Most entrepreneurs these days are influenced by the likes of Steve Jobs or Mark Zuckerberg, but that is because they’re building tech companies. For those who are building media companies, there’s a good chance that they look up to the likes of Walt Disney, William Randolph Hearst or Rupert Murdoch.
While it’s easy to discount some media moguls as soulless ghouls who are in it just for the money, the reality is that most are storytellers at heart. To quote recent media darling Shane Smith of Vice: “We are in the business of creating content so I better give a shit about that.” Indeed.
As a content company entrepreneur myself, I often wonder if online video content is well-suited to spawn the next Murdoch or Hearst. Given online video’s unique attributes, I sometimes doubt it. After all, traditional content companies created empires by cornering the four pillars of media: 1) content production, 2) distribution/audience, 3) monetization and 4) goodwill (brand equity).
Most video content companies control production but have all but conceded the remaining three pillars. After all, online video is a game of distribution over destination, with YouTube the 800-pound gorilla in the space, capturing the mindshare that traditional producers covet.
Also, with the Internet so fragmented, and online video still not matching lofty expectations, monetization leaves a lot to be desired. Producers who raised millions of venture capital to build sales forces simply failed to scale ad revenues fast enough, prompting many to retrench, or outright sell to traditional media companies that had more entrenched sales forces.
This doesn’t mean all producers have failed to build their brands. The original online video networks produced shows that created some goodwill, while the individual “YouTube Personalities” managed to create brand equity around their personas while leveraging YouTube’s growing reach. Time will tell whether it’s easier to build an empire by pursuing the company brand, show name or personality focus.
Judging by the most subscribed channels on YouTube, it’s hard to argue with personality-driven programming. Of course, the problem with personality-driven content is that it’s not a scalable or replicable business model. Historically, if you look at media entrepreneurs like Hearst and Murdoch, they are examples of builders who largely remained behind the scenes.
This phenomenon hasn’t been restricted to online video. In the sports business world, Roger Penske raced cars himself until he realized that he was better at the business side of things, so he got out of the cockpit to focus on deal-making. In other words, with only 24 hours in a day and only so much someone can focus on, I’m not sure it’s really possible to chase both fame and success, let alone money, too.
And speaking of money, while content companies take longer to scale, once they do, they tend to become profit machines. For example, William Randolph Hearst relied on a $10 million loan from his mother to launch his namesake company, but with determination he built a media company that eventually generated $10 million in annual profits. Hearst was known for being hands-off and behind the scenes, though he was intricately involved with most aspects of his publishing business. Murdoch, too, was notorious for hiring creative people but reserving the right to suddenly barge in and dictate orders on the finer minutiae of the newspapers he was publishing.
Time will tell if the “talent” can simultaneously — or in parallel — build a media empire. But if Hollywood is any indication, maybe online video will be run by a bunch of number crunchers before long. Oh, wait — maybe it already is.