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The biggest creators are no longer in the merch business

This is a really fascinating interview with Linus Sebastian, who started making tech product review videos for a Canadian retail chain and eventually spun them off into Linus Media Group, one of the largest and most influential tech media companies.

One of the most interesting segments in the interview is when he talks about his intention to stop referring to the products he sells in his store as "merch." In his mind, that word denotes low-quality, print-on-demand t-shirts with a YouTuber's logo slapped onto them. That was the bread and butter of an earlier version of YouTube when its creators just wanted to give fans an avenue to directly support a channel.

Instead, Linus's company is focused on building out a pipeline of gear and clothing that can compete in quality with anything you'll find in retail stores. This is similar to what we're seeing with many of the world's largest creators spanning from MrBeast to Emma Chamberlain. The underlying thesis is that these are products that can attract loyal customers outside of a YouTuber's core audience. And while many of these product companies do have direct-to-consumer distribution, they're also very much focused on signing traditional retail partnerships.

That's not to say that smaller creators won't continue slapping their logos onto print-on-demand clothing and coffee mugs, but it seems clear that, as the Creator Economy matures, we're going to see more and more efforts to launch products that can compete with the world's top brands.

Is Apple News the biggest news traffic referrer other than Google?

Apple News now has 125 million monthly users. I wouldn't be surprised if it's the largest traffic referrer for legacy news outlets outside of Google:

Although it does not produce much original journalism, Apple News — launched almost 10 years ago — has considerable influence over what tens of millions of people in the largest western countries read every day.

“From a brand awareness point of view it’s really important,” said David Higgerson, chief digital publisher at Reach, the UK’s largest regional newspaper owner. “We need to be there. It’s the front door to everyone’s iPhone.”

The question remains as to how much revenue this is really driving for publishers. Apple has been tight-lipped about the subscriber numbers for Apple News+, and it historically hasn't generated much advertising revenue.

Still though, legacy publishers are probably happy for the distribution in a world where the largest tech platforms are increasingly deprioritizing links. And they probably like the fact that they don't have to compete with the Creator Economy within the app, seeing as how it mostly only allows in traditional media outlets.

If Apple could just figure out a way to attract more advertisers onto the platform, I feel like it could become a powerful revenue source for the traditional publishing industry.

Why is sports streaming so convoluted?

Disney just signed a huge partnership agreement with a streaming service called Fubo just to get it to drop its anti-trust lawsuit against Venu, a streaming app that will bundle the sports programming for ESPN, Fox, and Warner Brothers Discovery:

The biggest takeaway is this: It's a reminder that Disney, which is launching its own stand-alone ESPN streaming service this fall, isn't fully confident about that service's prospects. That's why it wanted to be in Venu — to be part of a bigger sports streaming service, in case a meaningful number of people wanted streaming sports from ESPN and other networks as well.

Of course, even if a sports fan subscribes to Venu, it’s still likely they’ll need to subscribe to at least one or two other streaming services — Netflix, Peacock, Amazon Prime, and/or Apple TV+ — if they want to watch all the games hosted by a single pro league.

I'm not a consumer of sports content, but if I were I feel like I'd be extremely frustrated by how much the broadcast rights are sliced and diced across so many paid subscription platforms. Imagine if you had to subscribe to four streaming services just to watch all the seasons of a single TV show.

This dynamic made more sense back when everybody subscribed to the same cable bundle, which meant that all you had to do was flip through different channels to watch games. Now it just feels unnecessarily complicated, especially for the more casual followers of any one particular sport.

If I were a sports fan, I'd wonder why a single league couldn't just sell one subscription fee through its streaming app so I could access the entire library of games — or at the very least why a league doesn't sell its entire package to a single streamer. The current ecosystem just seems so anti-consumer to me.

The Wattpad-to-Hollywood pipeline

Some of the most popular TV shows over the past year were adapted from stories hosted on Wattpad, a self-publishing platform the specializes in serialized fiction from mostly unknown writers:

As a self-publishing platform, Wattpad is known for hosting fan fiction and romance, and its authors and readers both skew heavily female. Those are genres and audiences that have been traditionally dismissed by critics and cinephiles; even their fans might admit that most Wattpad movies aren’t exactly high art. Their romances tend to be defined by toxic masculinity, indulging in fantasies of brooding, and sometimes violent men being drawn to unassuming, often overlooked women. The male characters are, typically, petulant narcissists with perpetual sneers who insult and cajole their female love interests into almost invariably unhealthy relationships. They use patronizing nicknames like Pigeon, Lucky, Moth, Freckles, Cheer, and Witch to refer to their intended paramours.

When a Netflix hit isn’t actually a hit

Wow, Riot Games funded and produced its animated Arcane series in-house for $250 million and only licensed it to Netflix for $3 million per episode, which didn't even cover half of its costs. The entire idea was that the show would serve as a marketing vehicle for League of Legends.

The end result? The animation is beautiful and it's a huge hit on Netflix, but it didn't generate enough game sales to justify its costs:

Interviews with Riot Games employees and industry analysts indicate it was a commercial failure for the company. Riot spent so much of its own money developing and marketing the show that it didn’t make money from the production. The show also failed to convert many new players or get existing players to spend more money on League of Legends.

Leaders on Arcane’s first season didn’t give Riot’s in-game item designers enough time to make new, Arcane-themed items or characters for sale in the game. While new players signed up for free League of Legends accounts, not very many stuck around, according to two people with knowledge of signups.

Podcasts can be a huge driver of book sales

A crime novelist built up a huge fanbase of loyal readers by going on lots of podcasts that cater to outdoors enthusiasts:

[Novelist C.J. Box] now does more interviews with alternative media than with traditional TV, radio or newspapers. He appeared earlier this year on the MeatEater podcast hosted by author and outdoorsman Steven Rinella, whose audience is 90% male and ranks in the top 10 on Spotify’s sports chart.

Rinella said his listeners, who tune in for his often irreverent discussions of hunting, fishing and life in the wild, appreciated Box because “he’s got humility, he works, and he isn’t a blowhard, which people can sniff out.”

Want to pick my brain on your content strategy?

At this point I’ve probably interviewed over 1,000 media entrepreneurs about how they built their businesses.

I also spent over a decade consulting with organizations ranging from small nonprofits to Fortune 100 companies on their content strategies.

For this reason I get a fair number of people who reach out to me to see if I offer consulting calls so they can ask me questions related to their own content strategies.

Currently, there are three options for booking consulting calls with me:

1. Become a paid subscriber to my newsletter: When you subscribe, you automatically receive an email with a Calendly link that allows you to book a half-hour introductory call with me. Many of my subscribers use these calls to ask me questions related to their own businesses. Use this link and get 20% off for your first year:

Get 20% off for 1 year

1. Book an hour-long consulting call: Substack has a cool tool that allows you to directly book a call with me. Paid subscribers automatically get a $50 discount for these calls: [Book a call here]

2. Book a series of calls: Sometimes people want to book multiple calls with me. I can offer a significant discount for three or more calls. I also sometimes take on more bespoke consulting engagements. Reach out to me for details.

History content is booming right now

Especially across podcasts and books:

In 2023, people in the UK and Ireland spent more on history books than at any point since Nielsen BookData’s records began in 1998. Ancient history sales rose 67% from 2013 to 2023, while books focusing on “specific subjects” — individual stories of lives, events or movements — climbed 70% over the same period. In the US, where the overall book market is flat, history has grown by 6% in the past year alone, according to Circana. For the first time in an election year, history as a category outsold politics (by two to one).

What paid streaming apps can learn from their free competitors

Tubi, the free streaming app owned by Fox, just had another blockbuster year of growth:

Tubi continued to gain traction in 2024, surpassing 97 million monthly active users and 10 billion streaming hours.

Fox Corp. paid $440 million in 2020 to acquire the free, ad-supported streaming outlet and has recently projected it will bring in $1 billion in full-year revenue, up from $150 million at the time of the acquisition. The outlet has become a welcome bright spot for the company, whose linear network assets are under ongoing pressure from pay-TV cord-cutting.

Free content continues to have a significant marketing edge over paid content, especially when you consider that YouTube’s TV app is far outperforming every other streamer, including Netflix.

In fact, one thing I've always wondered is why every paid streaming app doesn't launch a free version that serves as a marketing vehicle for the paid app.

Here's how it would work: take every TV show in your library and convert every season other than the most recent one into a free, ad-supported offering. That way, consumer would flood into your app to take advantage of all the free content, and then once they get caught up to the most current season they're forced to convert into paid subscribers if they want to continue binging.

Every streamer would get to have its cake and eat it too. It would see a huge surge in advertising inventory without cannibalizing the subscription revenue. It's a win-win, but as far as I can tell no streamer has adopted this hybrid model.

Affiliate content didn’t save the publishing industry

It's been a tumultuous year for publishers that hoped to diversify their revenue streams with affiliate sales. First, Google began aggressively de-indexing product recommendation articles from its search engine results, making it much harder for publishers to get this content in front of audiences that were at the end stages of the product buying cycle.

Then we found out that a PayPal-owned browser extension that's been downloaded by millions of people was swapping out publisher affiliate links with its own, thereby depriving publishers and creators of tens of millions of dollars for sales they drove.

There was a time when publishers hoped affiliate revenue would offset their declines in traditional ad sales. After all, ecommerce is well tailored toward websites that create content and cultivate engaged audiences.

But this strategy was always complicated by last-click attribution and the fact that most affiliate sales didn't come from publishers' own audiences but were instead driven by Google. That means publishers that leaned into affiliate sales were always incredibly reliant on factors they couldn't control.

The TV procedural is back

Episodic, non-serialized TV series are back in vogue. For years, Hollywood over-indexed on bloated, multi-season story arcs that often abruptly ended whenever a show got cancelled. Meanwhile, procedural stalwarts like Suits and Criminal Minds continued to rack up huge numbers on streaming platforms:

Even Casey Bloys, the longtime head of HBO and Max, has programmed “The Pitt,” a network-style medical drama starring Noah Wyle from “ER” that debuts on Max on Thursday. One of the reasons? These shows are not expensive to make, and there are plenty of episodes to keep viewers clicking “play” — key ingredients for this new era in television and streaming.

“You’re seeing a lot of people kind of rediscover what broadcast and basic cable had done so well, in terms of procedurals, cop shows, medical shows, things like that,” Mr. Bloys said late last year.

The media isn’t dying. It’s thriving

YouTube has paid out $70 billion to content creators in the last three years. That's an average of $23 billion a year.

For context, Netflix is now spending around $13 billion on content and Disney is set to hit a $24 billion content spend this year.

And that YouTube revenue share only accounts for a fraction of the money creators are generating on the platform. When you factor in sponsorships, merch, subscriptions, and other revenue streams, it wouldn't surprise me if YouTube is driving upwards of $50 billion a year for content creators.

That's enough to pay 500,000 people upward of $100,000 a year. And that's only YouTube. This is why Patreon CEO Jack Conte says we're currently in a second creative Renaissance. It's also why a lot of the coverage around media being a dying industry is incredibly reductive; the media has never been more vibrant in all of human history.

ICYMI: This local news outlet carved out a lucrative niche by serving Indianapolis women

I’m looking for more media entrepreneurs to feature on my newsletter and podcast

One of the things I really pride myself on is that I don’t just focus this newsletter on covering the handful of mainstream media companies that every other industry outlet features. Instead, I go the extra mile to find and interview media entrepreneurs who have been quietly killing it behind the scenes. In most cases, the operators I feature have completely bootstrapped their outlets.

In that vein, I’m looking for even more entrepreneurs to feature. Specifically, I’m looking for people succeeding in these areas:

• Niche news sites

• Video channels like YouTube, TikTok, and Instagram Reels

• Podcasts

• Newsletters

• Affiliate/ecommerce

Interested in speaking to me? You can find my contact info over here. (please don’t simply hit reply to this newsletter because that’ll go to a different email address.)

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