Part 2: The Future of Media-for-Equity

Happy Tuesday Friends,

We’ve been a bit quiet over the past few weeks as we took some time off for a much-needed digital detox. Now, we're back and refreshed.

Quick newsletter update: Our writing over the past several months had resulted in us receiving several requests from both companies and creators eager to explore potential equity opportunities. It’s been incredibly rewarding to see our ideas build demand in such an organic way, but we're spread a bit thin as we head into the fall. Given these exciting developments, we will be publishing two times per month. This will allow us to continue serving these creator equity requests, while ensuring the quality of our writing remains high.

Now, let’s turn our attention to the future of media-for-equity. In our last piece we explored the origins of the media-for-equity model and hinted at the transformative potential of the creator economy. We believe as the creator economy continues to grow and mature, it will reshape how consumers and businesses are influenced and make purchase decisions. This shift will likely make media-for-equity more relevant than ever, though it will likely take on new forms, moving away from the traditional models where established media companies controlled the market and all advertising inventory.

Let’s look at why this may be the case.

Four Phases of Modern Day Media 🪜 

We've broken down the last 80 years of the media industry into four distinctive phases where technological advancements and societal shifts have shaped media consumption patterns. The graph below shows the exponential increase in the amount of content being produced alongside the erosion of consumer trust in traditional media.

The point of the visual is to show that although the consumer has never had more choice in what content to consume, their trust in traditional media has steadily declined and is now rotating towards independent media and creators.

Let's dig deeper into the two most recent phases:

Phase 3: The Streaming Era (2000s - 2020s)

This phase began in the early 2000s with the rise of the internet and the development of streaming technologies. Companies like Netflix, Hulu, and later, Disney+ and Amazon Prime, transformed how audiences consumed media by offering on-demand access to a vast library of content. This phase saw a significant increase in the amount of available content and a shift in consumer behavior towards binge-watching and personalized viewing experiences. The rise of digital and social media began to challenge traditional media's monopoly on information. The 2016 US presidential election was a turning point where, “fake news” and misinformation spread through social media and the perception that traditional media was biased. This period saw trust in mainstream media reaching new lows, with many people turning to alternative sources for their information. Here is an interesting statistic that sets the stage for the next phase:

Phase 4: Independent Media (2020s - Present )

We are currently in this phase, characterized by the rise of independent content creators who operate outside of traditional media frameworks. Platforms like YouTube, TikTok, and Patreon have enabled individuals to produce and distribute content directly to audiences without the need for traditional gatekeepers. This phase is marked by the decentralization of content creation, an explosion of niche media, and a continued erosion of trust in mainstream media.

At first glance, it might seem like Phase 4 resembles Phase 3 - The Streaming Era, which gave birth to services like Netflix and Hulu. But in reality, we believe it’s going to be very different. Phase 4 and the rise of independent media is reorganizing the entire media stack.

• Content Creation: Barriers to entry have been removed. Anyone can become a content creator. Individuals have become their own networks.

• Content Distribution: Bandwidth and internet penetration are reaching unprecedented levels and will continue to increase. This has made distribution of high-quality content free and seamless.

• Content Consumption: Audiences are increasingly gravitating towards individual creators as their trust in traditional media continues to decrease. This is creating the ability for consumers to curate personalized viewing experiences of content they trust on platforms like YouTube.

The entire media stack - production, distribution, and consumption - is now decentralized. The biggest change we are experiencing is around content production and it should not be understated. We do not know exactly what the future will hold, but we know that frictionless, free content creation combined with AI-based production and editing tools will lead to an explosion of creativity that will challenge traditional streaming giants.

Decentralization Of The Entire Media Stack 🕸️ 

Below is a visual representation of the decentralization of the media landscape starting with the 1980s and cable TV. This point of the visual is to show individual creators are becoming the new studios and production houses and their independent channels are replacing centralized networks.

This decentralization of both content creation and distribution is opening the floodgates for information and endless consumer choice. As the entire media stack continues to decentralize, audiences and communities are increasingly forming around individual creators on nearly every topic imaginable.

The New Era of Product Discovery and Influence 🔎 💵 

Phase 4 and the rise of independent media can be summed up by the following:

• Decentralization of content creation

• Explosion of niche media on every topic imaginable

• Continued erosion of consumer trust in mainstream media and institutions.

These trends will fundamentally change how consumers discover products and services and make purchasing decisions. Creators have already established themselves as trusted voices, guiding consumers toward products that resonate with their values. As a result, advertisers will need to rethink their strategies, increasingly collaborating with creators to reach their target audiences. We believe individual creators will soon play a central role in influencing purchase decisions across all aspects of life. As they become critical distribution channels for companies of all sizes, media-for-equity will become increasingly important. But, the concept will need to evolve to fit this shifting landscape.

You can read more here on different media-for-equity models we see forming - Different Creator Equity Models

It Will Not Be Linear 📈 

This all sounds great, but we want to provide a bit of a reality check with where we are today. Many consumer brands often start 100% online to prove demand for their product. They eventually find themselves forced to enter traditional retail if they want large-scale distribution and continued growth. This is because bricks-and-mortar still accounts for nearly 80% of all retail purchases. But, the reality is when a company sells a product through traditional retail, they have to work with wholesalers /distributors that take substantial margin and often pay 60-90 days after receiving the product. Not only is this challenging for brands, it also creates multiple layers of middlemen between producers and consumers making it difficult for consumers to understand what’s in their products, where they come from, and who is involved in making them.

We believe the creator economy and e-commerce will continue to grow and chip away at the dominance of traditional retail. As consumers increasingly discover products through creators, the challenge becomes: how can build direct distribution at scale and bypass traditional wholesale? We see media-for-equity partnerships between companies and creators as a powerful way to do this.

Have good week and remember to Go Direct!

Jordan & Scott