Minute Media’s plan to dominate sports coverage
In November, a company called Minute Media announced it was acquiring The Players’ Tribune, the website founded by Derek Jeter that regularly collaborates with pro sports athletes on first-person storytelling.
Though the name Minute Media might not be familiar to most people, chances are you’ve encountered one of the sites it owns, especially if you follow sports. Over the past few years, it’s slowly amassed an amalgam of sports properties that cover everything from global soccer to esports. It also owns Mental Floss, the quirky trivia magazine that was founded in 2001.
I recently sat down with President and CRO Rich Routman to discuss why he thinks Minute Media is different from many of the other venture funded digital media sites out there. We talked about the company’s video strategy, how it approaches advertising, and why it expanded into non-sports content when it acquired Mental Floss.
To listen to the interview, subscribe to The Business of Content on your favorite podcast player, or you can play the YouTube video below. If you scroll down you’ll also find a transcript of the interview.
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This transcript has been edited for clarity.
Simon Owens: Hey Rich, thanks for joining us.
Rich Routman: Thanks for having me. I really appreciate it.
So you’re president and CRO of Minute Media. What is Minute Media?
We’ve been around for eight years, really focused on building a global digital publishing business, but having technology be the core foundation to that scaling effort. With the business being grounded in technology and having our biggest office in Tel Aviv, we wanted to bring a different kind of technology lens to the publishing industry and not have to rely on any third parties to operate all facets of the newsroom. So we started initially in soccer, and then we expanded to e-sports and US sports. We made a few acquisitions. We also have lifestyle categories. But I would say at the core, we’re a technology business focused on digital publishing and it’s really enabled us to scale over the last few years.
So what you’re saying is, rather than taking an off the shelf content management system, you guys have built a publishing platform from scratch that is customized to your needs.
Correct. What we found over time was that other publishers liked what we were utilizing. Now if you kind of fast forward seven and a half years later, we have direct to consumer businesses where we obviously support those businesses through advertising and otherwise, but we also license our B2B technology to other companies. So it’s everything that’s part of the stack, not just the CMS; it’s the curation tools, it’s the distribution tools, it’s the product technology. So it’s all those things baked into a singular technology that we can use both internally and externally.
Tell me about the history. So did you guys start purely as a technology company and then start acquiring content publishers? You guys don’t just do technology, you also own a lot of individual publishers.
We grew out of Tel Aviv, we raised capital in Tel Aviv, we raised it in Germany. We raised in an Asia. Our first brand was 90min, which is our global soccer brand that operates in 13 languages. Everything from English to Mandarin, with content teams focused on those individual languages. You can’t do translation in soccer. It needs to have local dialect and local flavor. So over the course of a number of years, we realized that the technology that we had built was not specific to soccer. It obviously could work well in other verticals. So we expanded into US sports with 12up. We acquired The Big Lead from Ganette. We acquired Mental Floss a year and a half ago. We launched into e-sports with DBLTAP. And I think we’re starting to realize that publishing businesses need a lot of technology scale in order to operate efficiently. And now we can spread that scale across so many different assets, so long as each one of those content experiences can develop a large base of organic traffic over time. So for us, it’s continuing to find new brands now that we’ve really been able to grow the business to be significant.
So 90min was your initial publishing vertical? Did you guys acquire 90min or did you launch it from scratch?
No, we built 90min from scratch. In soccer there’s a lot of local publishers. So you have Sky Sports in the UK, you have ESPN FC in the US, but soccer is one of the world’s truly global games, and some of the best content is not created here domestically. It’s about the European leagues, about the Spanish league, it’s about the Brazilian leagues. So if you’re going to really be in the soccer business, you have to think global and apply it locally. So we thought there was a distinct advantage for us to really focus on global and acclimate locally rather than to do it from a singular desk in New York or Spain or otherwise.
Does 90min operate kind of like an SB Nation where there are specific team verticals or specific regional verticals?
We’re a little different than SB Nation where they operate a network of sites, and 90min is a singular site, but there’s 13 different additions of it based on the language that you choose to consume the site in. So if you’re consuming the Brazilian edition, obviously we’re going to focus on content in Portuguese around the Brazilian leagues. So I would say it’s a single site and multiple editions of the site rather than a network of sites.
And what’s your background? How did you come to work for Minute Media?
Yeah, so I’ve been in sports now for almost 20 years. I started my career as a legal guy at Skadden in New York and then I went over to the NFL and worked in the new media and legal teams for a number of years. And then a couple of us in the NFL started discussing the concept of a governing body that oversees the use of images and rights as it pertains to collegiate athletics. So a bunch of us got together and launched Collegiate Images, and we were lucky enough to exit the company in 2008 to a public company out of Canada called EXOS Technologies. And so I’ve really been a part of sports content and sports technology startups now for the lion’s share of my career.
After that I went and got Silver Chalice Ventures off the ground with a couple of great guys from Chicago. And then prior to Minute Media, I was part of the Perform Group, now known as DAZN, where we took what was inherently a betting business, predominantly overseas, and turned it into a direct to consumer publishing business where we made nine acquisitions over about 22 months, from goal.com to Sporting News in the US and built up a global direct to consumer publishing business to sit alongside the betting business that they were operating in multiple categories.
So you guys have raised something like $120 million in venture capital, right?
That is correct. We’ve raised a significant amount of capital, which is because we believe the opportunity for us right now is that there’s so many great assets in digital media and what you’re finding in digital right now is that everybody is really struggling to get to a profitable digital business, but we’ve built a great foundation. The business is working really well. We’re generating the right kind of audience where we’re scaling revenues at over 120% per year. And there’s an opportunity for us to utilize that foundation to expand into other verticals. The capital for the business is not necessarily used for organic growth. It’s more about trying to find unique opportunities for us on the M&A side, and we’re actively engaged in a number of those conversations.
You guys have acquired Mental Floss, which is kind of like a trivia magazine. You’ve acquired The Big Lead, which is a sports blog that’s been around for a while. You’re being floated as a potential buyer of The Players’ Tribune. We’ve seen a lot of these venture funded media companies going on acquisition sprees. Vox Media just bought New York magazine recently. Vice bought Refinery9. What’s going on here? Is this just about scale?
I don’t know that it’s exclusively about scale. I think that what we’re finding in the publishing industry, which is different than the print or television industry, is it requires a huge CapEx investment into technology to really operate the business the right way and to operate in a profitable fashion.
So for us it’s not just collecting content brands so that we can say we have this number of users. It’s actually scaling a good business. And I think that if you can actually approach publishing through the lens of how can we build a significant global and profitable publishing engine, I think that that’s the lens that we’re looking at the business through. I mean I think that the Vice acquisition of Refinery29 makes a lot of sense, but now you’re taking two nonprofitable businesses and putting them together. I think for us it’s about building a profitable media engine, having each one of the brands be able to stand on its own two feet and operate profitably and do the right things on content creation and commercial and invest in each one of those across a multitude of platforms from editorial to video to audio and just making sure that we can scale it in the right fashion. So for us it’s finding assets that have global implications rather than looking at a local asset that can work in a singular language.
Well I’d love to dive more into that about what you feel like you’re doing differently. Cause it seems like the market is currently challenging. For years, there was this idea that publishers can overcome these harsh conditions of internet advertising by buying more sites. We’ve seen Vox, Buzzfeed, Vice, they’ve all missed their revenue projections in recent years, especially after the Facebook bubble burst. Can you talk a little bit more about that? What kind of synergies do you feel you guys have that might be different from what some of these other big venture-funded players have?
First of all, the capital market informs that, right? Right now, unless you’re in commerce or subscriptions, if you go into a venture firm and you’re talking about an ad supported publishing business, there’s no money in the market to fund those businesses right now. So I think that consolidation is happening by virtue of what’s going on as it pertains to capital. You know, a few years ago when Vox and Buzzfeed were raising significant amounts of capital, the market was in a different place than it is today. So consolidation is coming on the heels of really what’s happening in the capital markets.
I think we have been strong at building infrastructure. We’ve been strong at building content operations that make sense and carry their own flavor to them. And we’ve been really proficient at monetization domestically, internationally, and in lots of markets around the world with a focus around video. A lot of companies have pivoted outbound with their distribution strategy, whether that’s with Facebook Watch or YouTube MCNs. Our focus from day one has been to build an on-website audience, because when you sell a deal, to have to split it up five ways is what creates that incremental EBITDA loss. And for us, if we can own audience across our own platforms, we can utilize our own technology and serving those audiences and we can bring that value to other brands. We think that’s where the future is. We’re building a platform and a platform that can host a lot of DTC, great brand experiences and hopefully continue to invest into them.
And I guess another differentiation for you guys from those others is that, aside from Mental Floss, ou guys are operating in mainly a single niche: sports. So do you feel like that gives you a lot of cross publisher synergy because you guys are getting a lot more crossover audience and advertising?
Yeah. I think at the end of the day, you have to find some area of your business to go deep into. One of the great business books I’ve read over the last few years is The ONE Thing and really great businesses have only been really great at doing one thing. And I think for us, if you put Mental Floss on its own separate shelf, we’ve been really proficient in sports and I think the deeper we can go into sports, not just in the US but in other markets that can make 90min stronger in Brazil or in France, I think the better organization that we’re going to become over time. So we think we have a significant advantage in sports, and we’re going to continue to try to find opportunities to grow it, domestically and otherwise.
So talk about about monetization. How are you guys bringing in the majority of your money? Is it through programmatic display or are you doing native? E-commerce?
I think that we kind of separate the businesses in two revenue streams. One of them is platform and the second one is advertising. So we generate a lot of revenues through our platform, whether that’s licenses with other media companies like Fanduel or whether it’s syndication that we do with small to midsize publishers.
So that’s one bucket and let’s just assume that that makes up 50% of our revenues. The other 50% is a combination of sponsorship that we do directly between brands and our teams in London, New York or Japan. We’ve really invested in commercial infrastructure in those markets. But at the same time we want to automate any type of advertising that can be automated and we want to focus our commercial teams in storytelling. So if someone wants to buy media, if they want to buy a rectangle or if they want to buy a 15 second spot, we believe the inventory can stand on its own two feet and we want to set up the right integration with the advertisers, share as much data as we can with that and allow them to make real time decisions.
So programmatic for us is not a fallback point. It’s a focus. When we’re doing a content focused program with a brand, the content sits at the front end and we iterate on the best idea that can showcase and leverage our audience in the most interesting way. But then let’s let all the media be conducted in real time on the heels of that. The two of them can be untethered, right? We believe that media is about audience reach. Viewability and a lot of the KPIs associated with the media part of the program are significantly different with the audience, with the KPIs that are posted with the content programs. So we like to separate the two. We’ll also say a really big differentiating factor for us is that we own really scalable video. I mean, in the US alone we do north of a billion video streams per month through our own video player technology. And as you know, video is the core of what advertisers want to buy. And we just happen to have a significant amount of supply that is owned and operated by Minute Media. So it gives our sellers a real significant advantage in the market.
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Ok, back to our scheduled programming…
So you guys are kind of doing the same thing that Vox is doing with Chorus, what the Washington Post is doing with Arc where you’re saying, ‘Hey, we’ve created this best of class publishing technology. We don’t want to keep it to ourselves. Instead of buying something off the shelf like WordPress, this is a highly specialized type of publishing platform. You can pay us some kind of licensing fee and we’ll basically white label this publishing platform for you that you can use with your own sites.’”
Yeah. And you could pay us a license fee if you’re a company that wants to operate on your own or you can take on a revenue share if you’re a company that really needs additional operational and commercial support. So we’ve also licensed our technology to other publishers at no fee whatsoever. Right? Because for us we understand audience growth, we understand infrastructure deployment. So I would say it’s either a SaaS model or a revenue sharing model and we’re open to either one of those as we look at technology across the industry.
So are you selling advertising on these other sites that use your CMS?
Where it makes sense. We’re absolutely interested in it. If it’s a premium brand and it makes sense to be part of our platform, yes, we’re open to selling advertising on that platform. If it’s purely us putting a display ad onto their site, we’re not interested at all. But if there’s a deep integration, I think for us it’s a natural extension to one of our owners and operators.
Would you consider yourself a video first company or a text first company?
I see the biggest piece of the revenue pie coming from video, but I would say we’re really a tech first company and that unveils in a number of different ways. We have made a big investment in the last four into video. And it’s because when we looked at the industry and we were evaluating the tools that we needed as a publisher, we saw a lot of desktop first video technologies and we’re a mobile publisher. When you really look at our traffic and our audience and how our users interact with our products. So we had the opportunity to buy a lot of off the shelf solutions. All of them are really solid. But we thought if we were going to really build this publishing platform, video played such a pervasive role in that, that we needed to build a product that really suited our needs from scratch.
And then again, much like our CMS and our curation tools and our other products, that turned into other opportunities for us to partner and provide that technology as a service to other publishers. So we’re kind of noticing that anytime we build something for ourselves, there are a lot of opportunities for us to share that technology with other partners. And we either commercialize the inventory or license it, but taking hold of that video inventory has really made our commercial proposition much more sticky.
So one thing that I’ve always wondered about is how, especially with video, does sports broadcast rights affect your coverage? Are you allowed to post clips and other visuals from games, or are you limited in that regard?
I think it really depends on the league, number one, and how they manage that intellectual property. One of the things that we’ve been very cautious around is building audience that is reliant on talent because then if you lose that talent or somebody else gets the rights, you may lose the entirety of your business. Yes, we have some premium rights inside of that video technology, but the video technology in its approach in terms of working with ourselves and with other publishers should never be reliant on a single channel. Whether that’s the NFL rights, the NBA rights, there’s enough good content out there to really be able to build a video proposition without having to rely on a singular individual or a single channel.
That being said, we’re always open to conversations with the rights holders. You know, you can’t utilize their highlights, their live streaming, whatever it may be without entering into a license deal. But so much for us is about semantic matching. We wanted to automate parts of the workflow where if one of our writers is doing a great piece on X, Y or Z to then have to go and find what’s the perfect clip to embed inside of this article. It could take 15 minutes, could take an hour and just slows down our editorial process because he wants to get working on his next great story. So when he is ready to publish that piece of content, the technology takes care of finding the most relevant video clip to link inside of that article. And if there’s a 90% match rate or better, that piece of editorial has video. And if there isn’t, it doesn’t. But we’re trying to make the process for even our editorial team a lot more seamless through utilizing a number of different technologies.
So just to kind of home in on what you’re saying, so let’s say your writer wants to write about this awesome catch that someone made during an NFL game, what are the difficulties of them posting a clip of that catch or something like that?
Well, it’s difficult. If you have the rights to utilize that clip, it’s no problem. But, you have to have an NFL license or an NBA license. And is that a domestic license, international license? Can you leverage that license on local media properties or one of your national media brands? Going back to my licensing days, which I spent 10 years in college sports licensing, the rights are carved up so many different ways that the usage associated with it could be narrow or wide. I think for us, if it is a video highlight that needs to be injected, then it makes sense, but in a lot of cases it isn’t because game recaps and game previews for the most part are table stakes. Our businesses and our direct to consumer brands, they’re largely lifestyle by nature at the intersection of sports. So I don’t think they’re going to find a lot of game previews and game recaps on any one of our sites. It’s an area where there’s already so much cluttered in our space today, that’s not a place that we’re going to differentiate. It’s also about off the field. It’s about their lives. It’s about what fashion they’re wearing on the way to the game.
Do you think broadcasting rights are experiencing a bubble right now, and is it just a matter of waiting for these bubbles to pop before smaller publishers can get in on the bidding for those rights?
Yeah, there’s an interest from the rights holders to create as much of a competitive environment as possible. I think the new platforms — Netflix, Amazon Prime, Facebook — getting into the bidding environment is good for the rights holders. That being said, if I watch TV, it’s for live sports exclusively. And when I’m not watching TV, for me it’s exclusively about the subscription platforms. I watch my Netflix, I’ll watch my Amazon, but I will say that even when I watch TV, it’s not as often as I did 10 years ago. And it’ll certainly be less often five years from now. So I don’t know if the bubble is effectively bursting as much as there’s a need for those television operators to build great experiences that are not linear channels. And I think if they do a great job, their ESPN+ or fuboTV or anybody else, I think that’s where my viewing habits are going to. And I think that’s going to change more than anything. The nature of the relationship that an ESPN or anyone else has with the cable operators is going to experience the biggest change over the course of the next 10 to 15 or 20 years.
So for the video, are you creating shows with repeatable formats? I’m seeing a lot of success with places like Complex Magazine, for instance, when they launched Hot Ones where the guy interviews someone while eating hot wings, or there’s like a sneaker shopping show where they interview them while they’re shopping for sneakers, or there’s Bon Appetit where they have all these very specific, repeatable formats where a pastry chef tries to recreate everyday candies. Are you guys creating repeatable formats where you have the same host, where each show is very similar to shows that came before it? What’s does your most successful video content look like?
One of the lessons we can take from television is you’ve got to produce pilots and you have to find formats that work. And if you find formats that work, those can become franchises. But I think that as a singular approach really doesn’t work. A guy in front of green screen and talking about last night’s game is probably not going to get it done. So what’s going to be your differentiator? And I think each one of our brands has to have formats that speak to the brand itself, that innovate on what other publishers in our world are doing and that can enable repetitive consumption, but also build a franchise over time. So I think if you look across, for example, e-sports, we’re doing lots of content with the players because one of the challenges in e-sports, which is different than the NBA, is if you asked an average e-sports fan, they can’t name five players. So let’s get people more familiar with those players.
When we talk about Mental Floss, one of our core franchises is a show called Scatterbrained. It’s facts about everything that people want to know. When it comes to 90min, it’s really about the fans’ perspective. So we have to find formats that make sense for us but also that makes sense for our brand and then tweaking them over time because if we’re not iterating on those formats, not even every single quarter but more like every single month or week and adding new features, then they’re probably going to get lost.
And what’s your view and approach to platforms like Facebook Watch and YouTube?
When we think about video, we don’t think about Facebook Watch and YouTube first. We think about what’s the video that works best for our owned and operated experience. We’re not thinking about Facebook or YouTube because we’re thinking about ourselves. I think that that’s where the publishing community has gone wrong, is that when they think about video, they think about other people’s platforms first, and when you do do that then you’re building content for somebody else. I want to build it for ourselves and I want to build it for our users.
So you’re consistently getting your users to show up on your website and push that play button on a video.
Yeah. I mean, I think Facebook Watch and YouTube are great places to showcase content, but then you’re building a syndication business. You’re not building an owned and operated business. And for us, if we can focus on content that makes sense on our hub, that content should also make sense for our syndication partners. But we always focus on the hub first.
So is that a matter of a windowing strategy, like putting it on the website first and giving it like a 12 hour head start before you post to YouTube and Facebook? Or is there a ton of video content that’s exclusive to the website that you refuse to post to YouTube and others?
I think it really depends. I mean there’s clearly formats that work for your commercial relationships with third parties. If I had to order our priority, number one is content that makes sense for the users that we own and engaging them every single day. If there are franchises that we also think could make sense on other partners platforms, that’s the secondary KPI. But for us, first and foremost, it’s about building franchise experiences on our owned and operated platforms. If there’s a huge license deal to be done with a Netflix or Amazon or Facebook Watch, we’re always willing to listen, but I think when you’re trying to grow a business like us and you’re trying to grow to the hundreds of millions of users and hundreds of millions of dollars in revenue, I think if you’re focused on a million dollar license deal with Facebook Watch that may be not the right focus for your business right now.
Why did you buy Mental Floss since it’s not a sports publication?
First of all, at the time we were definitely looking at broadening the business to include both sports and lifestyle, which we are today. Although a lot of our focus these days is going towards sports deals, we found that being in sports and in lifestyle at the same time had a lot of corollary benefits. Mental Floss was an opportunity that presented itself through one of our partners. It’s a brand that has been around for a long period of time, originally print then into digital, and just the volume of organic audience that they have and the sustainability of that audience was something that really attracted us. Their team is awesome. So when we sat down with their team and understood more about their content approach, how they were differentiated versus the other direct to consumer brands in their space, it was for us a quick conversation and it was the deal that we closed in 90 days, and it’s a business that is thriving now. They were stuck inside of an old print company, and it’s a business that we know can scale in markets like the UK and in Australia and perhaps in other languages. So it had a lot of synergies with what we did really well.
Is that a gateway into e-commerce?
Yeah. And Mental Floss is great in e-commerce. They are a product recommendation engine. It’s not an area that I would say we’ve exploited very heavily at this time. We actually brought Mental Floss back to print about six months ago through a commemorative edition that we did with Barnes and Noble. So I think that there are some one off opportunities for us with Mental Floss that don’t present themselves with other brands. Perhaps commerce, perhaps other platforms, but I think we’ve really focused on the core of doing content that makes sense for the brand, investing into audio, investing into other areas that the brand could grow, including the UK, where Mental Floss organically has almost two and a half million users and we really haven’t even touched the market yet. So I think for us it’s really just trying to find the areas that we know can scale up.
And e-commerce is a hard play for sports.
Really tough. Sports, yes, but politics is even more difficult. Politics just generally is very difficult to monetize these days, and I’m not so sure that Minute Media will ever get into politics and news. I think it’s probably an area we’re going to shy away from. But e-commerce and sports, unless you’re fanatics or unless you’re Ticketmaster or you have a huge partnership with one of those two guys, I think e-commerce in sports has its challenges even for the big media companies, you know, ESPN, CBS, Fox Sports.
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