WatchMojo’s global reach during the first quarter of 2019 surpassed 250 million unique viewers. Truth be told, it wasn’t the first time… we have been over that mark for over a year, but it was the first time I noticed. We were in a meeting when my colleague was taking us through a report when the number jumped out at me. I was speechless, which for me is a miracle.
Being conservative, we discounted the number to account for possible duplication, but after accounting for our reach on Snapchat and Facebook, effectively we reached over a quarter billion people.” Billion, with a B. It’s a surreal milestone consider I invested a whopping $250,000 in the company in 2006. Our peers in the third wave of digital video producers Next New Networks and Revision had raised $10-25M. Others in our cohort raised up to $100M, let alone how more recent contemporaries and larger digital media companies like Buzzfeed or Vice raised $500 million and $1.4 billion. Even when the media discusses companies who eschewed venture capital it turns out they raised a ton of it: Complex raised only $40 million, but post-sale for some $300 million to Verizon/Hearst, Verizon spent $150 million more via its Go90 initiative. Nieman Lab recently talked of Bustle as if it shunned VC then happened to drop that it had raised $50 million (founder Brian Goldberg corrected the interviewer that it was in fact $80 million).
Honestly, you need financing to grow a big business, at least when measured by top-line. VCs talk of “lifesyle businesses” with a disdain that makes you think it references something Stalinesque. I call it a “boutique business” but I assure you 99% of founders and CEOs today dream of the possibility to run smaller, independent businesses without the “growth-at-any-cost,” “greed-above-all” imperative.
We have been profitable since 2012 even though our top-line isn’t that large… we have some 60 employees (100+ including freelancers) but I would surmise that by any indication, we have colossal reach that few content producers (traditional or new) offer, and one that even aggregators would envy (unfair comparable perhaps, but for purposes of illustration WatchMojo reaches more unique viewers than Netflix has paid subscribers).
YouTube as Global Stage: Creativity Travels
Half of WatchMojo’s audience is in the US, the rest is global – by design. That strategy confounds most because international audiences are not as lucrative as American ones.
When we launched in 2006, our strategy didn’t make sense to most, either. There were days, frankly, when I didn’t know if the strategy would pan out (it didn’t help that we got blindsided with a frivolous lawsuit claiming I had violated my non-competition agreement; which I wasn’t, and in which we finally prevailed, but still…).
I started the company with my wife Christine, recruited three young graduates as co-founders and then bootstrapped the company to break even in 2011, before it took off like a rocketship in 2013 – remaining profitable ever since.
Warren Buffett argued that “you don’t know who’s swimming naked until the tide goes down,” YouTube proved that “if the audience is real, the economics will follow.” As it replaces television as the leading consumption platform, it’s emerged as ground zero for the $75 billion video advertising market.
Prescient or Lucky?
We have demonstrated an uncanny ability to skate to where the puck is headed.
When Google bought YouTube in 2006 for $1.6 billion, it was the largest video platform and second largest search engine, but the deal was widely ridiculed. On my then blog HipMojo (extra points if you recall that!), I’d published a piece suggesting YouTube was profitable if it wanted to be (it wasn’t, but could have been by running display ads), arguing it represented the future of media. On that I was 100% correct!
So long as the “big bet” is right, I think entrepreneurs are good at eventually figuring out the details. We recognized early on that i) storytelling was moving to video; ii) YouTube was emerging as the leading video consumption platform; iii) mobile engagement would explode off 5-10 minute videos; and iv) “platform/format” fit would prove crucial. Mind you, I coined iv) last month…
We didn’t invent top 10 lists: Dave Letterman, Wayne’s World and Moses’ Ten Commandments demonstrated that human beings have short attention spans, like the payoff of the countdown format but yearn for the unknown. What we nailed was the style and tone. We leveraged our relationships with rights holders and understanding of copyright law to rely on fair use and create the most engaging catalog of video, with a video on every topic.
The company’s success can be chalked up to ambition, vision, execution, persistence, luck, timing, and, eventually, focus. But beyond luck, there are a series of prescient bets.
Geek Culture, Fandom vs Service Journalism, and the Impact of UGC
We foresaw the emergence of geek culture being cool, and dove into fandom before these terms were popular. We also recognized that audiences were far more likely to engage deeply with entertainment franchises they were nostalgic or passionate about than they were with so-called service journalism, which was disrupted by user-generated content (UGC), where advances in technology, proliferation of production equipment and democratization of publishing platforms made producers vulnerable and obsolete through an influx of prosumers who increased the supply of content.
Publishers were drawn to service journalism because CPG marketers spend a lot of money, but building an editorial strategy around marketers isn’t a strategy that works in the 21st century. Today you have to start with your interests as a story-teller, then serve your audience… and then marketers will come. UGC has changed the dynamics by dramatically increasing supply of content and plummeting ad rates, meaning you can only succeed if you have the interest and ability to sustain over time.
YouTube: Ground Zero
Netflix has been evolutionary in that it’s taken shows audiences saw on TV and in theaters and brought them inside their houses, at their convenience. YouTube, meanwhile, has proven to be revolutionary because it’s changed the definition of quality and who is a celebrity, defined what audiences will sit through, and, thanks to skippable ads (TruView), what marketing messages they will tolerate. While many analysts offer binary, winner-take-all visions in digital video, there’s more than enough room for both subscription (SVOD) and advertising (AVOD) on-demand models, which are now entering a new mature phase, as cord-cutting and over-the-top (OTT) services take off. 2019 is in some ways where 2006 was: people seeking to compete via aggregation and creation of super premium originals, which can become popular but not necessarily profitable; while the lion’s share of audience engagement will come from ad-supported premium content, basically: YouTube, or what that evolves into.
With over 2 billion monthly users today, WatchMojo’s staggering reach means it is serving up videos to 5-10% of the total audience on the platform. Given the platform’s international disposition, we are betting that our collection of localized channels and vertical brands will propel its total audience to a billion-plus people by 2025.
We want to engage any global CEO or C-level exec and discuss strategy. That’s what our strategy allows us to do. YouTube is part of that, but only a part of it. We’re leveraging that audience into other areas, including events, a record label, and much much more.
The beauty of it all is YouTube isn’t going anywhere, but by the same token, there comes a time where you realize there needs to be a plan beyond YouTube. YouTube allows any person or organization to reach literally a quarter of a billion people, you realize you may not be really leveraging the platform if you don’t aim beyond it. And, by having stayed independent, suddenly we find ourselves in no rush to fulfil our destiny.