DEEP DIVE

15 rules for media companies

Media has changed.

The old rules and strategies don’t work anymore. In fact, if you copy what most legacy media companies do, you’re doomed to fail.

Here are the new rules on how to start and grow a media company in 2024:

1) Understand the difference between an owned audience and a rented audience

Owned audience = People who have given you permission to communicate with them directly. You have direct control over how and when you reach them without relying on a third party. You can also collect and store your audience data, such as engagement, location, interest, purchase behavior, and more.

Examples:

• Email subscribers

• SMS subscribers

• Podcast subscribers

• Private communities (depending on the platform)

Rented audience = People you reach through platforms or channels you don’t own. This audience is "rented" because you use the platform’s audience to deliver your message. The platform's algorithm or gatekeepers determine the reach of your content.

Examples:

• Search (Google, Bing, etc)

• Video platforms (YouTube, TikTok, etc)

• Social media (Instagram, Facebook, X, etc)

2) Build an owned audience with email, SMS, or podcasts.

Your primary content channels are newsletters and podcasts. These are the channels you’ll use to retain and monetize your audience.

All your content creation efforts outside these channels should focus on directing people to them.

Email, SMS, and podcasts are the only way to reach your audience directly without algorithms interfering.

Your newsletter and podcast should be free and monetized with ads. Don’t put this type of content behind a paywall.

3) Start with an email newsletter.

Email is the best-owned audience channel, and newsletters are the best way to get readership in the inbox.

Use your newsletter to grow your podcast or SMS list later.

4) The purpose of your website should be email capture.

Use a website and blog. Optimize for SEO. Work to grow traffic. However, ensure the #1 goal is email capture — growing your owned audience.

The metric that matters is email subscribers from your website — not page views.

5) Collect first-party data. Know everything about your subscribers.

First-party data is information a company collects directly from its audience and customers.

This data is the most valuable and reliable because it’s directly from the source.

Use first-party data for personalized content, ad sales, targeted ad campaigns, segmented email and SMS broadcasts, and automations.

After you capture an email, collect information like interests, job title, company name, job level, location, industry, phone number, etc.

6) If you’re starting a media company, use social media as your discovery channel. Not SEO.

Google doesn’t care about new websites. You’ll get traction faster with social media. Pick one social channel to start with and post daily.

After a year of creating, start optimizing for SEO with your content library.

7) Email automation works for you while you sleep. Use it.

Most media companies almost exclusively use broadcast emails and newsletters.

They’re missing a huge opportunity.

Set up email automation to:

• Onboard new subscribers.

• Send cart abandonment reminders.

• Drive email subscribers to your podcast or community.

• Re-engage and win back subscribers who stop opening.

• Get feedback and data from your audience with surveys and polls.

• Sell your products to subscribers who are engaged or show product interest.

• Congratulate subscribers on milestones like one year subscribed or 100 emails opened.

• Send an email after a critical action or event, such as a poll response, referral, or survey completion.

Here’s my email automation guide.

8) Start a free private community after you hit a critical mass audience.

This is another owned audience channel you can later monetize by making it a paid community or part of a membership with additional features.

Wait until you have 10k-20k email subscribers to do this.

Also, pick a community platform that you have control over. I like Circle and Slack. Building a Facebook group or Discord channel has more platform risk.

9) Be hyper-scale or hyper-niche.

You should have an audience as broad as the New York Times OR as niche as Industry Dive brands.

Don’t be in between.

• Advertisers want hyper-scale — the ability to reach millions or tens of millions.

• Or hyper-niche — the ability to reach a targeted high-value audience.

10) There are two ways to scale niche media.

• Go horizontal and build a house of niche brands.

Industry Dive (acquired for $525M in 2022) has 37 niche B2B publications on agriculture, automotive, banking, construction, cyber security, HR, healthcare, and more.

• Use Negative CAC to scale vertically by selling products and services to your audience.

Negative CAC (customer acquisition cost) is the strategy of using media monetization (advertising) to finance audience acquisition.

Then, once you have an audience, sell a non-media product or service to your owned audience.

You can also build a house of brands and use negative CAC.

11) Negative CAC is media’s moat.

With negative CAC, you make money off your marketing.

Negative CAC is a content-to-commerce business model. By using advertising-supported media or selling information products, you can drive the top of the funnel for another business.

• Russell Brunson used negative CAC to bootstrap clickfunnels into a $360 million SaaS business.

• Greg Fuller used it to grow FreightWaves SONAR into a $30 million SaaS — built on the back of their media operation.

• MeatEater used negative CAC to reach $100 million in revenue.

• Doug DeMuro used his YouTube audience to grow Cars and Bids — a car auction marketplace — and sell it for $37 million.

• Kevin Espiritu has grown Epic Gardening into a content-to-commerce machine, which recently received a $17.5 million investment from The Chernin Group.

Check out more examples of negative CAC in my podcast here.

12) Understand that open rates are now bullshit.

Apple mail privacy protection made open rates unreliable. Now, clicks should be your #1 engagement metric.

If subscribers aren’t clicking, they have no value.

90% of newsletter advertisers only care about the clicks, cost per click, and conversions they get from you.

Stop using growth channels with low CTRs. Your total subscriber number and open rate don’t matter.

What does matter is:

• Clicks you drive to advertisers.

• Purchases you drive to your own products or services.

13) Don’t be just a newsletter.

Start with a newsletter. Be newsletter-first. But don’t be a newsletter-only.

• Build your rented audience on social media to increase brand awareness and drive more email subscribers.

• Start a podcast, SMS list, or private community to diversify and expand your owned audience.

• Build a website, blog, and follow SEO best practices.

14) Consumer subscription businesses are a trap.

Don’t start a paid newsletter or content subscription for consumers. Putting your best content behind a paywall is a bad idea.

• It’s difficult to scale customers at the $50 to $199 per year price point of most consumer subscriptions.

• Most consumers don’t pay for content. Think about how many newsletters or websites you pay for. Probably not many.

Most media companies would be better off making all their newsletter, website, and podcast content free and monetizing it with ads.

Then, sell a smaller percentage of their audience higher price products like:

• Live event

• Online course

• Agency service

• Coaching program

• Physical products (e-commerce)

• Private community or mastermind

15) You need multiple revenue streams

In media, revenue diversification is a good thing. To scale, you’ll need multiple revenue streams like:

• Events

• Licensing

• Sponsorships

• Info products

• E-commerce

• Subscriptions

• Memberships

• Lead generation

• Affiliate marketing

Many media companies declined in revenue by 30%-50% (or more) in 2022 and 2023 simply because advertising CPMs declined by 30%-50%.