Don’t Get Distracted With Shiny Objects

A major problem with the media industry is we are like a dog on a walk. We’re going in one direction, enjoying the sun, when out of nowhere, a squirrel appears. And that squirrel becomes all we can focus on. We need the squirrel. And so, despite having been on a lovely walk, we completely change course and chase after that squirrel.

Many of us, including me, are like this. We have a game plan, we know exactly what we’re going to do, and then boom, something new and shiny pops up and we start to chase it. The industry is full of it. Creating search content, no wait, now it’s about social. No, actually, it’s all about video. Everyone needs an event. Subscriptions look cool. Commerce is interesting. What about a podcast? I know, we’ll launch a print magazine.

Many operators are guilty of this. I know I am. I’ve been pitched on launching a recruiting service, a high-priced CEO community, an early stage founder-only community, and the list goes on. And they all sound quite compelling. I have a ton of great readers here, so why couldn’t I act as a recruiter? Many CEOs read AMO and doing something just for them would be fun.

At the end of the day, they are distractions. They could be good ideas one day, but right now, they only get in the way of running the business. And that’s why the absolute best operators don’t get distracted. They run their playbook, do it as well as they possibly can, and ignore all distractions.

Just don’t ignore this distraction.

The AMO Summit is a blend of panel discussions about business strategies—events, ad sales, AI, and the state of media M&A—and one-on-one fireside chats about specific media companies. I’m incredibly excited because we have three fireside chats—I like to call them live case studies—with three incredible media companies.

1. Opening the event, we’re chatting with Allison Murphy, COO of Axios, about how AI is coming and how the business is shifting its strategy to prepare. What decisions are they making, and what are their thoughts on what will work?
2. In the afternoon, we’re chatting with Clayton Collins, founder & CEO of HW Media, a housing-related b2b media company that generates revenue with subscriptions, advertising, events, rankings, awards, and more.
3. Closing the event, we have Nick Thompson, CEO of The Atlantic, to chat about the turnaround at The Atlantic, the recent OpenAI deal, and where he sees the business going from here.

These are going to incredible conversions moderated by yours truly, so you’re not going to want to miss them. Buy your ticket today because prices go up in two weeks.

Okay, distraction over.

After I published Tuesday’s piece about print, a reader sent this to me:

I’d just say – each of these is a distinct business, with a distinct strategy. And conflating them and thinking all media should fit in one bucket has resulted in publishers with bad muddy business models and a lack of focus. That has often gone badly.

The feedback was great. As someone who writes regularly, it can be easy to say “this is the only way.” But in reality, various types of media companies can support various models. And the way that they start to struggle is, as this reader said, they lose focus. The outcome is that you’ve got a bunch of suboptimal businesses that are all technically generating revenue, but not at a level that you’d want.

Let’s take subscriptions, for example. Many publishers started launching these a few years ago. However, as time has gone on, they’ve realized just how hard it is to make a subscription work. John Yedinak, formerly at Aging Media, tweeted about that here.

Subs were all the rage these last few years but things are changing — 41% say they are no longer focusing on paid subs according to Digiday.

To be successful, you need to be 5-10x better than the competition, and the reality is most don’t have the teams to execute that well.

For a lot of pubs, the investment required won’t be worth the investment… even if you can convert 5-10% of your audience to paid.

That new rev source flattens out eventually and makes you think, is the juice worth the squeeze?

He’s right. Publishers thought they could just throw up a paywall and start seeing the money rush in. But it didn’t happen. And so, they start investing more money in better software or more editorial, hoping that they can convert subscribers. They waste money. And a few years later, they decide it’s not worth it and shut it down.

This loss in resources is pretty bad for any media company operating on smaller margins. Moreover, it’s bad because it diverted attention from the main business. What if you had, instead, doubled down on what was working? What if you had redirected all the resources from the subscription business to strengthen your core business instead?

Lack of focus hurts both from the perspective of known costs and unknown costs.

Think about Industry Dive for a moment. Sean Griffey and his co-founders launched in 2012. During that time, there were shifts to social, pivot to video, events became popular, and subscriptions were introduced. However, until its acquisition by Falfurias Capital and then Informa, Industry Dive remained predominantly marketing-driven. It didn’t lose its focus. When Sean was on the podcast in 2021, I asked him about this, and he said:

I think how we’ve been disciplined is sticking with its an easy answer. One is we’ve tried to be really disciplined. Two, I think we know we’re really good at digital audiences, and monetizing digital audiences. For us, the opportunity, we always see more opportunities. We’re not done with 20 markets right now. We’ll be in more coming forward. Cybersecurity launches in October, and we’ll have more in Q1 of 2021. We’re always going to do that because there’s still a lot out there. There’s still real opportunity out there. I do think we have a subscription business here.

I think honestly, we probably would’ve done acquisitions in the event space if it hadn’t been for COVID at this point. We were in deep talks with some events that I think would’ve fit nicely in our portfolio event companies. There may be a day when that comes. I think there’s things there that we can do. Subscription’s something that I’m always tempted by on some level.

Ultimately, what they found was that there was always more opportunity in what they knew. That was where all the opportunity existed. As he went on to say:

For us, can we walk and chew gum at the same time because there’s still a ton of opportunity in the things we know in front of us? One of the reasons we’re not done is we’ve been disciplined not to get distracted or not to lose sight of what we’re good at. We’re going to have to be very careful about how we set this up if we really want to tackle these opportunities.

This is a big reason that Industry Dive sold for as much money as it did. The buyer knew exactly what they were getting, the team was best in class, and didn’t have a ton of random things to integrate. It was a pure-play, focused business.

At some point, it makes sense to start adding new capabilities. The business matures and you have the resources in front of you. And when that happens, absolutely expand. This is especially true in b2b where we become experts on specific topics. Why shouldn’t we maximize our LTV of the readers? If I can get a CEO to buy a group subscription, come to my event, and hire me to one day be a recruiter, that single company could be worth tens of thousands of dollars in LTV. That’s huge.

But there is a time and a place for those new additions. And they need to be strategic. Jumping from idea to idea simply because it’s the latest concept ensures you have a bunch of tiny business units that can’t generate any material margin. Everything is a distraction. And unless you’ve got the resources to truly support these individual business units, it’ll do more harm than good.

I’d rather have one unbelievable business model than three sub-optimal ones. Yes, diversification matters, but we need to be smart about it. Crush it with one and then expand into others. Be myopically focused on what’s in front of you.

Anyone want an AMO magazine? I’m joking…

Thanks for reading today’s AMO. If you have thoughts, hit reply or join the AMO Slack. And remember, tickets for the AMO Summit increase in price in two weeks, so purchase yours today.