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Elizabeth Spiers is the former editor-in-chief of Mediabistro, co-founder of Breaking Media and the founding editor of Gawker, so it’s worth paying attention to a recent blog post she wrote about the top five mistakes that digital media entities make when launching something new. But one of her points in particular stuck out for me, and that was the one about media companies that think they are technology companies, just because they happen to have a proprietary content-management system.
Spiers argues that this is popular delusion is largely an attempt to curry favor with venture-capital investors, who are more likely to hand out cash at a large valuation to a tech play rather than a boring old media business. The painful reality, she says, is that “media is not easy to scale and margins are tight,” because content still requires people to produce and edit and package it properly and technology doesn’t really change that significantly.
[blockquote person=”” attribution=””]”What’s your primary product? What are you monetizing? If it’s not your technology, you are probably not a tech company – and you’re probably not going to get a tech company valuation or the scalability of a tech company by insisting that you are (Do you even have a company without content? No? Then you’re still probably a media company).”[/blockquote]
What makes a tech company?
Although Spiers doesn’t name any specific companies, other than the New York Observer, her point is particularly relevant to any discussion of new-media players like Vox Media or BuzzFeed, both of which have raised large sums of money based at least in part on the argument that they are technology platforms rather than traditional media companies — and in Vox’s case, much of that was based on its proprietary content-management system, which is known as Corus and often gets raves from media types.
When Andreessen Horowitz led a $50-million round that valued BuzzFeed at almost a billion dollars, partner Chris Dixon said that part of what the firm saw as valuable was that BuzzFeed wasn’t just a media company but was a “full-stack” technology company, by which he appeared to mean that it controlled everything from the publishing system it used for content to the engine behind its advertising, and all the various pieces in between.
[blockquote person=”” attribution=””]”BuzzFeed is a media company in the same sense that Tesla is a car company, Uber is a taxi company, or Netflix is a streaming movie company… The most interesting tech companies aren’t trying to sell software to other companies. They are trying to reshape industries from top to bottom.”[/blockquote]
The Spiers post triggered a brief back-and-forth about this idea on Twitter, after Skift founder and longtime media-watcher Rafat Ali noted her point and Chris Dixon responded — saying the content-management system at media companies was only a “small piece of the puzzle,” and was analogous to the electronic dispatching system used by Uber and Lyft.
[tweet 551841119437619201 hide_thread=’true’]
Understanding content flow
Dixon didn’t say what the rest of the puzzle consists of, but for me the difference between companies like BuzzFeed and most traditional media entities is the core position that data plays in trying to understand how content works now — the way it is shared and distributed through social services, combined with what BF founder Jonah Peretti calls the “bored at work” network. That’s the main reason why the company appointed the head of its data-science team, Dao Nguyen, as its first publisher last year.
Understanding that dynamic, and how it relates to other crucial information — such as the power of Facebook over your content — is more than just something of academic interest. It is literally the key to survival. Not understanding it is like a traditional media company not understanding exactly where its newspapers or magazines are sold, or who buys them, or when.
That’s why I think it’s important to watch not just what BuzzFeed is doing, but what other smaller players are doing, whether it’s Upworthy or even lesser-known content companies like Spartz Inc., the brainchild of twenty-something content whiz Emerson Spartz. It’s not about duplicating their practices, but about trying to figure out what they know or don’t know about how content reaches people now. It’s a vast frontier.
This is what smart media companies like BuzzFeed and Vox and Medium are trying to do (and to her credit, Spiers admits that her media-tech argument applies somewhat less to companies like Medium, which act as open platforms as well as being publishers). Are they tech companies in the classic sense of the word? No. But they are using technology in a way that media companies traditionally haven’t.
As I mentioned in a previous post, I also think they look at what they are doing in a different way — they are thinking about content and media as a product with users, whose needs and desires should be interpreted and understood, rather than as just a tube that gets filled with whatever content the editors at the other end see as worthwhile. That shift in mindset is almost as important as the actual technology itself, in my opinion.