Todd Harrison: Why I'm Exiting the Digital Media Business
Minyanville pivots toward its future.
There's more to the picture than meets the eye.
-- Neil Young
I started Minyanville 13 years ago; the catalyst was the events of September 11, 2001.
Coming out of Wall Street and stumbling into writing, I was motivated to create a platform that would effect positive change through financial understanding. It's safe to say that I wanted to make a difference and change the world.
The precept of the company was simple yet unconventional. Instead of creating a property that horizontally cut across the traditional audience pyramid, we would build assets through a vertical lens that targeted the entire learning ladder, from the ABCs to the 401(k)s.
We've largely done that. Minyanland teaches kids how to earn, spend, save, and give in a fun and safe online environment. That launched right in time for the financial crisis and continues with 600,000 registered kids and 270,000 registered parents.
We branded the Wall Street bull and bear, Hoofy and Boo, and won the 2008 Emmy Award for New Approaches to Business and Financial Reporting. My alter egos have since migrated to MV Studios, our creative-services arm that works with clients such as Bank of America (NYSE:BAC), BlackBerry (NASDAQ:BBRY), and AIG (NYSE:AIG).
Minyanville.com and Buzz & Banter continue to chronicle the twists and turns of the financial landscape admirably. Over the years, we got ahead of a lot of moves and fell behind a few, too, but editorial integrity has always been the foundation of our bylines.
The community we've created is well-heeled and loyal; our readers spend 18 minutes per visit, and our monthly audience has an aggregate reach of over $500 billion in investable assets.
The Elephant in the Room
When we began this journey, there were no blogs or social media. The economics of online media were entirely more favorable, and the barriers to entry were higher.
We diversified the business model by design: free content monetized through advertising, premium content through subscriptions, the studio on a per-project fee basis, and recurring revenues through licensing (TD Ameritrade (NYSE:AMTD) has been a great partner for years).
Financial media has a competitive advantage over traditional media in that people will pay for better or timelier information. The tiered-content approach is intuitive, as there will always be premium-level programming in a world of basic cable. Even still, the advent of social media and proliferation of outlets created a waterfall of digital information that has made content increasingly difficult to monetize.
The secular online publishing dynamic has shifted quickly, and there's desperation in the air. I would argue the digital media model is broken, with most of the players chasing clicks and treading water. Online financial-content companies have been struggling to reach profitability for years, and many are still hugging the flatline; simply put, it's not a destination we aspire to. (Minyanville was marginally profitable last year.)
And the fundamentals are deteriorating. As syndication algorithms shift and content becomes even more commoditized, the volume of noise is rising with less being said, while CPMs (what advertisers pay publishers) trend lower as a function of automation.
That leaves subscriptions and licenses, which become tougher sells in an information-overloaded, in-your-face multichannel environment. That devolved into a fear-mongering, can-you-top-that headline chase, which is both unfortunate and inconsistent with our brand ethos.
I believe there's a better way to execute our mission, and it's not the online media model.
In speaking with clients and contacts in financial services, they've realized that they must be publishers in a digital world -- broker-dealers in particular need appealing and engaging points of differentiation to connect them with an audience that has reasons not to trust them. Many institutions are trying to reinvent their reputations or forge new ones; they need to be relevant and position themselves for future generations.
Our current business model does not extend to financial services, and that's OK -- it's broken anyway. I do, however, believe that what we've built is extremely valuable to a broker-dealer looking to leverage a fertile audience, acquire new customers, optimize the social sphere, turn clients into community, market through new channels, engage next-generation investors, and build a lifetime relationship.
This, in my view, can be accomplished by attaching Minyanville to an existing financial services firm as an incubation lab and allocating our assets and abilities across their business model. There are several reasons this makes sense -- among them, education, credible content, and creativity are rare commodities on Wall Street.
Financial institutions have been reticent to embrace the online world given regulatory and reputational concerns; they now understand the digital realm isn't going away and the millennial generation -- along with a massive transfer of wealth -- is quickly approaching. If they don't incubate the human capital and creative elements necessary to service the entire vertical across multiple channels, they will be left behind.
Minyanville provides a plug-and-play, end-to-end solution that delivers smart market commentary with editorial rigor through a FINRA- and SEC-compliant mechanism. This is not traditional research; content is the best online currency -- engage the audience in a daily dialogue with one foot inside the firewall (give them a reason to stay in the walled garden) and the other foot outside the firewall (broaden the brand shadow and more effectively target the marketing spend).
MV Studios has demonstrated a unique ability to demystify complex financial topics and deliver award-winning creative results -- and we've focused exclusively on campaigns for financial brands and clients looking to reach that demographic. Animated and live-action video productions, marketing solutions, event production, graphic design, and brand extension -- our team understands the guardrails in finance and the ever-changing mood of the markets.
Even Minyanland drives value as it provides access to parents with children who are interested in better financial habits. And it isn't a marketing ploy to gain side-door access to a desirable audience; throughout our corporate life cycle, we have demonstrated a genuine passion for empowering people to make better and more informed financial decisions.
So that's the vision as seen through my eyes. I finally have clarity: The digital media model is broken. I also believe that there is demand for our assets and abilities; entry into this space is a buy-or-build decision for the brokers. We'll soon see if 13 years later, we're in the right place at the right time -- the market will determine fair value, and we'll know by year-end.
As we pivot toward financial services, we'll publish our real-time smart market commentary, work with clients to drive results, and satisfy our obligations in the marketplace. All the while, we'll maintain an open dialogue with our community as we explore next steps with potential partners. I don't know what the future holds, but we're shifting our strategic approach and communicating in good faith.
I speak for the entire team, and I'm sure a lot of readers through the years, when I share my desire for this process to unfold in a manner consistent with our collective best interests. And thank you for your support as we progress toward the next stepping stone of our corporate evolution -- we do so with our eyes wide open and our heads held high.
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Todd Harrison is the founder and Chief Executive Officer of Minyanville. Prior to his current role, Mr. Harrison was President and head trader at a $400 million dollar New York-based hedge fund. Todd welcomes your comments and/or feedback at firstname.lastname@example.org.
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