It’s been bleak for digital media. Headlines blare about fire sales of companies like Mic and Gawker, layoffs at companies like HuffPost and Vice, and consolidation rumours. The anticipated digital advertising boom hasn’t materialised, as most of the revenue is going to Facebook and Google and media companies have struggled to diversify their revenue with things like events, commerce, and subscriptions.
Still, it’s not all gloom and doom. Jon Steinberg’s streaming business news service Cheddar sold for a healthy $US200 million to cable company Altice USA, underscoring the value of live news for millennials.
Viacom plunked down $US340 million for Pluto TV, signalling a big market for ad-supported streaming TV. Spotify paid $US230 million for podcast company Gimlet Media, showing there’s value in media that commands people’s undivided attention.
And investors are pouring money into media companies they think will survive and thrive the upheaval. Some, like Girlboss Media, are tapping into people’s hunger for face-to-face community. Others, like The Athletic, are getting sports fans to pay for news with in-depth local and national coverage by established writers.
Business Insider asked more than 10 investors which media startups they think will blow up this year and why (most picked companies they have invested in).
Here are their picks, in alphabetical order:
Company: The Athletic
Recommended by: Daniel Gulati, managing director, Comcast Ventures
What it does: Subscription-based online sports media company founded in 2016.
Why it’s hot: “The model is a win-win for writers and fans: Best in class subscriber retention, and a virtuous growth cycle of greater demand scale leading to more quality content, attracting more subscribers,” Gulati said. “The bundle is growing to include podcasts, video and new sports, expanding the subscriber universe and delivering more value with each login.”
Recommended by: Andy Johns, partner at Unusual Ventures
What it does: Started in 2016, BallerTV is a live and on-demand streaming service where families can watch their kids’ sporting events. The company picked up Miami Heat’s Dwyane Wade as an ambassador and investor this year.
Why it’s hot: “What BallerTV has figured out from a technology and logistics standpoint is truly impressive,” Johns said. “They’re already live streaming and recording hundreds of thousands of games a year, making amateur sports footage broadly available for the first time. In the long run, I would expect BallerTV to be a top destination to see footage of amateur athletes, help coaches and scouts find the next great player they want to recruit, and build an amateur sports media empire on top of it to bring a modern media approach to an industry that is still exclusively covered by the local newspaper.”
Recommended by: Christie George, president, New Media Ventures
What it does: Started in 2014, Blavity is an LA-based media and events company aimed at black millennials.
Why it’s hot: “Black millennials have long been underserved by traditional media,” George said. “Blavity deeply understands its audience and has built a brand that audience just loves. From day one, the company has been focused on diversified revenue, protecting them from market shifts and the ups and downs of what new features or platforms are popular at the moment.”
Recommended by: Jeremy Liew, partner at Lightspeed Venture Partners
What it does: Started in 2016, Cheddar has thrived with the rise streaming services needing low-cost, live news content for millennials. It was acquired this year by cable provider Altice USA for a hefty $US200 million.
Why it’s hot: “It’s monetizing through advertising and subscription fees (from the distributors),” Liew said.
Front Office Sports
Company: Front Office Sports
Recommended by: Eric Franchi, cofounder, MathCapital
What it does: 5-year-old trade publisher covers the intersection of sports and business for sports business executives and curious fans.
Why it’s hot: “Adam [White, founder and CEO] has done so much in a short time, from audience to product to diversified revenue streams – sponsorships, events, etc.,” Franchi said. “I believe they are showing us what the B2B media company of the future looks like.”
Company: The Mighty
Recommended by: Kobie Fuller, partner, Upfront Ventures
What it does: The Mighty is a 5-year-old social network for people facing health and disability challenges.
Why it’s hot: “Already the largest online digital health community, The Mighty is on the path towards transforming how people will connect and grow with one another as they face struggles and opportunities for personal wellness,” Fuller said.
Gallery Media Group
Company: Gallery Media Group
Recommended by: Matt Higgins, CEO, RSE Ventures
What it does: Gallery produces coverage and podcasts focused on lifestyle and entrepreneurship and was formed in 2017 when VaynerMedia acquired women’s lifestyle digital media company PureWow.
Why it’s hot: “The executive management team at Gallery Media Group has shown they can build a profitable, sustainable business without venture capital injections and against market headwinds,” Higgins said. “They have capitalised on the whitespace for an array of niche audiences who weren’t being served enough content – think pop culture through the lens of entrepreneurship and avid cheese fans.”
Company: Girlboss Media
Recommended by: Heather Hartnett, CEO and founder partner, Human Ventures
What it does: Nasty Gal founder Sophia Amoruso’s 2-year-old professional network for millennial women, built around resources including online advice, podcasts, and conferences.
Why it’s hot: “Sophia’s created a community, and the media brands of the future need to have strong voice that resonates with a specific audience,” Hartnett said. “Sophia is judicious about putting brands in front of her audience. If you have that audience that’s loyal to your brand, you can have access to their life. It’s a new LinkedIn for their demo.”
Next Big Idea Club
Company: Next Big Idea Club
Recommended by: Karin Klein, founding partner, Bloomberg Beta
What it does: The Next Big Idea Club provides members with two new nonfiction books every season plus course materials, exclusive video shorts, and access to a discussion forum. Memberships support kids in under-resourced communities with coaching and resources.
Why it’s hot: “Hearing what’s recommended by Adam Grant (and Daniel Pink, Susan Cain, and Malcolm Gladwell) provides trusted perspective and ensures important big ideas surface from the deluge of content that’s part of our lives,” Klein said.
Religion of Sports
Company: Religion of Sports
Recommended by: Deepen Parikh, partner, Courtside Ventures
What it does: Cofounded by Tom Brady, Michael Strahan, and Gotham Chopra, Emmy-winning Religion of Sports is a collection of filmmakers, writers, and other creators who produce stories about sports’ importance to communities.
Why it’s hot: “There’s never been another time like this in terms of distribution channels,” Parikh said. “If you’re creating the most premium content, that enables you to get that premium audience and price. They have very strong trust and loyalty in the athlete community. They create content for passionate supporters, they are appealing to any sports fan, they’re getting paid by platforms. They can create direct relationships with consumers in the form of podcasts or video through their own platform.”
Recommended by: Soraya Darabi, general partner, Trail Mix
What it does: Tinyhood is a site that offers online classes, on-demand chat support with experts, and online communities for new and expecting parents.
Why it’s hot: “It’s like MasterClass for parents,” Darabi said. “It’s coupled with a price point that’s attractive and scalable, and it’s purpose-driven. The community’s online anyway. It could be rolled out to other verticals. And there’s a lot of drag-along revenue in ecommerce and affiliate plays.”
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