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[on-hold music] This week's episode of the Rebooting Show is brought to you by Beehiiv, the platform trusted by enterprise publishers like Newsweek and Time.

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Newsweek is in the midst of an exciting transformation with AI disrupting search traffic. They're building direct relationships with their audience through newsletters.

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That B2C background ended up growing their tool into being enterprise ready. Newsweek has aggressive newsletter plans designed around adding new audiences and launching new products.

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Thank you so much to Beehiiv for their support. Welcome to the Rebooting show. I am Brian Morrissey. I'm joined by Andrew Perlman. Andrew is the CEO of Recurrent, which has a collection of brands in the automotive space.

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You're in military, like fill in. I know business of home. That's a little bit of an outlier. Yeah. We have home, and then we have outdoor and science. Outdoor and science.

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So I wanna talk about all of these properties, but like at this moment in time, you know, when you go back to the recurrent thesis, because you're-- you bought a lot of properties, right?

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And you had a lot of, like, funding to, to, to, to roll up, maybe not roll up the properties, but, you know, basically to roll up the properties, have a, a shared services model, right?

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Go back to the, the, the original sort of thesis, and then I wanna sort of stress test it against like everything that's happened since then in this crazy, insane environment. A hundred percent.

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So the, the original thesis- I'm giving away my bias, Andrew. [chuckles] Yeah, no. I mean, and, and please stress test it.

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The, the original thesis was the notion that we would buy great brands with authentic audiences, and you're right, that we would roll them up and get more scale with distribution partners, get better service when it came to give better service to the brands, when it came to selling, when it came to things like SEO.

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That was the original thesis, and that we would all only focus in content verticals where there was a high convergence between content and commerce, because that gets you two things.

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One, endemic advertisers, which we obviously get in military and auto, in verticals like home and outdoor. And two, it gets you commerce opportunities, which means something different than it did five or six years ago.

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Originally, that meant affiliate, now it means licensing and direct-to-consumer commerce. Okay. And now, like, how has that changed? Because obviously, SEO had a lot of...

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And look, it's, it's not-- I, I heard from a publisher this morning whose, whose traffic is up, and it, it's a niche publisher in, in finance.

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But for most follow-- then, then the publisher next to them at the, at the breakfast is like, "We're down fifty percent." You know, SEO itself i-e-is obviously challenged right now.

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Um, you know, I was talking to one major publisher the other day who was just like, "Our programmatic business is, like, on its last legs," because, you know, that, that was how we were monetizing SEO.

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Commerce has also become far more difficult. You know, in, in many ways, commerce/affiliate was... I was always saying it's like when people said that they do commerce, they really meant affiliate.

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And when people said they do affiliate, they really meant SEO. Yeah. I, I, I think that's, I think that's correct framing. So there are a couple notes that I would say on that. Yeah. SEO has always been ever-changing.

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The things that have changed dramatically are the introduction of things like overlays and the way that the Google page is laid out, and then on top of it, and I think there's a deep irony in this, if you had asked any-anybody in the publishing space five years ago if they would be excited that there was a new entrant that was gonna crack Google's monopoly, they would have been thrilled.

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Of course, we're sitting here now, OpenAI and other platforms in the AI space are cracking it, and publishers are complaining that the results have changed.

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For us, we're actually seeing an incredibly strong start of the year. We're up year over year. There, there has unquestionably been continued pressure, uh, specifically on affiliate traffic, but not traffic overall.

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Right. So your-- Let's talk about your, your core properties. I mean, you've- Mm-hmm. You have, you've got The Drive. I mean- Yeah. In auto, right? You've got The Drive, and you've got Donut Media. Yep. Right?

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And then, and then Real Mechanics stuff, which we, which we launched, which is- Yes... a spin-off of Donut. Yep. Right. And then in, in military, you have Task & Purpose, The War Zone.

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And We, We Are The Mighty, and then we have two live events. We have Milspouse Fest, and we have Military Influencer Conference. Okay, great. And, and then you, you're in, uh, Popular Science too, right?

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And we have Po- And Science. Yeah, we have Pop-Popular Science, we have Outdoor Life, and we have Futurism. Right. Okay. So you're, you're in niches, right? And so that's a way better place to be.

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You're not in news, thank God, right, for you. [chuckles] Like, you're not in, in general interest, or you're not in- Yep... news. And, you know, niches are, you know, the place, I think it's, like, somewhat protected.

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I mean, and like B2B is probably the, the, the, the area which is, is funny for me because, you know, B2B from the beginning of my career was kinda treated by everyone else as like the backwater [chuckles] you know?

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Yeah. And now everyone's like, "We're B2B." You know, Time was- Yep... like, "We're a B2B business." I'm like, "Really?" I was like, "That's, that's new."

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And, you know, part of that is just the compression that's happening to the overallIndustry. So how has the how has the revenue mix changed, say, in the last like three years?

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It's changed dramatically in the last three years. So our affiliate business used to represent almost thirty percent of the overall revenue for the company. Now that's probably about th- about ten percent.

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Live events five years ago were effectively zero. This year, my expectation is that that's gonna be about twelve percent of the business.

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And then things like licensing, and when I say licensing, I really mean two things inside of licensing, content licensing, and we have a great example where we packaged up Donut and created a Donut fast channel for Samsung, so that's one form of licensing.

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But I also mean things like product and, and merch. That's a revenue line that has grown, and that I would also expect to be about ten percent of the business this year.

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We are still-- The, the majority of the business is still through things like advertising and sponsorship, and that actually has grown as a piece of the pie as affiliate has declined.

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Okay, so affiliate's gotten hit the hardest, and is- Absolutely. And that's directly attributed to, to at-- the SEO challenges. Yeah.

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And, and I would say, again, I think it's a little bit more specific because people- Okay. -broadly paint it with this brush of saying it's SEO.

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To me, it's more specific in the sense that what we're really talking about is the way that the Google search results are laid out.

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You know, we, we have to, I think at this point, almost use a way back machine of our own minds and think about what Google looked like a couple years ago, where it was a couple sponsored links, and then you'd have the organic results.

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Now you've got an AI overlay, you've got a shopping overlay. If you're looking at travel, you've got a travel overlay, then you've got the sponsored results, then you've got the organic results.

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So really what's happened is, in a sense, Google has gobbled up the affiliate results because it's sitting right under the search bar when you're looking for, for products. Yeah.

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So that is unquestionably the component of traffic and the component of revenue that's been under the most pressure. Okay. So you've gotten shoved down, uh, off the page to like page two- Yep.

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-or page three, and that, that ends up, you know, really tanking. Not tanking, but I mean, it's down quite a bit. And so where do you see... I mean, events are up a lot.

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I mean, I hear a lot from publishers who are talking about experiential events, however you wanna call them, gathering people in person. It makes a lot of sense.

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This is not something AI is gonna do unless it's gonna be a bunch of robots gathering together. I don't think so. I just had a breakfast this morning, so I'm hopeful that [chuckles] this, this area is safe.

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I've got a dog in this fight, that's for sure.

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So talk to me about how, you know, going from zero, basically not really doing much in the events business to, you know, now having a, a growing, and I assume it's gonna be probably become a bigger part of the business.

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I mean, how, how is that process and, and what are, what are the properties that you're betting on there? Yeah, a hundred percent.

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So I think there-- First off, I think there's a big analogy with what you were saying when you're touching on B2B, because the one similarity with niches, but also in particular with the events, is you're, you're addressing a community or a specific need.

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And so the, the biggest things that we are doubling down on this year are, one, military influencer conference, and two, the events business that we've started to build inside Donut Media.

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And just to pull out two anecdotes and may-maybe to tell you a little bit about the events, so- Mm-hmm.

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-to give the background, military influencer is an event that is really for the veteran or active service member that's trying to take the next step in their own personal or career development. We have three tracks.

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We have inspirational speakers, we have a job fair, we have a pitch competition.

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And to me, the most at-most important anecdotal thing that I've heard out of the event is that people now feel like it's a community reunion.

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So you're, one, leveraging that sense of community, two, providing value to people, and three, people are now putting it on their schedule, so they know they want to come to it.

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As a matter of process, you know, when we, when we bought that event about four years ago, it was about four hundred people.

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Last year, we sold twenty-nine hundred tickets, and my expectation is this year that it'll go over four thousand attendees.

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But, you know, like with, like with building any business, it's been filled with both joy and plenty of mistakes along the way too, because it's an event- Ooh, you gave me an opening. We, we talk- Let's talk mistakes.

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[laughs] Yeah. I mean, I, I think this is, this is, this is learned pain that I would tell anybody that's in the event space. We- Trust me, I've been in the event space. I know there's, there's a lot of pain involved.

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Anyone who's getting into the event space, I would always say like, you know, we would always...

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When we would put like an events job up, we'd get flooded with like resumes, and I was like, "Man, you people don't know what you're getting into." This is- Yeah. This is not for the faint of heart. Go on. Yeah.

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I think there's no question about that.

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I think-- A-and I wouldn't necessarily say this was a mistake, but I would say in terms of optimizing the results both for the attendees and for us as a business, we did two years in Las Vegas.

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I firmly underestimated people's excitement about going to Vegas. I mean, I, I personally love Las Vegas. I don't think sponsors like Las Vegas.

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They think that when they sponsor something, they're sending their people to a boondoggle.

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And credit to my team for pointing out the fact that th-the endemic military community in the Las Vegas area is relatively small compared to where we ultimately moved it to, which was Atlanta last year, and then this fall we're moving it to Tampa, which has an even bigger community.

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So I think number one thing is go where the audience is.

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Number two thing, which is more of a budgeting thing, you know, a-a-and I'm sure everybody that's been in the event space that's done something in a conference center or a hotel, you gotta be really tight on your budget and who's signing what, because hotels have a way of surprising you with, with expenses, and that's never a fun experience.

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So really being buttoned up as you scale things is the number one piece of advice that I would give people.Yeah. And I, I definitely hear that.

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And it's funny 'cause I always-- there's always a divide between B2B and B2C, I feel like events in, in the margin profile.

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Like, I, I know at like breakfasts and dinners that we do when consumer publish-publishers talk about the margins that they expect on the events, it's far lower than what is the norm in B2B.

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And I think some of that is just the, um, you know, sponsorship is, or d- acts different and, you know, it's different when you're matching up a buy and a sell side, and I think the costs end up getting like out of control.

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Yeah. What I would say is it's easy for the costs to get out of control and, you know, we, we-- it's something that we've learned from, and we had a phenomenal event.

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It was an incredible experience for all of our attendees last year, and we also did generate very substantial profit off of the event last year.

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But again, it's just practicing that muscle and learning from, from mistakes in previous years. Yeah.

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And how different is it to, to f-from a model perspective to have a he-- to have an event, events be an important component?

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Because like, again, you're sort of architecting this with like, you know, you centralize services, right?

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So you, you end up taking a lot of costs out of the individual brands because a lot of niche brands, it's like, great, you have a very, you know, you have a tie, you have an, to an audience, it's a community, et cetera.

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You can monetize i-in, in different ways. You know, the problem ends up being they're inefficient businesses. Like small businesses are inefficient. Yep.

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And so you assume you, you had the, the shared services, you're like, okay, we're gonna centralize everything other than, than, than content, I would assume.

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Are the dynamics any differently when you enter, when, when you have events as part of the model? First of all, I think our, our central services team is a little bit thinner than what you outlined. So for us- Okay.

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I mean, obviously it's things like accounting, it's things like HR, it's things like legal. We have a really powerful central org when it comes to marketing. But for us,

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our verticals and our niches are so specific that we really do have experts in inside of each and every one of them, both when it comes to sponsorship and, and branded sales and also the execution of an event like that.

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So for us, the team that deals with the execution of that eve-event and the execution of Military Spouse Fest sits inside of our military and defense vertical.

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The same is true for Donut when we execute on Donut live events. What I would say is- Oh, so they each have their own events teams? Yeah. Okay. They each have their own people that are sitting inside the vertical.

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And again, that, that for us is, it's an extension of the way that we viewed- Yeah.

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-editorial and content creation, which is the verticals are so specific, you really need people that are expert to make an event awesome.

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When it comes to the margin profile, I mean, event margin profiles are, are definitely solid. And for us, when you get to a certain level of scale, you actually are approaching the margins that we see in digital media.

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So it's something that's very profitable, and I don't think it really switches the margin that much, but it does create [chuckles] a very intense couple weeks for the people that are doing those events- Yeah.

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-in the run-up to them. So I would say the, the work cycle- What kind of margins do you, do you aim for, for, for your events? So we're, we're above thirty percent when it comes to- Okay.

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-when it comes to our live events, so pretty solid. Yeah. And so how do you end up... I would assume mo-- like you, you mentioned some are like ticketed, so you're making- Mm-hmm. -direct revenue.

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But I assume the majority of the events business is, is sponsorship. Yeah. Sponsorship is still a bigger piece of the pie. Tickets in our case,

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a-and this is true whether it's Military Influencer Conference or something like a Donut event, tickets are probably about thirty percent of the revenue mix with the remainder coming from sponsorship, or in the case of Donut, it also comes from merch sales at the events.

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Right. Yeah. So like how is it different like with like the Donut, like how there, how that like experiential strategy versus, you know, in the military?

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It's very different and it's very specific to what the content is and, and equally as important, it's very specific to what the community is.

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So with Donut, last year we ran eight live events, and last year was really a year for us where we were playing around with formats and saying, "What can we repeat? What's the tentpole big event?"

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But at the end of twenty-four, and this is one of my favorite events that we've done that we will be repeating again this year, and I love it because it's the example of what a three-sixty media model should be.

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So inside of Donut, one of the biggest franchises that we've built is a show called High Low, where two teams compete with the exact same car. One team has more money, that's the high team.

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The low team has less money, and over the course of the season, they mod their cars.

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The last season of High Low we did was drag racing Ford Mustangs, and the season finale was actually a ticketed event that was filmed at a drag strip in Arizona.

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We had about six thousand people show up, and I just love that as a concept because to me, that is really the future of where we should be going, where you're creating amazing content in front of live fans.

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You are monetizing the sponsorship, both of the event and of the media. You have the ability for fans to meet the hosts of Donut. You have the ability for fans to see the action.

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You have the ability of fans to meet the cast of Donut.

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And so the dynamics are different, and I also think one of the things which, which we didn't have a chance to talk about, which is so important about live events, particularly when they're content-based, you know, one of the, one of the guys, Nolan, from Donut said to me, you know, "When I meet a fan, I make a fan for life."

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And when you think about the ever-changing search algorithm and the way that brands change, that personal connection is absolutely critical.

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If you can get somebody hooked on the brand forever and they tell their ten friends, "Yeah, I kn- I met this guy, we went to the event, it was awesome," that's really a great way of hooking people.

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So that was one format that we did. We've done cruise-in events, which were basically big car shows together with the Petersen Museum in LA. We're gonna do two of those this year.

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We actually even did a collab with Bob's Big Boy last year, where we also did a cruise-in event, which was a blast, and we're gonna aim to repeat that this year.

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So a lot of different formats.Each with a slightly different revenue mix and purpose, but again, a great way to make fans that will last forever. Yeah. I, I like Bob's Big Boy, by the way, great buffet.

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Used to [chuckles] always go there before, before high school [sighs] so good partner. And I think one of the other things with that kind of event is it's at scale too- Yeah... right? Like, I mean, you can...

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Like, I talk with lots-- I do a lots of small events, but, you know, my business is pretty, is, is pretty lean.

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You know, sometimes events, and you, you see it a lot in the, the business-focused space, they'll be doing, like, hundreds of, of, of events. I-is, is your strategy more to,

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let's get to, like, 10 pole/franchise where, you know, that's where you can, you can get some kinda scale? 'Cause the knock on events is they don't scale. Yeah. Well, I mean, that's obviously the goal, right?

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B-bigger would be great for the business. I think th- again, the first goal for us is to do things that are in keeping with what the brand is and make sure that it's a great experience. In some cases, those really scale.

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In some cases, the expectation, quite frankly, is that they will be smaller. We do small events inside the home vertical.

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We did one last year with Dwell, where we did a home tour of four homes that had been featured in Dwell in the Hollywood Hills with a meet and greet with the editorial team afterwards. That was a sold out ev-event.

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But to your point, that's smaller. It was about 300 people. Still profitable, still monetized really well, still engaged the audience.

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Would love to do bigger versions of that, but it's more challenging with some of the different niches. Right. Yeah. Yeah.

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I mean, in, in home, I can definitely, uh, see the, the smaller events probably makes, make more sense. Yeah. And do y- And how do you end up making sure that they're linked together with the overall business?

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And by that I mean, like, sometimes ev- sometimes events can, can almost be like a separate business in some ways, and are not as, like, tightly linked with the- Yeah... overall media property.

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And I mean, I definitely see this a lot of times in, in B2B or, you know, where the, the events are... Like, at some point, like, the, the publisher is like, "Wait, why do w- why, why are we doing the content?"

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Like, I mean, the, the content is completely different than, than the event. Yeah. I-in our case, because the teams are so in-inextricably linked, the content and the connection ends up being maintained in many cases.

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I could definitely see that for other brands, but that hasn't been the case in ours. And the other component of it is that the content is a great vehicle for marketing the event.

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Without the content, there'd be no awareness that they exist, or you'd be spending a lot in terms of your marketing budget to get people to an event.

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So our audience is almost like a built-in funnel for the live event strategy. Right.

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And some of your properties are very-- It's interesting 'cause you have some that are more, like, I would consider more institutional brands- Mm-hmm... but, like, some are very creator, like, centered. Yeah. And how--

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Do you see that? 'Cause I mean, there is obviously-- We're going through a period where, you know, individuals, if you will, have more leverage, at least in the marketplace than, than institutions- Mm-hmm...

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in many ca- in, in many sectors, right? Yeah. How do you end up, how do you end up seeing that with, with your, with your properties?

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Like, are you seeing the more, like, creator-centered brands end up, you know, thriving more? The way I think about it is a little bit different than that.

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So for me, right, there's, there's one key theme that underlies all of media, which is that video seems to be eating everything, right? Yeah. The engagement of video is going up and up and up.

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And when you move from a text-based world, no matter how great a writer is, to a video-based world, people feel like they know that person. And so I wouldn't say that it's necessarily...

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The, the creator term is consistently used. To me, it all starts with the connection that people see when they see a personality on video, whether it's on their phone or their TV or their laptop or their tablet.

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Donut is the only video-first brand that we've bought, but one of the things that we've been doing is taking a video strategy and applying it to all of our brands.

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We've been doing that for some time now with Outdoor Life, with really strong success, both in terms of engagement from the audience, engagement from brands that wanna advertise and sponsor the YouTube channel.

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We've seen that with Task and Purpose and building out that channel and continuing to evolve it. So inside of that, it's, i-it is, it is creator, but to me, it all starts with who the personalities are.

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In many cases, what we've done is if it's a brand that started out in the text-based world, see if we can get the editorial team in front of the camera. A great case study on that is with The Drive.

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The Drive actually was one of the first YouTube channels about cars, and the channel laid do-dormant for some time because we didn't know what to do with the strategy.

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When we bought The Drive, video production costs were higher. We couldn't figure out what the strategy was.

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And then about a year and a half ago, Kyle, who's the editor-in-chief, brought the channel back, and he's front and center, so he is the creator, he is the personality, and you can see in the comments the way that people react to him.

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Mm. So that's a long way of saying I, I think you're right, but to me, it's all about this personal connection that the audience feels.

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So are you then changing some of the, the, the, some of these brands to be more creator-like, if you will? Or have the... And I know creator is a very imperfect term. Yeah.

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Trust me, as someone who has been at one point labeled a B2B creator, like, I know that it's an imperfect term. I think that's a fair label. So yeah, like, the, the, the, the term is, is, you know...

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I-- But how are you-- Are you changing some of your brands to be more, lean more into being personality led?Absolutely. There, there's no question about it.

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And it all starts with trying to understand where the audience is going and meet the audience where they are. And to me, to say that we're in the website business, that, that was a couple of years ago.

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Now we have to be in the, in the YouTube business, we have to be in the podcast business, we have to be in the event business, and, and that's what we've been focused on for the better part of two years, is how do we take those, those tactics, how do we take those strategies, how do we implement them across the whole portfolio to really meet the audience, see that-- where they are and create a connection with them.

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Yeah. And I think that the challenge is that, like, you have to do so many different things that getting them all to make sense together can be a real challenge. Yeah, because, I mean, the business is just more...

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It's a very-- pu- I always find media business, they're very complicated businesses, right?

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[chuckles] Like, they're, they're ju- just fi- by their nature, because there's-- you've got, you've, y- you know, historically, you have different-- you've got, like, content people, you've got salespeople, you've got different groups, and then the way you make money is in a bunch of different ways, and sometimes you're working almost against each other in some ways.

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And, like, you know, just, like, for instance, this breakfast this morning, like, trying to get people to, like, agree on, like, a common metric within these businesses is incredibly difficult. Yeah. You know?

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Like, w- is it ARPU? Is it LTV? Like, nobody can agree. Yeah.

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I think, I think the thing that people get distracted by is you can have a lot of pennies that you hope add up to a bigger number, and people get distracted going down the rabbit hole of, you know, tiny micro-distribution components of the business.

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At its heart, the media business is actually pretty simple, which is audience in. Once you have the audience, you can monetize it, whether it's through advertising or membership or other.

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And so it's audience in, money in, profit out. That's the way it should work.

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I think the thing that's complicated and the thing that I can share personally has been a challenge is when you're looking at a component of the business, like an affiliate business, or in some cases, and, and we're fortunate enough that we exist in niches and we have communities that have kept our editorial traffic strong, but when you have a component of the business that's falling, the thing that is very difficult to do, which we have managed to do, is to scale up the new components of audience and new components of revenue while managing a segment of the business that's under pressure.

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Yeah. That's where people get... A- and, and it's not an easy thing. It's not an easy thing. Yeah.

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'Cause you, you're trying to keep people focused, you're trying to keep people motivated, you're trying to manage a P&L, understanding that one segment of your business is in secular decline while you're investing in a new segment of the business.

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So those are the issues that are hard. And you have to keep operating too. You're operating the old business- Right...

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and while you're building the new business, and you're doing it all, like, i- in a chaotic atmosphere. [chuckles] Yeah. Right.

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And you're sitting there going, "Well, it's down, but it's still profitable, so I gotta keep doing that."

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So those are the issues that I think is, are challenging for any management team, regardless of its, of if it's media or, or other industries that have also gone through rapid transformation.

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You know, and for me, right, I started my career in the music business, so we watched CD sales drive off a cliff waiting for streaming to at some point happen.

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So it's not, it's not unique to the publishing business, but that is unquestionably an issue, and it, it is, it is a challenge just from a management perspective. Yeah.

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And where do you w- like w- what areas do you think are gonna grow the fastest in the next three years?

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So f- for us, we are completely oriented around four key components of the business for growth: video, experiential, licensing, and AI.

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And when I talk about AI, it's not just AI to cut bodies, it's AI to make content go further faster. How do we use AI to mine the incredible catalog we have? How do we use AI to take something that's a long form video,

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rapidly do a cut down, make sure it's on every single platform, and be able to track it? To me, those are the most compelling components of AI.

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And, you know, I have some very smart investors, and I sat down with one of them, and his point was, "You have to look at two sides of the page when it comes to AI, defensive, which is cost cutting, and offensive, which is expansion."

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Yeah. We've done a lot of the ways that we can use AI to be more efficient, and now it's all about the offensive components of it. Yeah.

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I, and I think, I think for good reasons, a lot of, a lot of the focus of this industry has been on defensive, not like- Yep...

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offensive, you know, because it's, you know, trying to get payments out of, out of content that's gone and it's been trained on, et cetera, trying to get it for refresh content, et cetera.

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And then there's the efficiency, which is, you know, replacing people with software, which is, is, you know, inevitable in, in, in some cases. And, and a lot-- Look, these businesses have to get more efficient.

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They just have to. And that's, you know, that's, that's how it goes. And then the, the biggest input cost, there's, there's no factories. I don't think you guys have a factory.

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And so, you know, [chuckles] you, it's people. Like that's, you have to get more efficient in that and putting it towards what is gonna be driving the value in these, in these businesses.

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But it, it, AI has to be used to create better products at the end of the day. It can't just- Yeah... be. I don't think we've seen that, you know?

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Like, I mean, like, I understand it with, like, cutting videos and whatnot, but, like, for instance, like, the website experience, right? Like, I don't know,

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I don't know if there's a compelling rationale yet i- for many publishers for people to-To be typing the, their-- it just seems very strange that they're gonna be typing their, their URLs into a bar, and if they're not, like, you know, ending up there via search.

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I just-- I don't know if an AI-enabled search experience is on a, on a website is gonna do it For what it's worth, I don't think anybody knows what the-- what all the different platforms are and where, where they're gonna be.

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I mean, right? We, we always joke internally because we've had a, over the course of the past twelve months, we, and I would imagine many other publishers have seen this, have had a massive regrowth of Facebook traffic.

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And our joke is like, "Oh, it's a good Zuck year." But, you know, he giveth and he taketh away. So- Yeah...

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so, you know, we, we try and be everywhere and track all platforms and have relationships with all platforms so that we know where things are going. AI is a great tool to help us do that.

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But I think what you're saying about typing in a URL,

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y-you know, we, we still do see a tremendous amount of direct traffic, but I still just view it as this big macro theme that video is gonna get bigger and bigger and more important to the pie. Yeah.

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So is that for all brands that y- that y- that video is gonna be... I mean, I'd assume will it be central to all brands? I would imagine it will be central to all brands over, over time.

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Right now, we do not, we do not publish on every brand, but we do have active video strategies on the majority of our key brands. So Outdoor Life, Popular Science, Donut, Real Mechanic stuff, The Drive, Task & Purpose.

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The War Zone is gonna start publishing in video over the course of the next couple months, so it, it is very central to our strategy. Okay. Then can I read into that the text is less important?

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I wouldn't say it's less important yet. It may get there over time. It may get there. Talk to me more about that. I'm a words guy- Yep... despite us doing this through video and, and, and, and audio.

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That's why-- that's my, that's my off ramp. [laughs] I'm audio, I'm not a video guy. I, I don't know. At the end of this conversation, I might, I might pivot to video. We'll see.

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Well, I th- it-- to me, again, we're, one, we're following the user behavior, and two, when I look at where things are growing, I mean, I'm gonna, I'm gonna again draw an analogy to where I came from, which was starting in the music business.

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Yeah. If you think about the arc of the evolution of video, like the music business, right? Twenty-five years ago, you had to have a record label to get a CD out.

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Then streaming came along and individuals could publish through an aggregator. Then they could publish directly and get their music direct to consumer.

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Couple years ago, you still had to go through a TV network or maybe a Netflix to get on TV. Now YouTube is thirteen percent of television consumption.

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It's actually almost double the amount of consumption that a Netflix is, and any individual can publish there.

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So the barriers have come down on the distribution side, number one, and the barriers have dropped dramatically on the production side. So there's more content being published that's video.

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Why is there more content being published as video? Well, that's where the consumer demand is. So we've seen demand shift.

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The second thing that I would mention, which i-is gonna be maybe surprising to people that hear this, but I think that we are still in the early innings of major brands and agencies understanding the YouTube ecosystem.

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So when I think about growth of spend and dollars that can be captured, that is a core ecosystem to our strategy. I just think it's where-- it's again, where the eyeballs and where the money's going. Yeah.

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Well, so like when you're saying video, you're saying YouTube in a lot of ways. It's, it's gonna be YouTube and others right now for us. I mean, YouTube's TV. Like it's now- Yeah...

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like sort of universally seen almost as like TV. Yeah. I mean, I, I can give the, I, I can give the teaser. It's YouTube and others. We're gonna be doing some really cool stuff with other platforms. Okay.

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But right now for us it's YouTube is core, Meta and Instagram and Facebook Video, and also TikTok. Okay. What is the, like is the value of the brand as great now?

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I mean, 'cause you, you, you have a collection of, of really good brands, right? Mm-hmm.

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And I think the question ends up being do, do, do these kind of institutional brands end up losing value as, as people are more attached to individuals, right?

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Like, um, um, your, your competitive set in these categories is often a lot of individuals as much as it is- Mm-hmm... like other, you know, institutional brands. Yep. I, I do think that the brands matter.

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I actually am bullish on the meaning of brands as AI maybe erodes consumer trust.

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I think the brands as a trusted place and a trusted resource and as a place that consumers know they're gonna get awesome content over time is gonna be-- is gonna increase, but you are absolutely right that the competitive set, right, the competitive set for Recurrent is now not just Hearst, but it's other individuals that are publishing in the automotive vertical.

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That's who we're competing with for attention span and for eyeballs. But I do think that the brands matter because people know what they mean.

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And I don't think in the case of something like an Outdoor Life, which has a hundred and fifty years of brand equity, I don't think that's going away. I think that's gonna be ever more important. Right. Yeah.

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I think, I think that, I think that, that will, that will likely happen.

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Like, you know, everything's gonna get so chaotic, and it already has gotten so chaotic that, you know, brands will again play a role, play an important role as a signal of like quality-And trust, you know, I think they always have, so they likely always will- Yeah...

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in many cases. Cool. So tell me about the licensing strategy. I think this goes back to the point about brand importance.

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So the best example of things that we've done inside of licensing sit within Donut, where for a long time we've had a big direct-to-consumer merchandising business.

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Two years ago, we took that business, and we licensed it to Zumiez, the mall retailer, and that not only expanded the revenue stream, but also expanded

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the, the visibility that people have of the brand, and that's a strategy that we're gonna continue.

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If you think about what Donut is, we're looking at other categories, even looking at things like car care to expand into. So really exciting way to leverage your brand, even inside Dwell.

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Dwell for a couple years has had its own outdoor furniture line, which has performed really nicely. So, uh, you know, again, another way to diversify away from things like SEO and being advertising reliant. Okay.

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But you're not gonna, like, start making your own products yourselves? No. I think for, for us, the, the way I always-- I would love to make my own products because I think it would be super fun.

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But at the end of the day, it's not something that, right? The, the balance sheet and the capital requirements- Yeah... of a media business are very different from a product business.

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And- Yeah, I feel like that playbook has, has, has, you know-- I mean, like, it's, like, sort of the, the churn-in thesis, like, I don't know if it-- the thesis was, was completely wrong.

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I think the results were very hit and miss, to be [chuckles] comparable, I guess. Like, you know, some of the-these businesses really struggled to become real, like, commerce.

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When I say real commerce, I mean, like, you've got, like, you know, Hodinkee, like, had, you know, they-- they're holding inventory and stuff. It's not like a licensing deal. Right.

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It's a, it's a different type of business. Food fifty-two, you know, these, these are, these are real, you know, commerce businesses that have completely different dynamics. Yeah, I think that's right.

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I think, I think your point about food-- uh, sorry, about Hodinkee, a-and again, I'm, I guess I'm a caricature of my own self.

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I'm like a watch guy and a car guy, so the two brands that- And you're in Miami, so you're a Miami guy. [chuckles] Yeah, and I'm a, and I'm a, and I'm a Miami guy, so I'm, I'm, I'm way too predictable for my own good.

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But I think inside of what they own, I think you're, you're, you're probably right about Hodinkee, which is they were holding inventory, and that's not a healthy thing necessarily for a media business.

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But at the other end of the spectrum, you know, Doug DeMuro and Cars and Bids, I think those guys have done an exceptional job, and that's a pure play marketplace business.

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And it's one, because I'm a car fanatic, that I look at almost every day. So I do think that the thesis can work. Licensing is a little bit different than building a marketplace business.

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In many ways, it's simpler because you're, you're leveraging the brand equity and finding the right partner to take that brand and make it into a product and, and put it out into the market. Right.

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And are there other aspects of the product strategy that, that are not just-- that are not licensing? You know, for us, it's D2C merch and licensing.

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Merch is an easy one because it, again, it doesn't have that high capital requirement to get it done, and it is a, a really easy exercise in this day and age to figure out how you do merch. We do it with outdoor life.

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We do it inside of our military vertical. We do it in Donut. We do it in the Drive. But it really is those two components that we're focused on. Right.

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And, and are there other sort of growth opportunities that, that you're thinking about, like, longer term?

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I, I would say the other one, and this has been in the market with various partners for a while, the other one that we're focused on, on the heels of getting our Donut Fast Channel launch, is to do a lot of Fast Channel expansion.

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We have an incredibly robust catalog of video content across all of our core verticals, and a lot of that catalog has not been used to the full extent that it can be.

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And so we are in the midst of packaging that, that content up and going out to the right partners to, to maximize it. [upbeat music] Got it. Okay. Cool. Andrew, thank you so much. Really appreciate it. Yeah, my pleasure.

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Thanks for taking the time. Thanks for having me. [upbeat music]