DEEP DIVE
Media is an amazing model, but most people do it wrong.
If you’re building a media business, a newsletter, podcast, or audience of any type — here’s what you need to know about the business model.
The good, the bad, and what most people mess up.
We’ll start with the good stuff…
Why media is great
Build trust at scale
With newsletters, podcasts, videos, blogs, and events — hundreds of thousands or millions of people can know, like, and trust you and your brand.
Until the internet this was never a possibility for an individual or small team.
Leverage
Media has no marginal cost of replication.
This means the cost of producing an additional unit of a product (or piece of content) is effectively zero once the initial creation has been made.
With media you create once — then your content can be distributed (or sold) forever.
Leverage is the only way to create wealth. It’s force multiplier.
The only forms of permissionless leverage are code and media. Most code (software) is becoming commoditized with AI.
Truly unique media (content) is the greatest form of leverage a founder can have.
Unit economics
Media companies sell products with no marginal cost of replication.
Advertisements and sponsorships
Digital products (paid content, subscriptions, courses, memberships, etc)
These products have near 100% profit margins.
Yes, you’ll need a content team, a sales and marketing team, administrative costs, tech and software infrastructure.
But it takes approximately the same amount of time or headcount to:
Create content for 100 people or 1M people
Deliver a digital product to 100 people or 1M people
Sell a sponsorship that reaches 100 people or 1M people
You don’t need a bigger team or more capital to scale.
If you can build an audience and sell, your unit economics will be world class.
Organic growth
If your content is valuable, it will be discovered and shared.
Your audience and business will grow without spending more on marketing.
That sounds trivial but nearly every traditional business needs to spend more money to scale. Media businesses can grow organically.
And if a media business chooses to use paid marketing, its effects will be amplified if they’ve built an organic audience already.
What most founders do wrong
Here’s what’s wrong with most media businesses…
Platform risk
Most media companies don’t have a direct connection with their audience.
They rely on platforms like Google search, Facebook, Instagram, Twitter/X, and others to connect them to an audience.
They overlook (or don’t even use) the 5 owned audience channels:
Email
Podcast
Community
SMS
Print
No channel is perfect, but these channels allow you to reach and broadcast to your audience directly with less interference from algorithms and gatekeepers.
Data risk
Because most media companies don’t have a direct audience relationship, they also don’t know and understand their audience.
They see impressions, followers, and traffic. But not the real people behind the metrics.
Great media companies collect first party data and talk with their audience.
They incentivize their audience to register on a website where they can collect their email, name, phone number, job title, company, and other survey responses.
With this data they can better engage and monetize them.
Then, they talk with their audience. At events they host and through interviews, surveys, emails, comments, and polls.
Client risk
Most media companies don't know their clients.
They generate revenue with third-party programmatic ads.
Media brands never actually interact with the advertiser (the client) directly. The ad is bought and sold on a platform the publisher has no control over.
If you don’t know the client, you can’t serve them. There’s no way to work directly with a client to measure and improve ad performance or increase client LTV.
And there’s not the only risk…
What happens if an ad platform goes away? Or ad rates decreased by 20%-50%? When ad rates decline your entire business goes down with it.
Instead, work with your clients directly as a marketing partner.
Revenue risk
You'll never unlock your audience's true revenue potential without a product to sell them directly.
Your media business should have the ability to:
Monetize 100% of your audience with sponsorships.
Monetize 1%-10% of your audience to a higher degree by selling a product to them directly.
Having one without the other is a risk. Even with direct sponsorships you have little control over advertising budgets and ad performance after the initial click.
Content risk
Most media companies have at least one of the two following content problems:
A) Commoditized content
The content doesn’t stand out from competitors or AI generated content.
If your audience doesn’t seek out your content — if they don’t have a habit of reading, listening, or watching — you won’t survive.
The solution is to be indispensable. Deliver what no one else can. If your content is unique and solves a real problem, you’ll win.
B) Fresh produce problem
This is the news business. Everyday you must publish more news to stay relevant. Your content goes “bad” after a few days.
Producing news requires constant work and a large editorial team
Instead, focus on evergreen content with insights, a unique POV, and infotainment. Do this and your content will be relevant for months and years after it’s published and it can be repurposed everywhere.
The new media model
What I've shared here is easier said than done.
Media has been disrupted in the past two decades. By the internet, then social, search, and AI. There are very few role models new media founders can emulate.
Yet, media businesses are incredibly valuable if done right. And with all the uncertainty around media today, now is the best time to build.
If you're serious about building a media brand bigger than yourself and with more channels than newsletters or social media — I’m hosting a free workshop and discussion on this topic next week.
Join a small group of media founders and creators building for the future:
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