Talent-first media: the next great business model

How did we get here?

A wave of excitement powered a series of new digital media companies in the 2010s: wow, a lot of advertising is going to move to the internet, media companies benefit from all of that revenue in the analog world, so why not in the digital one? Thus were born dozens of new media startups all attempting at hacking distribution to generate as large an audience as possible to get a cut of that sweet, sweet digital ad pie. And the rest, as they say, is history. While TV advertising has proven a stalwart thanks to its pristine quality bar, just about everything else made its way to the internet. But, as we know, 99 cents of every dollar that did went to social media platforms rather than digital media ones. And with Vice’s bankruptcy, Buzzfeed’s broken IPO and the rest of the news, it seems as if we’ve reached the end of this decade long arc with one pessimistic last breath.

Why didn’t it pan out as we had hoped? The hypothesis that a media company can win on the internet simply by amassing a huge audience was largely falsified. With over 5 billion smartphones in the world, there was surely an opportunity here. The principal error: the barriers to entry to supply those 5 billion people with content also dropped to zero. Do you think I’d be allowed to write this if it hadn’t?!

The key missing ingredient: In its rush to compete for audience/demand by any means necessary, the industry overlooked the one asset it uniquely has access to: the talent/supply. The next decade will bear dozens of successful talent-first media companies that all start with one principle: if we can aggregate the best talent, put them front & center in perpetuity, the audience will follow, and so too will corporate success. If it wasn’t already clear, the day of the large, monolithic media brand that attempts to subsume the faces of individual talent is over.

What is talent-first media?

Broadly, I’d include any company who builds a group of existing talent in a specific niche, leverages that talent’s existing audience to build a brand, and then monetizes that critical mass of audience & brand in a way where the sum exceeds the parts — and in a way that creates a positive feedback loop. We’ll get into the specific playbook below but, for now, that’s all you need to know.

I’d encourage you, reader, to think broadly about this. Don’t confine yourself to things that look & feel like media companies as you know that term to be defined. If you’re doing it right, you’ll see this example everywhere. This model may sound old hat for some — and it is! The only unique insight here is that, relative to the opportunity and number of niches it can be applied to, the model is still dramatically underused.

Prove it! Show me some case studies.

I’ll illustrate with a few examples that, on the surface, are entirely different companies: Axios, Overtime, and Barstool Sports. While they’re all unique in how they put the pieces together, each of these companies is alike in their pursuit of talent as a first principle. Below I’ll dig into:

• Which niche they occupy and how they’ve expanded since

• What type of talent they employed

• How they convinced that talent to join in the first place (after all talent was talent beforehand)

• How they used that talent to growth hack brand & audience / distribution

• How they monetized for the company and the talent

• The ultimate outcome

(Google doc link to table here)

And don’t be fooled; there are many others out there. To name a few others.

• The PGA started as a member organization and aggregated talent (pro golfers), later layering in events and a league as we know it today

• Mr. Beast’s Night Media is turning YouTube stars into billion dollar retail brands and building a brand for themselves in the process

• Pocket.Watch, formed by an ex-Maker Studios executive (the OG digital talent-forward media model) is doing the same with children’s YouTube stars.

Who doesn’t fit the bill?

• CAA, WME, UTA (traditional talent agencies) partially fit the bill in that they do the talent side; but they are merely agents (in the principal/agent sense). They don’t leverage that

OK, I want in. What’s the detailed playbook?

If you studied the table above carefully, you undoubtedly noticed a handful of common threads across these seemingly different businesses. Let’s use those common threads, as well as a few other things thrown in, to construct a playbook.

Restated definition: Broadly, I’d include any company who builds a group of existing talent in a specific niche, leverages that talent’s existing audience to build a brand, and then monetizes that critical mass of audience & brand in a way where the sum exceeds the parts — and in a way that creates a positive feedback loop.

Step #1: Identify niche. It is much more important to aggregate a critical mass of the talent in one specific niche. If it works, you can always expand later. But, the larger the initial TAM, the greater the probability for failure, and you’ll never get to expand later. Overtime is a perfect example… it doesn’t get much more niche than high school basketball players, does it?

Step #2: Convince talent to join. We’re talking about convincing existing talent to join a brand new startup… why would they do this?! Turns out there’s a recipe for success:

• First, convince them that you can grow their audience even beyond their success to date.

• Second, offer them turnkey monetization and put money in their pockets.

• Third, cater to their pain points (if they’re professional writers, offer them an editor; if they’re athletes, offer them healthcare; and so on).

Important facet of this model: placing your talent front & center in perpetuity is essential. For a sports league, this is being a fan of Lebron vs. the NBA. For a news publication, it’s a specific journalist that you’re loyal too. And so on.

Step #3: Borrow your talent’s brand & existing audience to drive even bigger brand & audience. This is fairly tactical but makes all the difference: I’m talking about strategies like crossposting, collaborations, and content creation using your talent. Teamwork makes the dream work.

Intermediate outcome: So now you have a critical mass… you’ve aggregated a dozen influencers with 10K followers each and, all of a sudden, you wake up with 120K followers in your network and you’re growing fast because they’re all supporting each other. Time to secure the bag.

Step #4: Capture every single endemic advertising dollar out there. Endemic advertising would be like Salesforce advertising to a bunch of SaaS Sales leaders at a SaaS Sales conference. If you didn’t believe me about the “niche” thing above, now you probably see why it’s so important. Here’s the rub:

• You need to aggregate a critical mass of talent in a very specific niche

• So you can aggregate a critical mass of audience in that very specific niche

• So you can coopt brands endemic to that very specific niche to advertise to your audience via your talent for very high prices

Step #5: Build products for the superfans in your audience. By this time, you’ve likely cultivated a deeply engaged audience (both because you focused so relentlessly on a specific niche and because the nature of talent is that the audience develops intimate relationships with them). They will likely buy merch with your talent’s face on it (or name on the back if we’re talking sports). Pay room & board to meet them in person. And maybe even a monthly subscription for an in-depth experience.

Step #6: Spin the flywheel faster & faster and expand outwards into adjacent niches without losing the DNA of your first niche. It’s important to note that there probably is a natural ceiling to this. Overtime can branch out into other high school sports and, maybe even some professional sports, but not likely further than that.

The bottom line

While this is a post describing a media business model, the model can be extended much, much further. I’ve seen this model thrive in sports, news, culture, children’s programming, and elsewhere — but I’m even starting to see it appear in B2B SaaS, real estate, and elsewhere. If there exists:

1. Talented, recognizable individuals in an ecosystem

2. An audience who care what those folks have to say

3. Sellers of products who would like to sell them to that audience

4. And avid “fans” in the audience who would love to go deeper

Then this model is at play. Over the next decade, I expect a proliferation of the talent-forward model — and a lot of huge, sustainable media (and “media”) businesses to be built. Once you see it, you can’t unsee it… it’s everywhere… and where it’s not… it will be soon!