Category Archives: New Media

Work at a Digital Media Company? Here’s How Much It’s Worth

We’re in a huge boom of VC-backed media start-ups with tons of investment in digital media brands that are growing because of the obvious shift of consumer attention from print and radio to mobile and internet. And if you work at one of these, you might be wondering how much your equity is worth or when/what the co’s exit prospects are.

There’s a pretty neat article on Medium called The Art and Science of Online Media Exit Valuations. It’s a simple 101 about how media companies are being valued these days based on interviews with real media investors and detailed research on these types of companies.

If you’re just looking for the so-called “multiple valuation” punchline, here it is:

Digital media companies tend to sell for between 2.5 and 5 times (2.5–5x) revenues from the previous, or “trailing,” 12 months.

Also:

Most digital media companies sell for about 8–12x EBITDA.

I find it interesting how investors prioritize different types of revenue. Digital media is generally very TBD in the business model department and part of the excitement to me is how much experimentation we see in this space: loyalty programs, tip jars, paywalls, merch, licensing… but according to Dorian Benkoil and Rafat Ali’s research, four areas add big value. These could kind of be used as a playbook for CEOs and strategists trying to bump their valuations:

  1. Subscriptions services — because these are much more predictable than advertising
  2. Paid research
  3. IRL events/conferences/parties, and…
  4. Databases of user info (very lacking for co’s in the distributed media world)

Annoying, Unskippable Ads Get a Really Bad Rap — And Might Be Better for Us


Jason Hirshhorn piqued my interest quickly (maybe accidentally?) in the mix of his rantnrave on Redef today [bolding from me]:

All advertising is content, some more enjoyable than others. Sometimes the less enjoyable ads sell product better, using less of a viewer’s time.

That’s a great trade off for a viewer! The advertiser gets to sell HARD in exchange for not much of your time. I’d take that any day.

And yet, most advertising “quality scores” (a fundamental component of bidding algorithms aka getting a low CPM) would penalize an ad for local-car-dealership-style of hammering jingles, prices, locations and calls to action. And skippable ads obviously disincentivize consumers from watching brisk but sales-ey ads… they get annoyed and hit skip. It’s all in the name of “the user.”

I’m afraid that the ad networks, ad tech and technologists are favoring more insidious, “engaging” branded-content type ad creative because it supposedly puts the user first. We know that branded content is sometimes just manipulative… hiding the fact that it’s advertising in favor of engagement. So we need to be open to unskippable, “less enjoyable” ads and heavy calls to action — because sometimes they can be annoying, but they use less of our attention… and attention is way more valuable to the user and the platform.

Could Justin Timberlake Bring Back MySpace?

This is neat — Harvey interviewed me about Justin Timberlake’s new investment in MySpace. The coolest part is that TMZ Live, our daily live web show, is now being syndicated on Sirius XM. So it’s exciting to think that people were listening to my “punditry” in their cars on the way home from work.

Jump in to about minute 32 for my short bit.

Insanity:

Another day at the L.A. Times. In case you didn’t know: the Tribune Company, its owner, is dying along with every other newspaper on the planet.

The thing that strikes me day after day — whether I’m at the L.A. Times, or talking with a studio friend, or sitting in a film class — is this: You can’t do the same thing over and over again and expect different results. The economy is no excuse — some media companies are doing okay right now.

New Media is hard, but it’s not as un-paved as people keep saying it is. There are ways of making money. There are ways of finding an audience. But they aren’t the same as the old ways.

My Thesis prez

I’m finished with college. Next semester, I’ll be taking yoga and independent studies. It ought to be a hoot.

But my capstone presentation was about web video distribution. Appropriately, I streamed it online. About 50 people were in and out during the live stream and hopefully they were all thinking, “I can’t wait to hire this kid in May!” Maybe not.

I’m especially proud of a concept I’ve engineered called “segment parsing.” I introduce it in the video — but there’s more to come soon.

[viddler id=88ce4909&w=200&h=175]

Sealing panels

We’ve put together a pitch for a panel concept at 2009’s SXSWi Festival, and 30% of sealing the deal is a poll of potential conference attendees. Even if you’re unlikely to attend the conference, it’d really be swell if you voted for it. It’s called “The Student 2.0 Revolution” and it’s about how Web 2.0 is shifting the playing field on college campuses and the administrators who stand in the way of that.

The ironic part about whoring out a self-promotiomal blog post on this is: does anyone read this blog? And even if someone does, wouldn’t they already know about the panel? Well, either way, it can’t hurt.