Revenue Mixology
Q1 2021

~news to move the needle on media revenue diversification with a twist~

From 2010 to 2014 there was a round of digital media consolidation with a simple goal: acquire scale as quickly as possible to have any chance of competing against Facebook and Google. AOL, Yahoo!, Comcast and Bertelsmann dominated digital media deals for several years with this goal. After some time, the two largest buyers even decided to join forces as AOL and Yahoo! each in turn fell under the umbrella of Verizon.

The successes and failures of the past few years tell a different story. Companies of all sizes, from The Washington Post and Barstool Sports all the way down to social media influencers like Cody Ko, show the value of revenue diversification. Companies that can build three, four or five revenue streams based on their audience and content are inherently stronger. They are better able to pivot toward growth in any of those business lines and are not subject to the volatility of advertising. This strategy requires operators to make investment decisions: to acquire these capabilities or invest in building them. Many media companies will decide that the most expedient path is to acquiring companies that have already established these additional revenue streams.        

While media companies are busy building or buying these capabilities, creators themselves are being given easier access to monetization opportunities through platforms like Substack and Stir Money. As this trend matures, the market for creative talent is becoming far more competitive. It’s crucial for media companies, and those that offer these capabilities to them, to follow these trends. 

Quarterly, this newsletter will look at M&A and capital-raise trends around the new tech stack that media companies are increasingly relying upon to build a more diversified revenue mix. We will bring you news from the vendors that are helping media companies build subscription, audio, experiential, social, affiliate marketing, and merchandising businesses, and who are quickly becoming just as critical as the ad tech platforms were that fueled the war for scale in the early 2010’s. In addition to M&A and capital raises, we will also look at industry growth trends and new product releases across the sector. And since this is the media business, we will have some fun as well – look for a great cocktail recipe in every issue. Come for the industry insights, stay for the mixology. 

In this issue we see what may be the beginnings of a consolidation in audio, the movement of Sprout into a dominant position in social, and massive growth in affiliate marketing tied to COVID. 

Read the full newsletter here