In its tenth year in business and after a series of publisher purchases – including The Players’ Tribune and FanSided – Minute Media completed its first tech-centric acquisition in 2021 with the takeover of the technology platform from Wazimo edition in November. The acquisition reflects how technology is becoming a more important component of Minute Media’s overall business and how its B2B technology revenue intertwines with its advertising revenue.
“The B2B side of our business will eventually [in 2021 having accounted for] 60% of our income. That’s a big part of this business. We are as much a technology company as we are a publishing company,” Minute Media President Rich Routman said on the latest episode of the Digiday podcast.
The lines between Minute Media’s technology and publishing businesses are even more blurred than that. This percentage of overall revenue represented by B2B actually includes advertising revenue. Although Minute Media enters into certain transactions in which it licenses its technology to companies for a fee, it also structures transactions to include an advertising revenue sharing component, which may also result in Minute Media selling advertisements for its technology clients. .
“As we become more flexible in our business model, B2B revenue has increased significantly through B2B transactions based on ad-supported revenue sharing or B2B revenue based on licensing fees. But the B2B business as a whole is more important than [owned-and-operated] brands,” Routman said.
Here are some highlights from the conversation, which have been edited for length and clarity.
Build or buy
In terms of technology, we were in construction mode. We felt like with the team we had and the expertise we had in-house, there really wasn’t anything we were focused on that we couldn’t build on. And as we’ve started to work more closely with Wazimo – and obviously it’s very important for every publisher to get to grips with first-party data – it could be a great complement to Voltex. The development pipeline around something like this is not two months, because otherwise we would have built it ourselves. It was going to take us a long time to catch up.
Margin vs profitability
At this stage of the activity, we are more interested in the margin than in the profitability because we have not finished making acquisitions. Whenever you buy a business, it’s not just about acquiring the business and its profitability; that’s how much you’re going to invest in that business, once you acquire them, to get them from point A to point D. If you buy a business solely on the basis of how profitable it is today, it probably won’t be also profitable tomorrow. We are not a private equity firm.
Break even
Break-even is really what we’re focusing on right now. The days of needing to invest millions of dollars to grow the business every year and shred that capital are kind of behind us at this point. Rather, it is about how we choose to deploy capital. We deploy it through mergers and acquisitions. We deploy it in technology. And we deploy it by strengthening our teams.
An operating margin logic
I’m really interested in understanding the operating margin of each of our individual assets. What does FanSided look like based on operating margin? Because it has a lot of shared resources. He has finance and HR coming from central. So, yes, we can look at overall profitability, but because we’re in a number of different areas, you want to look at whether this tactic or asset or technology is performing well on an operating margin basis? Are the people in charge doing the smart things for the business to make it profitable today or in the future?
