty conscious female millennials. They are currently broadening their editorial mission.
- Apartment Therapy — A master of search-driven editorial, it is one of the leading online shelter sites with an even bigger sister food site called The Kitchn.
- High Snobiety — A men’s lifestyle site that — along with sister site Selectism — reaches young stylish males around the globe.
- Mashable — With Business Insider, TechCrunch and Recode off the market, Mashable remains one of the last big name and audience independent tech sites.
- Politico — The leading political news digital native that’s now experimenting with local political coverage.