Why We Invested in Donut Media: The Future of Digital Media
We’re thrilled to announce our investment in Donut Media, a digital media company focused on connecting to the next generation of automotive and motorsports enthusiasts (millennials and Gen-Zs) to turn car culture into pop culture. Welcome, Matt, Ben, Nick and the Donut Media team to the Prototype Capital family!
Coming in, we saw three fundamental truths about the digital media industry:
- Digital media is the future — Millennials will soon be the largest and most influential consumer demographic. Millennials have centered their lives around an on-the-go lifestyle to which incumbents must adapt to. The times, they are a-changin’ and millennials want as much information as possible in the least amount of time possible. Netflix is spending $8B on digital content and Amazon is budgeted to spend another $5B this year. We are approaching a world in which nearly everyone grew up with multiple screens, bringing up the relevance of digital media platforms in order to engage people beyond the television to mobile and short video clips.
- Half of the auto enthusiast market was unaddressed — Ever since Top Gear (the #1 most widely watched TV program), no one has created similar content that sticks with the younger generation internationally. Donut Media tapped into a relative niche category of automotive enthusiasts and pushed away from the general industry status quo of cold, hard auto. By playing to the fun, creative minds of teenagers and young adults, Donut Media has found their product market fit as to making auto content fun again. They were able to capture the eyes of non-enthusiasts by realizing that the auto enthusiast ‘market’ is split into two groups: true tradesmen and fans of the art. Before, the latter didn’t have much of an alternative. Many teenagers and young adults just receiving their license become entrenched in the complexity, personalization, and raw power that owing and operating a vehicle; they wanted to learn the different generations of the BMW 3 series and the design thought behind each iteration, not how to replace a transmission, and they never found that up to now. Millennials have been consuming brute mechanical media channels or indie car reviews, but it quickly became apparent that the market wanted something different.
- Contemporary voice in storytelling is more important than ever — It’s not enough to simply move to digital in order to engage the next generation. With over 400 hours of videos uploaded to YouTube every minute, there is an increased need to tailor content towards the audience. Millennial viewers have come to love snappy, bite-sized videos that seem to speak directly to them. This theme of shareable content allows even niche industries such as the automotive industry to engage both enthusiasts and non-enthusiasts alike. Everything in our world is becoming personalized, from medicine to advertisements to media; in fact, nowadays whenever we see an ad or a piece of media that’s not relevant to us, the brand serving the ad seems to lose some credibility points in our eyes.
We believe that Donut Media drives the epitome of being a digital brand working like a technology start-up (much like VICE or Vox). They’re a digital media company that has built a repeatable data-driven process for creating highly shareable automotive video content aimed at milennials (not unlike, say, a Pixar or Buzzfeed); then they use their curated network of influencers to distribute native car content across social channels in an incredibly personalized fashion.
We’ve longed believed that in this next generation of innovation, agile startups will have to work hand-in-hand with large incumbents. Donut is case and point; securing brand partnerships with likes of Toyota, GM, Omaze, Hagerty, and more, Donut is doing sponsorship deals that create marketing activations and partnerships that look nothing like what we’re used to, especially considering Donut receives over 60M unique viewers every month. And people are noticing — growth numbers are out the roof (to give you an idea, from beginning conversations to when the ink hit the term sheet, Donut Media gained 80,000+ new subscribers).
With incredible backgrounds in both big media, the team is best positioned to bring Donut Media from an auto outfit to a global brand. Right now it’s automotive — but once the Los Angeles team has the creativity engine running, you’ll see them in every other media category too; Donut’s ambitions are quite tasty — to be unique media powerhouse that pumps out a variety snackable formats that millennials and gen-z will eat up.
Here’s to the future of digital media, and to the drivers, drifters, and car enthusiasts who love to tell stories.
Team Prototype Capital
