Interviewer: Peter Houston
Peter: Can you tell us about how Minute Media started?
Asaf: We started the company about eight years ago, in Tel Aviv by a couple of founders. Back then we were very, very passionate about sports, however, Israel is a fairly mediocre sports and media market. So our only way to get into the business was to use the fact that Israel is a kind of technology hub. And so we were trying to look for ways to combine our passion for sports and technology, and build a global publishing platform focusing on sports.
When we started Minute Media eight years ago, we were operating under the name 90min, which stands for our global football publishing brands. There were three drivers or preliminary ideas behind 90min when we started it. One was the fact that we believed, back in 2011, that the way to create interesting, engaging, authentic content in football would be through engaging the fans rather than more traditional journalists. So that was bet number one for us. We have created a product that invites fans and allows them to create very rich content covering sports.
The second driver was the use of technology, so looking at football publishing back then, we were quite stunned by the fact that all our competitors were very traditional websites not using technology, and we thought that with the passion and engagement, and the level of enthusiasm that you see around sports, we could really leverage technology, and so that was driver number two.
And then with the fans and that technology, we thought that we could become a very global player from day one in a space that, back then eight years ago, was very local. So all our competitors are still very local publishers. But again, the use of technology and the fans have allowed us to go global from day one.
So that was the idea behind 90min eight years ago, and for the first four or five years of the business, we had focused on trying to turn 90min to the top global football publishing brand on the internet. And we have for the most part managed to do so.
After four or five years, 90min has grown significantly and has become a major player in digital football across 14 different football markets in Latin America, in Asia, in Europe, in the US. And then back in 2016, we decided to replicate the 90min experience and launch our second publishing brand called 12up into the US market.
In the US, we decided to focus on NBA, NFL, MLB, but essentially leveraging the same fundamental drivers that have been enabling the success of 90min, which is again, creating content by fans using our technology platform, and the scale around that. So 12 up has succeeded quite rapidly and quickly in in the US, and with the success of 12up and 90min, we then decided to replicate the model and launch our third publishing branding DBLTAP, which is in the esports space.
And then over the last couple of years, we made another decision, which is realising that the technology, the publishing technology that we have built, and powers our business can also enable other publishers, other big media companies that may lack the in-house technology know-how that we have built over time, and so we have decided to open our technology platform up, and invite other publishers to use that technology on their sites. So that has really grown significantly over the last three years.
Now fast forward into 2019, we have about 35 big publishers, media companies using our technology platform.
And is that primarily for user generated content, are they using your technology to get whatever their version of the fan community is involved?
Great question. So the first few partners or customers were using it for user generated content. However, we have enhanced and diversified the technology and the content formats and experiences, and now some partners actually use the platform for more traditional or more professional journalism as well.
What’s the difficulties in managing what’s fundamentally a technology company alongside a publishing company?
I’m still amazed on a daily basis by how different the two sides of the business are. So if you look into the publishing industry, you find very, very few technology companies out there. 99% of the companies in publishing are non-tech companies. So that starts with the DNA of the founders, of the early investors of what people are passionate about, which is content, it’s advertising, it’s media.
You see publishing companies start in the publishing hubs in the media markets as in New York and London, predominantly. Technology companies are just fundamentally very different.
And again, the DNA from the get-go of the founding team of the early investors is significantly different if you look into and so you have, usually technology companies start in technology hubs. And so would be, Silicon Valley, you see Tel Aviv, sometimes it you see that overlap or merge between the technology and publishing, but for the most part, these are two separate worlds and even now, even today, if you step into our office in Tel Aviv, it has a very different vibe than the energy will feel in the offices in the media hubs of New York and London.
So do you run your tech out of Tel Aviv? And then the journalism in other places?
Exactly. So the tech is exclusively out of the Tel Aviv office. We have about 70 plus predominantly tech team out of Tel Aviv.
Then the publishing side of the business, which is content and ad sales is in New York and London, and in other global media hubs, such as, Tokyo, Sao Paulo, LA.
So, in a sense, that global idea that you, I guess originally ran from Tel Aviv, you’ve now expanded out into these other markets you’re serving, like the NFL and the baseball, I guess, has been done from the States and then maybe football’s been done more from Europe?
Yeah, sure. So, fortunately for us, we have again established the global foundation from early on, and football is a very national sport, or ‘soccer’ when we present in the US, it’s a very national sport, so 90min is a very global brand, again, it’s quite substantial in the major football markets in Asia, in Latin America and Europe.
However 12up the American sports brand is US only. So it’s more domestic.
eSports on the other hand is also a very global phenomena, so we also take it into more and more markets.
So looking at your numbers recently, you’ve had revenue growth that most publishers would kill for. You had revenue growth last year of about 100%. Is that right?
So this year in 2019, we’re growing our revenue by over 120% year over year. So I cannot maybe really share the exact numbers as a private company, but you may assume that it’s quite substantial. So we’re converging to call it three digits in terms of millions of dollars of annual revenue.
I guess our listeners are probably less interested in your actual numbers than they are in how the hell you did it! So can you talk about that? Can you talk about your growth strategy? Because I know you’ve got organic growth, but you’ve also got acquisitions.
Yeah, so I would say a), the fact that we have built a centralised technology platform that allows us to venture into new content, “categories” quite easily, and then into new markets and languages quite easily. And that allows us to, using the same technology platform, to build our B2C brands, but also our B2B to C integrated partnerships.
I think that diversity enabled by a technology platform, really, I would say allows us to grow more easily than say a single site business, or a single vertical business.
If you were going to break down your revenue, roughly, how much comes from sales of technology, how much comes directly from publishing revenues, of advertising sponsorship? And then I guess there’s a last category there that maybe is about content creation for brands, branded content?
So the way we we break down the revenue – it’s a great question – the way we break down the revenue is that into the two major lines of business; one is advertising, generated on our O&O brands, like 90min, 12up and DBLTAP.
And then the other line of revenues generated by our publishing partners using our platform. You may assume that the second parts, the platform driven side of the business is now more than 50% of the revenue.
When it comes to the advertising side, we monetise programmatically, we monetise direct, and we monetise video. So there are different forms of advertising.
In terms of how those things all work together, would you sell advertising on sites that you’re selling the technology platform to?
Great question. And the answer is yes. So when we started, we were focusing on licencing, so you could licence our product and content. Now it’s a combination, you can either licence or you can also ask us to monetise for you, so then we would sell advertising against some of the sites that use our platform.
Do you see the business changing, or even – I mean, it’s a weird question, maybe – but do you see the business splitting in two, so that one would actually be the service business and the platform business, and the other one’s a publishing business?
So when we started extending the business into the B2B, the platform side, we were thinking of a separate siloed approach to the two lines of business. But over the last couple of years, we actually took the opposite approach of consolidating everything.
We believe that the driver for businesses, the economies of scale of using a single technology platform for the two lines of business, of using a single tech team to service the two lines of business, to have a single global sales team selling across the two lines of business.
So we believe that it’s the consolidated approach that drives our scale, not the other way around.
Do you think doing both sides makes you smarter?
We think so! We think that being a publisher, a large scale publisher ourself provides us with the insights, the experience, that allows us to provide a better service, and platform, and technology, and content for our partners. And then serving a greater number of partners over time does provide us with very interesting insights and experiences that help us improve our offering on our own and operated [prints].
So I know one of the acquisitions you’ve made is Mental Floss? I loved Mental Floss back in the day. I used to fly to the States, probably almost 10 years ago, I would fly at least once a month, and I always tried to buy Mental Floss in print, and I absolutely loved it. And I still look at it online, but I’m just wondering, okay, so one of the things is, why did you buy it? Why was that an acquisition that you thought was interesting for you? And the other question around Mental Floss is – because it’s not in print any longer – but is that affinity that was there with print, has it come to digital? Do you still have that?
So yes. So about a year ago, we decided to start looking for acquisitions. And the reason is that a) we believe that we have reached a certain scale that allowed us to look to add to our team, we thought that our technology platform was flexible enough and robust enough to be able to digest other publishers into it. And we thought that we have built a global infrastructure across all publishing functions to be able to take a brand such as Mental Floss to the next level.
The reason we picked Mental Floss as our first acquisition was, we’ve been looking hard, we have examined dozens of potential targets.
And it’s actually the opinion of avid fans like yourself, we’re really passionate about the brand that the content for over 15 years now. It’s over 10 million unique users digitally – to your question, that come to the site every month that’s proved to us the potential, the great quality of the content, the great engagement with advertisers.
Mental Floss is our first non-sports publishing play, and we have been witnessing more and more demand from our advertising partners to diversify our audience, more into female and other content categories, and we thought it’s quite complimentary from a coverage standpoint, and so, those are the reasons behind picking Mental Floss as the first acquisition. And again, it’s been very successful and provided us with the appetite to go and look for similar, great acquisition targets.
So are you looking? You’re looking for more acquisitions in the future?
Yes, following the success of Mental Floss, we’ve acquired a second publisher, another very successful play for us. A company called The Big Lead, an American sports publisher focusing on the business side of sports, which we have acquired from the USA Today, from Gannett.
Also super happy with this one, and the answer is yes, we’re about to announce our third acquisition within the next couple of months, and expect to continue to acquire at least three to four additional top notch publishers next year in 2020.
I mean going back to Mental Floss, I guess what’s interesting is that fan mentality. The idea that I loved Mental Floss because I’m a fact geek, and that’s what Mental Floss is all about. And I guess a lot of sports fans, they love their stats, they love the information that’s involved in sports publishing. Is that something that underplays what you’re looking for in an acquisition?
Yeah, I would say we’re looking for a significant passion of an audience for a content category. So we would be less interested in content that reflects less engagement with its user base, and when the engagement is there, we believe that that’s where we can best exploit the products that we have built and the experiences that we enable, where the passion for the content is there.
And is Mental Floss doing okay digital-only?
So fortunately the answer is yes, it’s doing really well digitally. It’s growing substantially within Minute Media, as I said, it’s over 10 or even 12 million unique users a month. Everything’s growing; the organic usage, the content, the engagement, and also the revenue.
In fact, funny enough over the last couple of quarters, we have seen demand from print businesses to consider doing stuff again, it was Mental Floss, we have seen a lot of demand on the podcast front to do stuff with Mental Floss.
So we think the brand is very robust, has great credibility, and so we do expect to see it extending into new media, new forms of media beyond just pure text digital, or video digital, that’s been the focus for us so far.
Excellent. I’m a fan, I’ll be there. One of the things I think, I’m asking that question about Mental Floss, but digital media was once, I guess it was seen as being invincible. But a bunch of players have had tough times recently, I’m thinking the Vice/R29 deal recently looked like a survival play rather than a strong deal with two brands coming together to grow. What do you think the future for digital media looks like?
We tend to agree. So if you look into the digital media landscape over the past decade, it’s the emergence of social and predominantly Facebook about eight, nine years ago, as a form of driving content usage that has caused a significant fragmentation of the market.
So Facebook diverting millions of users into new sites has enabled a whole generation of new social publishers. And again, Vice, BuzzFeed, there’s just a couple of examples, there are dozens of other examples.
But then what happened in early 2018 is that the Facebook feed has become so populated with so much content, including fake news and other forms of negative content, and Facebook made a conscious decision to lower the amount of content populating user’s feed.
That decision by Facebook has significantly reduced the level of social traffic flowing into all those new publishers, and severely affected many of them. So it’s really Facebook that has enabled so many new publishers, and then unfortunately diminished and really hurt many of them over the last couple of years.
Our belief always has been that, yes, we should also work with the social platforms, but we should build our business on our own technology platform. And so therefore, last year, when Facebook and other social platforms have started changing the way they interact with content sites, we were not as affected, and we could continue to grow at a time where other publishers have been really suffering.
So that’s the way we see the market. It’s fragmented over the last decade because of social media. And probably over the next couple of years, what we’re going to see is consolidation again, when it comes to content sites, you’ll see that the bigger players survive and thrive and scale, and the smaller ones struggle to stand alone.
Well that’s definitely what went on with Vice and Refinery29. Do you think a certain niche approach that is kind of at the heart of what you’re doing is important?
Yes, I would say that. So no doubt that probably focusing and going all lean and deepening into a vertical, or a niche is probably a better approach than an across the board general one.
However, again, because we believe that nowadays because of the challenges faced by social platforms, or caused by social platforms, you also as a publisher want to gain scale.
So if you do focus on a niche, it still has to be substantial enough in terms of size. And so that’s why football, you can call it like a vertical niche, but it’s big enough for you to be able to gain the skill required nowadays to thrive in publishing.
