When Competition is Actually Good in Media
We’re taught in our careers that competition is inherently bad. We have to compete with everyone until there is only one business remaining. And in the case of some of the biggest success stories coming out of Silicon Valley, that’s true.
But for many other industries, it’s not. In many respects, competition can actually be a validator.
Just look at New York City. On 46th street between 5th and 6th, there’s the Diamond District. On 28th street between 6th and 7th, you’ll find the Flower District. And the Garment District has an incredibly dense concentration of fashion-related businesses.
If competition is bad, why do we see this happen?
There are two reasons. First, if an idea works well, it validates for others that there’s opportunity there. And, for consumers, the ease of going from one store to the other if they can’t find what they’re looking for is incredibly convenient.
With media, the same is true. I have found that some of the most successful publications are in niches that have more than one “paper of record.” Despite having competition, they are able to build thriving businesses. Then I see niches that only have one publication and they’re struggling.
Why is that?
This can be explained with a question. If no one is trying to build a competitive publication to yours, is it because you’re so good that they don’t want to compete, or is it because they don’t see opportunity?
If we think about all of the examples I listed above here in New York City, all of those second, third, and fourth store owners all saw opportunity being around competitive businesses. Yes, they would be jockeying for customers’ business, but they believed the upside was greater despite there being competition.
An example that I lived through was in the crypto space. CoinDesk, which launched in 2013, was one of the earliest legitimate media companies in the industry. By late 2015, it had nearly gone bankrupt. It was a free site in a market with very little ad revenue. It took a last-ditch effort with an event to keep the company running long enough to get acquired.
Fast forward to 2017/2018 and an advertising market had started to really develop. The event business was now thriving. And in 2018, The Block, Blockworks, and Decrypt all launched. A year later, The Defiant launched. They all appear to be doing well.
Despite all of this, CoinDesk has probably had its best year ever and will likely do just as well next year. In other words, the number of competitors has increased considerably and that has not interfered with its ability to generate growing revenue.
Crypto as an industry has been validated. From 2013 through 2015, it was still so nascent that the pool of prospective advertisers was simply too small. But by 2018, the market was ripe enough to support multiple, legitimate competitors. I would be surprised if we didn’t see more publications launch in the next year because of how much the legacy players have made.
This plays a big part in how I look at industries and job functions to launch new publications. If there are no competitors, I have to think very long and hard and try to determine why that is. Could it be that I’ve struck gold and found a great opportunity that no one else has? Or, more likely, is it simply that the industry isn’t a great market to operate in yet?
I’ve come to the conclusion that I never want to be the first to launch a publication in an industry. When I am assessing what new franchises to launch at Morning Brew, and I look at the competition question, I’m not looking to see if there are too many. Instead, I am looking to see if there are too few.
It might be counterintuitive, but I have no control over the competition. I can’t control what they do, so I use them for one thing: validation. From there, the goal should be to beat them by being better. And in the case of what we do, that’s telling better stories to decision-makers to help them make better decisions.
But I take this belief one step further with events. There are two schools of thought here.
One is that it is an opportunity for the hosting media company to dominate what’s happening on stage. Other press is barred from attending. The second is that an event should be treated as a convening of the industry and, therefore, is open to all who want to attend—including the competitive press.
I subscribe to that second school of thought. If we’re hosting an event, it’s because the industry needs it. I want other press to write about it. Hell, I want other press to be on stage moderating panels. Knowing that a rising tide lifts all ships, I want to make the event—and, therefore, the industry—as successful as possible. And that means welcoming, not excluding, the competition.
This runs counter to everything we’ve been taught in business. But the reality is very true. It is better to be seen as the tent, welcoming everyone, rather than a walled fortress, keeping competitors out. They tend to write stories about the event, further validating that it is an important part of the industry.
This idea does become a bit more complicated when you start offering premium products. But only to an extent. So long as you’re creating content that is unique and can’t be found elsewhere, people will pay for multiple sources. I’m sure many of you also subscribe to other media business-related products.
Competition is good. It validates. We should spend less time worrying about there being competition and, instead, focus all our energy on just building a great product. Do that and multiple publications can win.
Thanks for reading today’s newsletter. If you have thoughts, hit reply or join the AMO Slack channel to share them. Have a great weekend and see you next week.