Hey there, welcome to Perpetual #2. For all 394 of you who subscribed this last week, I appreciate ya. The open rate on last week’s newsletter was 69.8% and the CTR was 22.8%. The most-clicked pieces were the launch of Workweek and the Jump DAO.
It’s my goal to get this to 1,000 subscribers by the end of the year. If you enjoy what you read, please share the newsletter with your go-to friend who you talk with about all things media. 🤝
Content is King
In 1996, Bill Gates wrote an essay called “Content is King”. It was published during the announcement of Microsoft and NBC’s partnership to create MSNBC.
Gates' essay spoke to what the future of the internet would become.
He talked about the content being all-encompassing — from software and gaming to news.
He talked about how anyone with a PC and a modem can publish whatever they want.
He talked about creating content for specific communities.
He called the internet the multimedia equivalent of the photocopier.
Gates wrote only 32 words about distribution in his 1,039-word essay.
“The Internet also allows information to be distributed worldwide at basically zero marginal cost to the publisher. Opportunities are remarkable, and many companies are laying plans to create content for the Internet.”
In short, he knew that distribution was going to be the internet’s special sauce — but all he could wrap his brain around was replacing newspaper delivery boys.
Distribution is Queen
In 2013, Forbes published a piece “Content is King, Distribution is Queen and she wears the pants.”
What made this shift to bring the queen into the picture? New moments of attention were unlocked on mobile.
It’s rare when a new opportunity to capture people’s attention is created. Our 24-hour clock has remained the same since the Babylonians created it, but the amount of activities we can invest our attention in has increased exponentially in the last 75 years.
The creation of new opportunities to capture our attention is monumental, and are driven by 2 things:
Enabling efficiencies in people’s lifestyles (read: self-driving cars)
Development of new products (read: app store)
Here’s the rub: As new opportunities for capturing attention have become available, brands and publishers have focused primarily on capturing attention faster — which means lowering their standards for content quality.
This decrease in quality, fueled by a more quantitative approach, often diminishes the value of each dollar invested per piece of content.
It's created the era of the unpaid social media interns, clickbait headlines and, more recently, the era of “fake news”.
The Connection is What Counts
The reality is that, by themselves, content and distribution don’t matter much. Nowadays, content can be created by AI, and distribution can be bought.
The “Content is King, Distribution is Queen” era hailed by Gates and Forbes is nearing the end of its life — not because content and distribution aren’t important, but because they’re no longer the leading indicator of a media company’s success.
What is? Connection.
I believe media companies that will succeed in the future will prioritize connection to their audience above content and distribution. (If that’s new information for you, that’s a bit concerning.)
Connection is more than just revenue. Here’s a handful of the qualitative and quantitative measurements I use:
Ratio of total to unique newsletter opens (if it’s more than 2X, then the content is thriving)
Number of replies to a newsletter (the more people who write in, the stronger the connection with the audience)
How fast people like a post on Twitter or Insta
Brand merch bought
Pop-up events and attendance
Put it this way: I’d rather see one picture of a die-hard fan with a Workweek tattoo than have thousands of subscribers with a 10% open rate. You’re not seeing me write ARPU or anything related to revenue for a reason — you can hide a crap audience behind a great monetization team for a long time.
The problem? A true, industry-wide mindset shift still seems far off.
Many media operators I speak with today speak about distribution as the holy grail, and many of the editorial and content creators I speak with talk about content being the most important aspect of a media co.
Intention vs. Attention
The other way I define connection with an audience is by differentiating attention vs. intention.
Attention is when your audience takes notice of you
Intention is when your audience is willing to take action for you
We now have plenty of case studies with MeatEater, Food52, Glossier, and more where content and distribution were never the factors in their success — it was the connection they cultivated with their audience and their intention to take action.
PERPETUAL'S PERSPECTIVE
Substack hit 1M subscribers
If you don't already know...
Substack announced that they have more than 1M subscribers on their blog. The top 10 publications collectively bring in more than $20 million a year. They announced a master plan to continue to support creators with audio, video, and community. They will provide services they need to do their best work like editing and design. They will build a discovery network to help their writers cross promote and collab.
Perpetual's perspective...
This is a great milestone for Substack. In the Gates essay I mentioned earlier he projected there was only $20-$30M in subscriptions universally online in 1996. Substack didn’t provide revenue numbers, but if you assume $100 ARP/subscriber they are at GMV of $100M, with revenue at $10M. I don’t know if that’s right, but if it’s close - it’s shocking how huge of an impact Substack has had in media, with such a small amount of actual revenue. The good news for Substack is if they use their wedge and brand equity to build new tools for creators they could soon start to reach their aspirations of being a $1B+ ecosystem.
The constitution is getting bought by a DAO
If you don't already know...
A few thousand people are trying to buy the Constitution (I’m one of them). The ConstitutionDAO expects to place a winning bid at an auction this week for an original copy of the U.S. Constitution. The document is only 1 of 11 left and the sale price will be $15-20M. At the time of writing, this project has been live for 6 days and has raised over $3M.
Perpetual's perspective...
This crazy movement helped me shift my views of DAOs. DAOs will replace the VC money that goes straight to Facebook. Consumer industries that require mass amounts of capital to hit scale will use grassroots marketing (via ownership in a DAO) to achieve their desired outcomes. If you give up 20% of your equity for a few million in VC funding that you’re going to transfer to Facebook over the next 12 months, why not give your customers 10% of your equity for them to be an advocate instead? This constitution thing has a ton of risks and odd angles, but it shows the power of grassroots/bottoms up marketing.
Punchbowl does $10M this year
If you don't already know...
Punchbowl News has attracted more than 100,000 subscribers since it launched in January. It raised $1 million from investors including LionTree’s Kindred Media—is on pace to generate more than $10 million in revenue this year, between ads and subscription. The company only has 8 employees.
Perpetual's perspective...
Wow. What execution by the Punchbowl team. Hats off to them. The former Politico execs understood how to execute with advocacy advertising (see Axios) and captured the market quickly. Politico may be the Paypal Mafia of media with numerous former execs launching and building successful companies. As for Punchbowl, I think the question will be renewals and how next year will look for the experienced team. Not saying they’re the same, but we saw with Quibi that large upfront deals can be negotiated with relationships - but executing that can bring another range of challenges.
Work hard, play harder - not everything has to be about work
If you’re looking for a new crazy way to invest your money checkout the Olympus DAO. 6% weekly interest rate so they grow their treasury. It’s nuts.
I’ve owned this “smart oven” for a couple of years and I’m still blown away from it at times. Makes the best cookies.
Lovevery recently announced their investment from TCG - if you’re a parent or soon to be a parent it’s apparently the best children subscription box out there
I’m hosting a get-together tomorrow in NYC, if you got this far down the email and you’re interested in attending then you deserve to go. Shoot me a response back and I’ll give you the deets.
Thanks for the read, let me know what you think by responding to this email.
Make it a great one.
Adam
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