How New Media Companies Are Eating a Traditional Lunch
It’s 1990 and the NBA has just finished a historic partnership with NBC, securing a 4-year broadcast agreement worth a staggering $601M. Onwards for the NBA. For NBC, they were ‘all in’, and back then it was a safe strategy. Purchase the fast-growing sports property and go to air, they think ‘we’re the only show in town - the audience will come.’ And then, like all broadcasters acquiring rights, the strategy becomes ‘drive everyone to the TV set’ and more often now, owned apps or websites. Times have changed. There’s a new show in town, and it’s right where you want it. A show which delivers alternative outcomes, different experiences, and increasingly more personal.
It’s the digital age of sport. In the first age of sport, it was about recreation & communities, the second age was building multi-billion dollar businesses, and now we’re entering the third age of sport. With this change of structure, the shift of power to consumers, and the available tools and resources, fast-growing new media companies with dynamic, low-cost, multi-revenue businesses are quick to build sizable audiences that would rival national networks. Best of all, they haven’t had to invest billions of dollars on sports rights. Think Overtime, the high school / amateur sports social media juggernaut delivering over 250M minutes of watch time per month across its branded social handles and YouTube. Overtime has raised over $35M in funding from NBA stars, MSG Networks, and Andreessen Horowitz since 2016. Or Playmaker, with their play on showcasing nostalgic, behind-the-scenes content, and relatable non-pro sports and gaming videos across their social media channels. With the brand's Instagram channels, they have a combined audience of 10M followers and received over 2.2B impressions in the past year alone. And let’s not forget the trendsetter himself Omar Raja, the then 20-year-old college sophomore who built the infamous House of Highlights. Originally built as a Miami Heat tribute channel, it’s become the NBA’s most-watched alternative. In 2016, ESPN hired Omar and partnered with HOH to rebuild their digital strategy across Sports Centre. In European football, there is 433, touted as ‘the home of Football’, now an Instagram machine with over 29M followers. With an army of 15,000 professional footballers following. 433 has developed unrivalled access to players' lives and produces behind-the-scenes content with a splash of humour. There is F2Freestylers, started by former semi-professional footballers - Lynch and Wingrove - who launched their Youtube channel in 2011. The channel has since exploded its audience size and reach, now generating over 2.5B views annually and 12M subscribers on their Youtube channel. F2F produces freestyle football tricks, tutorials with memorable cameos from football stars. They’re fast-moving, aggressive, and lean. They are not dependent on massive cash reserves to fund broadcast rights. They’re driven by a belief that young people (anyone under 30) are disenchanted with legacy media companies and want something different. These new media companies are driven by fundamental internet rules, or hard lessons they rarely negotiate. They distribute content only where their audience wants it, whether it's Youtube, Facebook, Instagram and now TikTok. They tell stories in a fun, irreverent way; and build a brand the followers can relate to. The stories are supported by micro-influencers, developed through the very channels they created; they talk on highlights, trending topics, and mash it all together. They invite user-generated content, openly requesting it through their public bio’s via direct message. These public submissions end up driving a large part of the content strategy.
They always have the fan at the centre of decision making. Community management is everything. They respond to everyone and celebrate their most loyal followers. They keep a low headcount, relying more on diversity of ideas through remote experts in design, video production and creative. They build personas which relate to their younger audience. It’s personable, fun, like someone you want to talk with. They use lingo that’s current and socially trending and they take a position. They don't sit on the fence. They’re fast to market, quick to adopt new channels and platforms. The production isn’t always Hollywood, yet it’s real and unreserved. For example, Overtime’s TikTok channel now has more subscribers than the NBA itself, sit on that. Measurement is not eyeballs, it’s not clicks, but about ‘impact’ and ‘disruption’, it’s about ‘how much are we shaping the conversation?’ and more directly ‘how much have we disrupted the conversation?’ It’s all business too. They’re monetising through multiple revenue streams. From eCommerce, events, branded content and advertising. With Overtime’s $55 hoodies, Playmakers trendy tees, and House of Highlights pullovers. Ecommerce is a big part of their business. And with Instagram's new shopping features this space is surely set to explode. Copa90, the football culture social media company went offline for both Russia and the France World Cups. If you were in Paris for the 2019 Women’s World Cup you may have seen the Copa90 Clubhouse giving fans a tasteful viewing event during the tournament.
Video has become a staple for many of these companies and Youtube continues to present a great source of income. In 2019, although Liverpool topped the league tables in Youtube revenue with over $664,000, F2Freestylers still trumped that with over $716,000.
Brands are taking notice to. The sell is about ‘scale’ and ‘influence, and less about impressions and clicks. Brands go where the hearts are, they pay a toll to be ‘in’ with what is considered the most influential consumers today. 433 have worked with Adidas, Nike, Puma, Audi and many professional football clubs. So what have they done that’s so transformational? Nothing. They just read the play. They realise driving traffic from social to an app is a waste of time, they know broadcasters are old and don’t reflect the ideas and attitudes of their audiences. They see less people watching long-form sports, and create alternative packages, short documentaries and a quick ‘take’ to get up to speed They recognise a brand needs to stand for something, even broadcasters. They make positions on public issues on discrimination or social injustices. They give the audience a voice and an opportunity to participate. They realise money doesn’t deliver an audience anymore. Better production doesn’t equal better performance. Authenticity over quality every day of the week. Most importantly they understand the entire business is driven by the connections they have with their audience. Community management is not an afterthought, it's central to their success. So lunch is shared. These new media companies will continue to grow, they’re small, nimble, adaptable and best of all they have an audience who wants them to succeed. Time will tell how they’ll navigate the changing social media algorithms, if they’ll get taxed by Zuck or if rights holders and broadcasters will tighten the screws of what’s copyright. Regardless, the attitude, the flexibility and the pulse on the audience they have will continue to give them an edge over adversity. Onwards.