FaintFlex Vol. 14 - Perennial Media Brands
They can be started in places you'd least expect them.
Welcome back to the sometimes weekly, sometimes biweekly newsletter of my thoughts around new media & personality-driven startups. Let’s dive right in. ☀️
Old School Insurance Company or Media Brand?
There’s been recent hype around VC-backed brands like Away & Quip expanding into insurance products to increase customer LTV, while generating tech-like margins.
But let’s not forget that they weren’t the first to do this.
For example, take Hagerty, a Michigan-based collector vehicle insurance agency that was founded in the 1980s.
I was faintly familiar with Hagerty after they acquired Techstars Mobility alumni DriveShare. But it wasn’t until car enthusiast Ben Bator alerted me of how robust their content marketing funnel was before I decided to take a closer look.
Hagerty magazine’s six editions from 2018 (Instagram)
Hagerty initially built the “unsexy” business of insurance in the flashy collectible cars market.
But they do much more to fuel car culture - they built the largest classic car publication & community in the world, which includes:
Launching Hagerty magazine in 2006, reaching a circulation of 450,000 paid subscribers receiving the bimonthly publication in 2016
Creating Hagerty Drivers Club, an automotive enthusiast community membership that includes access to exclusive events, special services, and a subscription to Hagerty magazine. The membership costs $45/year.
Hiring a top-notch editorial team of respected automotive journalists & personalities to publish nearly 9 online articles per day. They received 2.4M website visits in July 2019, which get funneled through their email newsletter
Building a YouTube channel to 850k+ subscribers, with their most popular series being Barn Find Hunter, which consistently generates 150k+ views
We’ve stayed true to my original goal of never really talking about insurance. Instead, we’ve used the best automotive resources available to give readers the best stories. In short, I was making the magazine I wanted to read.
- McKeel Hagerty, CEO of Hagerty (source)
As a result, Hagerty’s publication has become their main marketing channel, in which many people pay to consume. This sets them apart as the leading classic car insurance brand, even though they don’t oversell it.
Hagerty has been one of the few publications to actually grow over time while others failed to make the digital transition make sense for them. And it’s because their DTC content business became a supplementary revenue stream to their core insurance product.
If you’re consistently receiving amazing content you love from the same source, you’ll eventually look into who’s behind it. This strategy not only increases the loyalty of current insurance customers, but it widens their top funnel growth. You don’t even need to own a car to become a Hagerty Driver Club member.
Compared to car clubs around the world that have a relatively flat membership, we are a membership organization that also happens to sell insurance. That tends to create a an uplift to help us grow. (Source)
To withstand the test of time, media brands today need to be built on similar principles. Identify relevant, sometimes unsexy solutions to directly convert their audience from the beginning to supplement their sponsored content business.
This can be a product, premium membership, and/or an IRL experience.
Only then do you truly own your audience.
The Modern Day Media Holding Company
If Marie Kondo taught us anything, it’s that true happiness doesn’t come from having more things, but from having less things that are more meaningful to us.
Our minds can only handle so much before eventually becoming overwhelmed with options. We’d rather have a friendly, entertaining “expert” or curator that speaks our language for all of the things we don’t have time to personally become experts in.
The online homes of these curators become our favorite corners of the internet to spend time in. And the more personal the content, the more meaningful it tends to feel to the audience.
The challenge with niche online communities is they can become hard to scale over time with limited resources. And the upside usually isn’t large enough to meet the demands of venture investors.
In the past, we’ve had holding companies like Internet Brands address this by acquiring digital communities within the automotive, home & travel, health, legal, & diversified media categories to independently operate under a larger umbrella.
According to their website, the 63 media brands within their portfolio collectively generate 250 million monthly website visitors.
They also own a number of vertically-focused tech companies that can serve the audiences of of their brands, which helps to supplement any slowdowns in digital advertising spend.
Private equity firm KKR acquired Internet Brands in 2014, valuing the company at $1.1 billion.
But Times Have Changed
By clicking through a few of the Internet Brands portfolio companies, you’ll notice they don’t all feel native to younger generations. They share useful content, but they don’t necessarily meet today’s standards of generating brand affinity.
Can you imagine anyone buying Craftster merch? Their Pinterest still generates 5.7 million monthly viewers.
One of the recent players to adopt a thesis around this space is Attention Capital.
Attention Capital is a new holding company that buys, builds and scales media brands and the technologies that power them.
What we are doing isn’t new. Build strong brands around the vision of the founders. Provide support in technology, partnerships, revenue diversification and expansion both geographically and into new business lines. What is different is the rules by which brands, especially media brands, must be built and operated.
It’s clear that they are taking a page out of the Internet Brands playbook, only adapted to the current state of the attention economy.
I believe there is still a big opportunity to equip the long tail of digitally-native media brands (i.e. social media communities) with more robust operating structures. The current state of social media “influencer” networks still lack the ability to build strong IP.
And for personality-driven media brands, I thought Netflix might be best positioned to build the media holding company of the future.
But what’s interesting is Attention’s first deal was not with a digitally-native media brand.
Through a partnership with James Murdoch’s fund, they acquired a controlling stake in the Tribeca Enterprises, parent company to the Tribeca Film Festival.
At first I was confused. But if one goal of digital media brands is to build a community so strong, people would pay for IRL experiences, festivals are an interesting to space to build on. Another company that has followed this mold is BeautyCon.
Modern media holding companies will own & operate multiple vertical brands that can become the Hagerty of their niches.
It’ll be interesting to see how Attention Capital takes Tribecca to the next level, as well as their approach to expanding into new audience categories.
Understanding Jenelle Eliana
Since a FaintFlex subscriber graciously shared this Phillip DeFranco interview with 20 year old Van Life YouTuber Jennelle Eliana, I thought I’d share what made me believe the hype.
If you’re unfamiliar with her story, check it out here.
She’s a practitioner of minimalism, creative constraints, & living a purposeful life. As long as she stays true to this, she’ll maintain staying power because these are timeless, relatable & immediately accessible principles for all ages.
She does all filming & editing on her iPhone + a small mic & Moment lens.
She has a pet python named Alfredo.
She is her audience - 70% of her subscribers are women her age.
She represents a stark juxtaposition we really haven’t seen yet - a young, attractive black female happily living out of her car. If Lambo Grannies or Streetwear Gramps taught us anything, juxtapositions just work.
She can become the face of an emerging category that isn’t commonly accepted yet within the general public.
Jenelle is positioned so uniquely, I’m already imagining tons of IP opportunities for content & products she could eventually expand into.
Tweet of the Week
Couldn’t agree more. Checkout the collab here.
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