Marc Andreessen Explains How to Succeed in the Media Game

t's old (from 2014), but famous VC Marc Andreessen explains the history of media and how to succeed in building a media business.

If you want to start a company or work in the news or media space, then you need to watch this video (or read the transcript below).

Marc Andreessen Explains How to Succeed in the Media Game

It’s old (from 2014), but famous VC Marc Andreessen explains the history of media and how to succeed in building a media business. I wholeheartedly agree with everything he says.

Two major takeaways:

  • News outlets need to have a voice and opinion and not worry about being objective. Example, look at Barstool Sports. They’re polarizing. Loved and hated by many. But they’re hiring like crazy while other brands are dying.
  • A great media company needs to put business objectives first. Otherwise, great content can’t exist. There’s a graveyard full of media companies out there that put content first without thinking about revenue and profit. World’s best content + no profit = dead.

Anyway, give it a read. I bolded the quotes that I like.

Audience member question: So I was interested to ask you about the news business. Of course, you’ve been tweeting and writing and thinking a lot about that lately….So what I’m curious about is why did you get interested in it now? Like what prompted you to get excited about that space and to start thinking and talking about it?
Marc: (he talks about how the internet has ruined news, but let’s get to the good stuff)
I look at it in a way very few people have been willing to do, I think, which is look at it purely as a business.
Our view of what the news business is, and about journalism is, is an artifact of a specific period of time, from 1945 basically into 2005.
If you go back to the news business, before World War II, if you start in Colonial days, and if you extend all the way to the 1930’s, the news business worked very differently. It was a very successful business and it was, a lot of people were in it, a lot of people made a lot of money.
But as an example this whole idea of objectivity, the journalist now take as kind of this purer concept that has to be maintained. Like there was really no such thing. Like I always say objectivity’s an artifact of an era in which news businesses were monopolies or oligopolies. In the days when news businesses were fully competitive, subjectivity was out.
And they always say, you know you’re a scumbag, how can you say that? And I’m like well Ben Franklin was a subjective journalist and so stop calling Ben Franklin a scumbag. You know, he actually knew what he was doing. He was actually a very successful journalist, a very successful publisher.
There’s a great book on the news business in the Colonial era in the US called Infamous Scribblers, which was a pejorative at the time for reporters, which could come back into fashion. and, it’s a great articulation of how the news business actually grew up in the US. And then in the 20s and 30s, it got really interesting with figures like Hearst and Pulitzer.
And so, you can actually study the historical news business I think through those two time periods and then you kinda look at post World War II, and you say, well what happened?
Well monopolies and oligopolies got established and so for and it, it was sort of this era of centralization in a lot of parts of the economy.
But it was very clear in the news business, you had one major newspaper per metro area, because of the cost of distribution. You’d have three TV networks nationally because of the limited bandwidth for VHF TV. You’d have a handful of local radio stations. You’d have a handful of magazines. You could only really have three general news magazines on newsstands cuz you just couldn’t afford to distribute more than that. Scale economics kinda ruled the day.
And so, so the news business went into this mode where they kinda said, okay, we’re a monopoly. We’re a monopoly or an oligopoly. And if you’re a monopoly or an oligopoly, it’s incredibly important to stay out of antitrust trouble. And the best way to stay out of antitrust trouble is to not, to not make anybody angry. And the best way not to make anybody angry, is not have any opinions. And so therefore let’s be objective about everything. And then we can we can just basically say, First Amendment objectivity, don’t break us up.
And that worked really well, as long as the distribution was controlled, which it was. The distribution was locked down.
And then the internet showed up. And then the internet basically took the legs out from under all the distribution monopolies and then all of a sudden there are you know millions of voices.
So my point as a business person is okay that’s the past, right, that’s the old days. That’s over. We need to look back to what happened when these things weren’t monopolies and oligopolies.
We need to look back to the thirties and twenties. And back to the colonial era, and we need to basically think about how to build news businesses, media businesses, that thrive in a competitive market. And that has to do with being, you know, incredibly aggressive.
That has to do with having a very strong point of view. It has to do with, not with the idea that you’re gonna be the only point of view, but you’ll be one of many and you have to argue things out. You have to have the right cost structure you have to think about market segmentation and you have to, you have to do all the things that people do when they actually build businesses.
The issue in the news business is that a lot of the executives in the business did not grow up in a competitive market and so they just don’t know how to do that.
So, now what’s happening is, the new entrepreneurs like Jonah Peretti at Buzzfeed, or you know, the people, the folks who built this in the tech industry, TechCrunch and all these things.
You know a lot of these new things, they’re what Pierre Omidyar is doing with First Look. You’re getting very smart people who are coming in from outside with very fresh points of view, building very exciting things. And all the traditional journalists are like, oh yeah that doesn’t count.
But you have to get the healthy business before you get the healthy journalism.
And so then you look at the market size and you basically say, well how big is the market for all this stuff?
And it turns out the market for news is gigantic and it’s growing very fast because so many people are becoming part of the modern world and so many people are getting access to information for the first time.
And so the global market for news is going to be five billion people within ten years and everybody needs to know what’s going on. And so the market’s gonna be large. And I think there are huge opportunities for market growth, but it’s gonna be from companies that are able and that are willing to compete.
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