May 16, 2023

Deals Show Niche Is the Path Forward for Digital Media

There is a lot going on in the world of media. Vice has declared bankruptcy. Forbes has a buyer (sort of). The Messenger launched its quest to become the next Daily Mail. There’s a ton going on. But none of it really matters. Not really. Because none of it is the true path forward for digital media.

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Now let’s jump in…


For the past few weeks, I feel like I have been writing an obituary. Between reviewing Ben Smith’s Traffic, talking about how the platform era is dead, and now this. I asked Google Bard to write an obituary on the scale digital media era, but, well, it wasn’t very good.

That’s why it’s so interesting to see The Messenger launch on the very same day that Vice declared bankruptcy. We’re trying so desperately to close the book on an era and here comes The Messenger smashing through the wall like the Kool-Aid man.

Rather than spilling a ton of ink about it, I would encourage you all to look at this Twitter thread by WaPo’s Engineering Lead for Privacy & Security Compliance, Aram-Zucker Scharff. Two words sum it up nicely: “Oh no.” I hate criticizing companies on day one, but wow. It’s bad.

Anyway… Why don’t we focus on some good news for the digital media world and show where the real opportunity exists.

Last week, Axios’ Sara Fischer published stories on two different companies that are both worth digging into. The first is that Blockworks has raised $12M at a $135M valuation.

The round is being led by 10T Holdings, a mid-to-late-stage growth equity fund, with participation from Framework Ventures, a venture capital firm focused on blockchain investments, and Santiago Santos, a crypto investor. Santos co-hosts a podcast with Yanowitz for Blockworks.

The firm, which is based in New York City, has been bootstrapped until this point. It raised $100,000 from family and friends at launch, but it’s resisted taking on any institutional capital, in part because “we’ve been profitable since year one.”

I’ve had a love/hate relationship with Blockworks over the years. While I was at CoinDesk, they were a competitor. And in the hyper competitive era of crypto, there was always a reason to hate the competition.

But watching the business grow over the past few years has been a real pleasure. The team tackled crypto from the perspective that the future of crypto was the professional audience. Yeah, it might have started with retail, but at some point, the institutional investor would show up.

Blockworks rolled out its Digital Asset Summit with tickets costing thousands of dollars. We tried to compete with our own institutional product, but we just didn’t know how to talk to those people.

The company has since grown to become so much more with different products serving different audiences—Digital Asset Summit for the real pro, Permissionless for the regulars. But more than that, it has become a true media company. It has a team of reporters covering the space and it’s trying to take things further with a robust research offering.

Do I think it’s worth $135 million? No, not in this economy. That doesn’t make it any less impressive because there aren’t exactly a ton of dollars going around for media, let alone crypto media. But do I think that it is in complete control of its destiny? Absolutely. It has figured out how to serve a specific audience with great information. And it has figured out how to do that profitably.

And that’s the real key here, isn’t it? Why is Vice going bankrupt? Why will The Messenger shut down? Why are all of these sites such a disaster? It’s because they never figured out how to serve a specific audience with great information while doing it profitably. And so long as that remains the case, valuation is just a number. The team only sold 10% of the company. They’re in complete control.

Then there’s MeatEater. According to Axios:

The company has been profitable every year since 2019, he added. “We expect that to continue to be the case.”

Bergsman was a founding member of The Chernin Group (TCG) and led its $50 million investment in MeatEater four years ago.

MeatEater will announce today its acquisition of Dave Smith Decoys (DSD), a leader in ultra-realistic hunting decoys and gear.

The MeatEater model is straightforward business. It built an audience of hunters and fishers. Once it had that audience, it began acquiring products that it could sell to those people. Here are a number of deals it made. In 2019, it bought Fire Lite, which creates hunting apparel. In 2020, it bought FHF Gear. In 2021, it acquired Phelps Game Calls. Each deal gives it more products that its avid audience will care about.

And that’s the name of the game here. Think about each of those companies MeatEater bought. How were they getting their customers? Facebook, most likely. That’s how all of these DTC brands sold their products. MeatEater can promote products through email or run ads across their platform; they can put the products into actual content. I’m sure the team still runs Facebook ads, but that’s in addition to the organic growth.

A couple of weeks ago, I wrote that real distribution allows for creative monetization:

This is the entire concept behind content to commerce. By building a dedicated audience with your content, you can then figure out how to push them down to more specific products. And while content to commerce is often used to describe consumer media, it’s not only that. Ultimately, figuring out distribution is the precursor to any sort of product sell.

What about any other magazine? Go to Barnes & Noble (or wherever you buy magazines) and look at the hundreds of titles. There are so many opportunities at the newsstand to create content to commerce so long as they have great distribution. The mistake most magazines make is they inflate subscriber numbers because they’re myopically focused on subscriptions. But for those that take seriously the quality of the subscriber, it becomes the bedrock for a solid business.

MeatEater has real distribution. And it has a secret tool for research: its own store. According to Axios, “the company’s online e-commerce platform, The MeatEater Store, today sells over 700 partner and specialty products.” If it sees a certain product or brand selling a ton, it can use that information to justify an acquisition. It might not work every time, but if the audience is already buying, that’s a great sign.

The question for MeatEater is what comes next. The Chernin Group has had a controlling stake in the business for nearly five years now, so I suspect it’ll want to sell at some point. But to whom?

If we assume it follows the Barstool model where Penn National, a major gambling company, acquired it for the audience, then the same could happen for MeatEater. Cabela’s, for example, might want to have a more direct relationship with its customers. But at this point, it’s pure speculation.

Here’s what I can say emphatically about Blockworks and MeatEater: digital media works. The data you can gather about your audience gives you an advantage print operators would have killed for. And more than that, you have the ability to engage through a variety of different content types. Vice, The Messenger, Forbes, BuzzFeed… they’re all a distraction. These niche companies are the future of media.

Thanks for reading. If you have thoughts, hit reply. Become an AMO Pro member to start receiving a second edition of AMO every Friday, an invitation to the AMO Slack, and priority access to the first AMO Summit on October 26th here in NYC. Have a great week!