Month: December 2021

Launch House, a California-based community and residency program for startup founders and engineers, is all about bringing people together. Co-founder Brett Goldstein sees the company’s shared houses as opportunities for both traditional education — in the form of talks and meet-and-greets with Silicon Valley leaders — and the sort of casual, but entrepreneurial brainstorming that led to the foundation of companies such as Meta and Microsoft. “There’s a reason why three out of the six most valuable companies in the world were started in dorm rooms, right? And it’s because people were surrounded by tons of ideas, super inspired during unstructured time,” Goldstein said. “So that’s basically why IRL [education] works, and the important thing about the metaverse is that it can unlock that.”

At the moment, this type of social collaboration is only available to Launch House members living near New York City or Los Angeles. To make their programs more accessible, Goldstein and his colleagues built a virtual location within the two-dimensional, browser-based metaverse platform Gather. The space is modeled after real-life universities, but it isn’t just a block of classrooms: much like educational institutions in the physical world, it’s also full of hallways and nooks where students can congregate. Goldstein declined to provide specific figures regarding the program fees for Launch House’s virtual experience but said that fees would be significantly lower than those of the company’s in-person programs, which currently cost between $4,000 and $5,500.

James Bore, a director of the Gather-based metaverse design firm ReuniVous, believes that the platform’s two-dimensional nature makes it more attuned to serendipitous interactions than more immersive three-dimensional platforms such as Roblox and Minecraft. “If you’re in a physical space, you have peripheral awareness outside of your vision; you’re aware that there’s someone standing just behind you, and you might step back to include them in the conversation,” Bore said. “If you’re looking at a 3D space, a lot of those peripheral sensory signifiers are gone, so you’ve got a much narrower view of what’s around you.”

Thus far, Gather’s most popular use case is co–working; at the moment, the platform is home to over 10,000 virtual offices, according to Gather community and growth manager Joakim Isoaho. But the type of social brainstorming that Goldstein desires is a form of co-working, and Isoaho isn’t surprised by the thought of people using Gather to recreate the experience of higher education. “I would be surprised if Launch House was absolutely the first in trying any of this out,” Isoaho said. “What they’re doing is bringing founders into the space; they have events around learning from each other. But it’s also co-working, it’s also organizing different kinds of events based on learning topics.”

Higher education has a long way to go before it truly enters the metaverse. Launch House is not an accredited university; though some colleges have experimented with metaversal events, such as the Minecraft commencement put on by the University of California, Berkeley, these time-limited experiences lack the serendipity that Goldstein and his designers hope to attain on Gather. Still, the proliferation of virtual offices and educational experiences on metaverse platforms is a sign that Zoom classes may become obsolete if virtual schooling extends through 2022.

“Virtual is the new reality,” said Omar Aloyoun, a startup entrepreneur and Launch House member who pre-registered for the company’s metaverse program. “So we are now in the real world.”

As a result, publishers that have some form of interest in the blockchain are finding themselves needing to educate their audiences about this new technology, in order to turn them into customers and participants of their blockchain experimentation. While Leaf Group is working to draw comparisons between NFT collection and investing in art in order to appeal more to its network of artists, Brit + Co and Turner Sports are leaning on education and rewarding participation in a way that makes learning about the blockchain less intimidating.

Not all audiences are going to be interested in delving into the nitty gritty of how the blockchain works (see our guide on WTF is the blockchain, if you are). But they will need to understand the different ways in which it can impact their lives if they were to buy an NFT from their favorite publication or take the time to participate in an event in the metaverse.  

“I think [the blockchain will] span every industry, ultimately, but your adoption curve is going to be driven by the perception of immediate utility, discounted for potential risk. I remember when people [thought] it would be crazy to use your credit card to buy something online,” said Sean Moriarty, CEO of Leaf Group. “The practical applications [of blockchain technology] are endless, but the rate of adoption is going to be driven by the early utility.”

Making the blockchain feel familiar 

Leaf Group is arguably in a position where the blockchain can be utilized rather effectively in its business and for its audience. As both the publisher of media brands Hunker and Well + Good, and the operator of art marketplaces Saatchi Art and Society6, commerce is core to its business — and turning digital art into NFTs makes sense. This is especially true given that one of the first things that comes to mind when people hear NFT is a picture, digital drawing or illustration.

The company’s first collection of NFTs called The Other Avatars under the Saatchi Art brand will launch in early 2022 and will consist of several digital art pieces that are reimaginings of artist Vincent van Gogh’s self portraits done by artists in the Saatchi Art network.

“The joke is, ‘Well, I can have a JPEG of this for free.’ But you can have a print of the Mona Lisa as well, but it’s not the Mona Lisa,” said Moriarty. Getting art buyers and artists alike to think about digital art as an investment piece like any physical piece of artwork is key, he added. 

Leaf Group’s Saatchi Art is known for curating and selling art from artists of all experience levels and popularity, meaning that the emphasis of what gets sold on its marketplace is on the art itself, versus who the artist is. The company plans to bring that same mission to the NFT collections it releases, ensuring that the digital art has the same amount of skill and intention as the physical art in its network, and using in-house experts to use their critical eye on these pieces. That way, Moriarty said, buyers can trust that the NFTs purchased are curated the same way the physical art is.

The actual process of buying an NFT, and creating an NFT, is not as simple as swiping a credit card, so Wayne Chang, gm of Saatchi Art, and his team are working on educational guides for the artists in network and for buyers to learn the basics. Lessons include how to set up a crypto wallet, and how to secure bought and sold assets to avoid hacking, as both the NFT assets and the payments that artists receive can be lucrative targets.

“This isn’t a one-time project drop,” said Chang. “There’s a bigger roadmap. There’s a vision to incorporate into the main marketplace.”

Empowering crypto-neophytes through education 

Four years after Brit + Co hosted a conference dedicated to teaching Brit + Co readers about cryptocurrency, the lifestyle publisher will continue the mission in the coming year, according to founder and CEO Brit Morin.

Brit + Co will focus on gamifying education by issuing tokens to students who complete each lesson, in order to discourage drop off. It’s a similar strategy to Decrypt, which earlier this year launched a rewards token to encourage the use of its app. 

“To be frank, there is real financial upside, like with every big new wave of the internet. That alone is why I’m so passionate about women and people of color understanding this, [because] this is the first time in history that [underrepresented groups] have not been blocked from entering this new multi-trillion dollar industry. And what’s holding us back? Well, we just don’t know enough,” said Morin, who recently cofounded an investment firm focused on supporting crypto companies.

Turner Sports is also taking a gamification approach to get people to invest in NFTs and even interact with other NFT collectors. Knowing that fantasy-sports participants and sports bettors share similar characteristics with crypto investors and NFT collectors, Yang Adija, svp of digital league business operations, growth and innovation, said he wants to find a way to bridge those two groups and created an NFT-based golf game that has real world value. 

“That’s one of the interesting things about cryptocurrency. It allows for users to engage in a game or sport and still have value with it,” Adija said during an episode of the Digiday Podcast.

The year in review

The key hits:

• Publishers’ emerging revenue streams remain works in progress.
• Media companies did not make full-fledged returns to the office.
• The shift away from the third-party cookie was delayed.
• Media companies scaled up, but not to the level that may have been expected.

After a year of unprecedented change for the media industry — and the entire world — 2021 was a year of relative stasis. Publishers’ workplaces remained largely remote, as did their events businesses. And while they continued to built up revenue streams to offset their reliance on advertising, those sources remained largely supplementary and suffered some setbacks.

Even the changes that did come in 2021 were more incremental than monumental. A major overhaul set in motion prior to the pandemic — the deprecation of the third-party cookie in Google’s Chrome browser by next month — was pushed back by two years. And while there have been some significant changes with media companies combining and going public, the impacts of those changes will not manifest until 2022 at the earliest.

How publishers worked to diversify their revenue in 2021

Advertising and consumer revenue streams remain pillars in the digital media space, but a lot of effort has taken place in the past year to make the consumer revenue piece more interesting and find new ways of generating money from readers. However, those emerging revenue streams also ran into headwinds in 2021.

Last year in the affiliate commerce space, we saw an inordinate number of publisher marketplaces crop up. In 2021, however, there has been a major shift to include more editorial voice in product reviews and ensuring that those marketplaces were not competing with a grid of products in the same vein as Amazon. Then as the year wore on, even more innovation took place to make online shopping more of an experience, like BuzzFeed devoting more effort into livestream shopping, and Complex Networks testing virtual product drops and a gamified shopping experience during its virtual convention ComplexLand. But, at the same time as BuzzFeed was further building up its commerce business — including by acquiring Complex Networks — its commerce revenue growth slowed in the second half of the year as supply chain challenges put a crimp in the business.

As for subscriptions, publishers saw a bit of a slow down when it comes to traffic and therefore subscriptions, something The Atlantic is now facing and trying to sustain the 50% growth it saw year-over-year from the first half of 2020 to the same period in 2021. The publishers that are combating this slump are focusing on exclusive newsletters and advice columns (The New York Times and Slate, respectively — and also Digiday) in order to attract new subscribers. The Times has also begun offering more subscriber perks to retain readers, including the ability to “gift” 10 articles per month to as many non subscribers as they’d like. 

But the most interesting way that I think publishers have been challenging and changing their consumer revenue streams is through blockchain innovation. NFTs have had an intense debut this year, with digital media companies releasing columns, images, gifs, articles and digital covers as virtual collectibles for their audiences to purchase. Beyond this, publishers like Decrypt have created crypto-based reward systems for readers to engage with their app and Turner Sports created an NFT-based golf game app called Blockletes to incentivize participation with real world value.

There is a lot more anticipation around the blockchain and what it will be able to do for the publishing industry — and to what extent it can become a consistent and sustainable revenue stream — especially in the coming new year that will start out with so much uncertainty. — Kayleigh Barber

The year of the RTO plans… that weren’t

Remember when we all thought we’d be back in the office by the summer of 2021? What a pipe dream we now know that was. 

As COVID-19 cases have ebbed and flowed, media companies were forced to delay, rethink or completely abandon their office return plans this year. Back in 2020, early 2021 was the target for reopening offices. But in January, those plans were pushed to the summer. By June, a number of publishers had set July as the start of a phased reopening and hybrid models were expected to be adopted by September. But by August, those timelines got put on hold due to concerns around the Delta variant. 

Now most publishers seem hesitant to commit to a specific date again, after the whiplash of changing plans this year. Companies like Forbes won’t require employees to return to work in person at all. (for employees desperate for a change of scenery, many companies kept their offices open on a voluntary basis this year.) And while some publishers like Politico, The Washington Post and theSkimm were determined to start the next phase of their return to office plans in early 2022, that may change with the latest news about the Omicron variant and it’s rapid spread. As this latest COVID-19 wave hits New York City, those in charge of return to office plans must be throwing their hands up in the air. – Sara Guaglione

The not-final year of the third-party cookie

Twelve months ago, publishers were preparing for life after the third-party cookie. They were building up their first-party data operations and assessing universal ID providers and figuring out their FLoC stances. Twelve months later, that work was not for naught, but its impetus has yet to come to pass.

Google’s plan to deprecate the third-party cookie in Chrome by January 2022 provided the marching orders for publishers’ programmatic advertising businesses in 2021. Publishers needed to finalize how they would develop other means of targeting ads to individual audience segments on their sites or how they would convince advertisers that contextual was not an unfavorable compromise. They also needed to determine which of the cookie-replacing alternative IDs they would opt to support — including what the trade-offs would be with respect to revenue, advertiser interest and site performance — and whether Google’s proposed Federated Learning of Cohorts (FLoC) would be among the options adopted. And they had to watch out for what privacy regulators — thawing from a pandemic-induced enforcement freeze — may make of these moves.

Then, Google pressed the snooze button in summer — seemingly thanks to the intervention of U.K. privacy regulators — and everything went into a holding pattern of sorts. Publishers have continued to push ahead with their preparations. Ask any publishing executive whether Google’s extension provides a wider window of opportunity to tweak their post-cookie strategies beyond whatever more makeshift plans they had previously put in place, and they will sidestep the question and inevitably say, and I quote, “We’re full-steam ahead.” And so they are into a two-year period, in which the circumstances are largely what they were at the start of this year — but under the closer watch of privacy hawks. — Tim Peterson

The year that publishers scaled up (somewhat)

At the start of the year, the water seemed to be sucking out to sea as the SPAC craze and pandemic-induced belt-tightening seemed to set up for a tsunami of consolidation that would remake the media landscape. That wave did reach shores in 2021, but the shoreline so far has remained in tact. 

While reports of publishers like BuzzFeed, BDG and Vice Media Group preparing to go public via SPAC IPO kicked off the year — with Group Nine Media spawning its own SPAC in late 2020 jumpstarting the expected trend — it was not until May that the corporate media landscape started to shift. First, Meredith announced it was selling its local TV business, leaving it with the publishing business that would eventually make for its own pretty purchase. Then came the Goliaths. AT&T announced it would spin off WarnerMedia to merge with Discovery, and Amazon announced it would pick up MGM.

And then came BuzzFeed’s announcement that it would be going public via SPAC IPO and acquiring Complex Networks in the process. The months that followed saw a spree of M&A deals that included Future acquiring some Dennis Publishing properties, Axel springer purchasing Politico and Dotdash swooping on what remained of Meredith. Meanwhile, Forbes followed suit with its own SPAC IPO announcement.

But then came BuzzFeed’s SPAC IPO, which saw it lose 94% of the funding it had been slated to raise and then saw its stock market price fall by 39% in its first week and reportedly may see Forbes scuttling its own SPAC IPO plans. The M&A wave was not over, though. Vox Media and Group Nine capped off the year by announcing their merger. However, at the start of the year, both organizations seemed to be in position to independently go public, a sign of the extent to which things changed in 2021, if not at the scale anticipated twelve months ago. — Tim Peterson

What we’ve heard

“Not pretty.”

— An insider’s assessment of Xandr’s 2020 financials

Numbers to know

$620 million: The valuation of Forbes Media by Investment firm GSV, which is working on a bid to buy the media company as an alternative to Forbes’ announced SPAC merger.

115: Number of publications that are part of Facebook’s newsletter program Bulletin.

$63,000: Minimum salary that Vice Media Group has agreed to pay as part of a deal signed with its employees’ union.

What we’ve covered

Microsoft buys Xandr, ending AT&T’s ad tech bet that never really paid off:

• Three and a half years after acquiring AppNexus, AT&T is effectively exiting the ad tech business.
• Nine and a half years after writing down its aQuantive acquisition, Microsoft is effectively returning to the ad tech business.

Read more about Microsoft’s Xandr acquisition here.

Many publishers can’t reach most of their audience with alternate identifiers:

• Some publishers are unable to reach at least half of their audience through alternate IDs, according to a Digiday Research survey.
• Other publishers said they are unable to reach any of their audience through alternate IDs.

Read more about publishers’ alternate ID issues here.

BET’s Scott Mills shares plans for BET+ in 2022 and why the network has formed its own studio:

• BET plans to test an ad-supported tier, the network’s CEO said in the latest episode of the Digiday Podcast.
• BET also plans to sell a subscription bundling BET+ and Paramount+.

Listen to the latest Digiday Podcast episode here.

Why a leading esports organization is inviting its players to become investors:

• Team Liquid has expanded its ownership group to include five of its most prominent team members.
• Each player used their own money to purchase shares of the company.

Read more about Team Liquid here.

What we’re reading

What’s next for The Washington Post?:
The Trump slump is pushing The Washington Post to stretch beyond politics to reignite digital subscriber growth, according to The Wall Street Journal. Other news publishers are dealing with traffic dips this year, but as a publisher specializing in politics, the Post seems acutely impacted, with subscribers and non-subscribers alike visiting its site less often.

The New York Times may buy The Athletic after all:
Acquisition talks between The New York Times and The Athletic are back on, and the companies are in exclusive negotiations, according to Puck. It’s unclear what exactly would have brought the Times back to the negotiating table. The dealbreaker previously was reportedly a disagreement on The Athletic’s asking price.

Google News Showcase struggles to win over U.S. publishers:
Google has been talking with publishers about rolling out its News Showcase program in the U.S.but is receiving pushback for making lowball offers to pay publishers, according to Press Gazette. Google has offered some publishers $200,000 per year, whereas the publishers expect to receive at least $1 million annually.