7/ This is where we conflate "popular" with "necessary" or "valued". This doesn't mean the content was bad it often was superb – but if it doesn’t change viewer habits, if traffic is just a question of virality and timing and Facebook, that’s not a biz / audience you can sell
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8/ Put another way, Facebook might have been unfair and a bad partner, but if an algo or priority change at the company costs a web publisher 30-50% of their traffic, who was really responsible for most of the publisher's success or revenue or value?
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9/ FB and VC funding rarely kills a business that fulfills a real need. There are important proof points. The most scaled, best funded, most successful publishers (BuzzFeed, Vox) are still struggling to be profitable; it’s contrarian to assume smaller generalist can via editorial
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10/ In fact, all of these brands are seeking profitability by getting out of D2C distribution, preferring high margin TV/film production businesses (e.g. selling a show to Netflix) or podcasts
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11/ More broadly, even the most successful scaled publisher – New York Times – has only 2.5MM digital news subs (Netflix, Spotify, etc. add this almost monthly). That’s only $300MM in revenue, and a $4B enterprise value business.
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12/ Few would say that a highly fragmented market where the clear leader puts up those numbers is a good one to enter.
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13/ Compare this to other digital categories with a high volume of entrants, such as D2C consumer goods (e.g. Warby, Harry's, Gilt, Movement, Bevel etc.). Many have failed, many more will – but they’re competing with an incredibly valuable category with $100B incumbents
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14/ I don’t think Facebook has ever managed its media business well, especially with partners. And made many unforced errors. But no one *pivots* from a highly successful business to a speculative one. You pivot from one that doesn’t work in the hopes that another will
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15/ When web publishers jumped after digital video, they were often promised an opportunity that didn’t really exist, but they pivoted because text wasn’t working. Else they’d have just *expanded* to video
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Replying to @ballmatthew
I really have to take issue with this framing, becaust what we're really talking about the difference between steady business vs. potential gold mine, such as the facebook inflation made it seem. Moreover,
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It's pretty worthless to talk about any of this without talking about the way that younger demographics played into the entire conversation, where everyone was mostly trying to get in with that demographic. Everything you're saying is true, it's just ignoring the most imp. parts.
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