This week the media armies continued to position and reposition their forces for the streaming wars of 2019. Apple announced some plans, but then other rumors waylaid those. Meanwhile, all the TV critics gathered for TCAs where more studios announced shows and plans, but overall nothing big happened per se. Which leaves us searching the darker corners of the internet to find…
Ah, social media. A huge player, but will it hurt or help media? Let’s find out.
Most Important Story – Reddit…the “Underrated” Social Site
The “news” if you will is that Reddit got another $300 million dollar investment from Chinese giant Tencent, which values the company at $3 billion dollars. This news came on the heels of an interview of Steve Huffman with CNBC which dropped some other “datecdotes” with which to analyze the company. Including…
– They have 330 million monthly active users worldwide.
– Half of these users are between the ages of 18-26. (And that means that really many of those are below 18 and lying.)
– Reddit makes $100 million in revenue (which Reddit will not confirm, since it is private).
That last data point may be the most stark, since it is so low. Clearly, Reddit doesn’t monetize its users as well as places like Twitter and Facebook. Snapchat has eight times higher revenue than Reddit, with fewer users. That signals a lot of potential value, for both investors (to get good returns) and marketers (to get better ROI on campaigns). The latter is who I’ll be thinking about today.
Reddit is low on the marketing radar, in my opinion because Reddit just isn’t very buzzy. On a personal level, I’ll admit that until I started using Reddit last year, I was skeptical of its reach and power. I’m not anymore.
But plenty of others are. In the “power rankings” of social platforms–using my observations of Twitter as the guide here–I’d say that the media generally ranks Reddit last in importance, behind companies like Snap and Twitter, and maybe even Pinterest. My working thesis for this–some of this I floated on Twitter early this week as a trial balloon—is to blame it on media biases. Twitter is the home to journalists, so it gets a natural overhype. Facebook has everyone, so it’s properly rated. Instagram and Snap target Millennials, and media has a natural bias towards anything skewing young.
But media biases can’t explain it all. So I have four additional theories on why Reddit doesn’t get the love:
Theory 1: Brands can’t use it.
Why not? Strong community guidelines that militate against brands placing “native” content to promote themselves. This is the core ethos of the platform. If an individual entrepreneur tries to go on to just promote themselves, it usually backfires and they risk being banned. And their content too. This is a huge disincentive to using the platform. If you can’t use a platform, well it doesn’t matter. (I’d add you also don’t build an army of bloggers trying to sell you on how to make money on the platform, the way it has with Youtube, Twitter and Instagram.)
It could be a truism that no brand can “control” social media sites, but Reddit seems like the least controllable and most likely to backfire on brands if they try to engage there.
Theory 2: Not a lot of journalists spend time on the site.
This is my gut thinking, when compared to Twitter or Facebook. Again, Facebook wanted every media site to have a presence on its newsfeed, so journalist jumped in with both feet. And journalists naturally gravitated towards Twitter. So if you aren’t using something, you don’t write articles about it. (Hence why political trends bubble up in Reddit and 4Chan, which then catch 90% of news sites off guard.)
Theory 3: Reddit feels like it doesn’t target Millennials.
This is one of those ideas that was in my “blink” thinking, but isn’t as true as it seems. If you had asked me, I’d have said that Reddit was the home to middle-aged men spouting their political opinions or middle-aged fan boys with similar opinions or gamers debating tactics. Like most forums. But as I wrote up above, this isn’t true and Reddit skews very young.
Hmm, my gut would have said that the middle-aged men on the Gamergate and The Donald subreddits were the driver of the site. Which leads to a better theory.
Theory 4: Reddit feels associated with the alt-right.
When I say “Millennial” part of that includes a cultural aspect that means “liberal”. And Reddit doesn’t feel liberal. Of the news stories that do mention Reddit, they usually tie it in with clearly alt-right sites like 4Chan and other alt-right movements, like GamerGate or SadPuppies. Or other negative coverage like deep fakes or pornography or stealing copyrighted material. In other words, in its pure, unpoliced state, Reddit hosts a lot of communities that brands don’t want to associate with. So it gets less support. (Though clearly Twitter and Facebook aren’t free from hosting distasteful voices either.)
Conclusion: Reddit may really be underrated.
Add it all up, and Reddit feels like an underutilized resource. This means clever folks can get a great ROI for devoting the effort to a Reddit social strategy.
One of the things I’ve observed over the last 18 months or so, while trying to build social media profiles for various projects, is that getting the platform right is crucial. The targeting of market segments via social platform is far from a well-honed science. It seems like every media company uses Twitter, Youtube, Instagram and Facebook and that’s that. Retailers seem better than media, but new DTC companies seem like the best of all. (This, for example, is an infographic I like, but I’m not sure of its data sources.) Meanwhile entertainment companies are left in the dust. (Though notably CNBC notes that Universal is pushing Jordan Peele’s Us on Reddit.)
(Definitions note. I define “social” really broadly. So traditional players like Facebook, Twitter, Instagram, Snapchat, Linked-In, etc. But also media social like podcasts and Youtube. And I’m always fascinated by “dark social”, email and text threads.)
What I love about Reddit, and why I think the ROI might be high is the “time on site” metric. Look at it on website tracking site Alexa:
It may be the sixth most visited site in the US, but it’s number one in ‘time on site” at 11:30, double some of the sites around it. This may be why it is underrated. Most digital marketing is still woefully underprepared to factor in time on site as the metric to judge a website. (Some other websites note its traffic and its high engagement levels.)
I’ve been noodling with this idea for a bit now: the most valuable things for a website isn’t just pageviews or users, but users who stay on a long time. Even better is websites who get this stickiness without resorting to tons of algorithmic manipulation.
Take for example–back in the Grantland days–a Bill Simmons column. When it went up on Fridays, hundreds of thousands of people like me would flock to Page 2/Grantland to read it its entirety. Grantland followed this up by employing other terrific long form writers like Bill Barnwell and Zach Lowe who were easy to find and also readable. (Now I couldn’t tell you how to read Lowe or Barnwell. It is by chance that I find their articles.) Right now, Matt Yglesias, Kevin Drum and Stratechery are examples of people I read weekly if not daily. That should be really valuable.
In other words, the gold standard is organic traffic from a dedicated audience. Reddit has a lot of that. The problem is algorithmic ad-buying doesn’t distinguish that sort of viewing versus the spam sites trying to get people to click through dozens of images to find a celebrity’s facelift gone wrong. Or at least, they don’t distinguish well enough. Nor do media companies–who usually just use giant ad-buying firms–understand this connection to really drive eyeballs to their marketing. (To Simmons’ credit, his podcast has started doing more ad reads for films, which I think is brilliant.)
So if you’re a marketer looking for an edge, consider Reddit. Many of your opponents haven’t. Or if they have, well it hasn’t shown up in the revenue for Reddit yet. So the ROI potential is still there.
(Final theory: Reddit has a bot problem like every other social platform. I don’t know how it compares though to other sites, and my theory is whatever population is fake on Reddit is the same proportion as Facebook and Twitter.)
(Final parenthetical: By the way, as bearish as I am on most VC/M&A news, I think the $3 billion valuation sounds super low for Reddit. This could be a deal like Google buying Youtube if my “undervalued” thesis is right. Let’s just hope they don’t launch “Reddit Originals” any time soon.)
Other Contender For Most Important Story of the Week – The Latest Lego Movie Disappoints at the Box Office
Again, don’t try to read into “why” this happened. That’s hard to judge. But, like many other potential franchises, holding on to greatness is really tough. So three movies in a row have declined for the Lego movies, which make them just average as a film franchise. (If indeed all four movies count as a franchise.)
I bring this up because pre-Lego movie, I thought that Lego was crushing it. And overall they are crushing it. Lego Ninjago did wonderfully as a TV show at selling product. Lego toys still sell really well. But it looked like after the first Lego movie that they could be another franchise in Warner Bros bid to beat Disney. Well, not yet. In other words, in entertainment success is difficult to sustain.
Lots of News with No News
I saw a lot of Twitter headlines from TCA, but I don’t know that any one presentation or even the whole thing had a “lot of news”, but again did help “prep the battlefield” for the streaming wars to come. Instead, some shows were announced, some release dates set, everyone was positive about all the shows, and Netflix loomed over all the conversation. Actually, the only change may be that Disney Plus has joined Netflix in looming over all the conversations.
This is just a reminder to myself that I need to write a longer article on all these HUGE executive producer/creator deals from Ryan Murphy to Shonda Rhimes to Jordan Peele to Sam Esmail to Ava Duvernay. What is the hit rate for these deals? What is the VORP of a showrunner? Which are good and which are bad?
Fingers crossed I tackle this in 2019.
Long Read of the Week – Tim Goodman in The HOllywood Reporter “The Curious Cases and Future Fates of Starz and Epix”