No 303: Newsletter Economics

On newsletter economics. Perhaps, digital media growth was intended to be slow and methodical. It could be said that the best models for media are devoid of venture capital. Without it, publishers would have to grow their audiences reader by reader, transaction by transaction. For many newsletter-driven media companies, this has been the method. Building a moat around a product once involved volume by way of Facebook and Google; today it means building a world without either. Customer acquisition principles in the realms of direct-to-consumer products and independent media are quite similar. Capital efficiency and acquisition independence are the aims of each industry. The races are long and unceremonious but the benefits of organic growth remain the treasure at the end of the rainbow.

In 2016, WIRED published an article entitled The Blissfully Slow World of Internet Newsletters. In the article, it discusses a few of the pivotal email-driven media publications of this era (2015-2019):

This isn’t a new digital gold mine poised to monetize all our eyeballs. Sure, there are some professional-class newsletters. Ben Thompson’s Stratechery costs $100 a year. Lena Dunham’s Lenny Letter has 400,000 subscribers; theSkimm, a news summarizer, has over 1.5 million. But from what I’ve seen, more newsletters are in the long tail—publishing for audiences from the single-digit thousands to the dozens. They’re engineered not for virality but originality: It’s a chance to listen in while someone thinks out loud.

Today, nearly every major digital publication has a newsletter strategy. Condé Nast just announced that they’ll be launching a new vertical called “Vogue Business.” And they aren’t the only ones. The power of the email medium is two-fold, it’s independent of the aggregators and it helps to develop 1:1 relationships with community members. Stratechery’s Ben Thompson is the authority on aggregation theory. In his view, brands and publishers are not truly safe unless they can operate independently. In today’s member letter, he wrote:

What is clear, though, is that the only way to build a thriving business in a space dominated by an Aggregator is to go around them, not to work with them. In the case of publishers, that means subscriptions, or finding ways to monetize, like the Ringer, beyond text. For web properties it means building destination sites that are not completely reliant on Google. 

The Buzzfeed Lesson

For many in the media industry, “going around” an aggregator means that newsletters are a key component for the hedge against the duopoly of Facebook and Google. In a recent blog post by David Perrell wrote: “Powered by organic distribution, “Need Content” publishers are armed with competitive advantages that cannot be bought on Facebook, Instagram, Google, or Amazon. Brand loyalty, trust and credibility can’t be bought. It must be earned over time.” While Amazon is competing against the duopoly in product discovery, the newsletter media industry and its enablers (Mailchimp, Substack, Memberful) are helping media companies compete for readership loyalty. There are essentially three types of newsletter products:

(1) a newsletter that provides a traffic driver to an existing site. A great example of this is Digiday’s recent foray into a thrice-weekly retail newsletter called the Digiday Retail Briefing led by Hilary MilnesFor Digiday, Milnes and team take extra care to present unique perspectives and exclusive editorials within the email product.

(2) a newsletter that operates as testing ground for future digital verticals. Look no further than today’s news that broke in the Financial TimesVogue Business will start primarily as a newsletter, published twice a week and edited by Lauren Indvik, former editor-in-chief of Fashionista.com. There are 21 employees working on the venture, including six writers. The project is rumored to be a newsletter-driven, B2B media publication for those interested in fashion, beauty, and luxury retail. Like Paul Munford’s Lean Luxe newsletter, the publication hopes to attract the hearts and minds of modern and traditional brand insiders.

(3) The newsletter that is the medium.

Lean Luxe Founder: Paul Munford

While each publication is unique, for media companies like Stratechery, Loose Threads, Lean Luxe, TheSkimm, and 2PM – the primary product is the email. And the economics of these businesses have one similarity – the readers support the product in some way or another. At Lean Luxe, Founder Paul Munford supports his weekly letter by partnering with short-term, audience-focused brand sponsors. These aren’t outside advertisers. Rather, they are businesses that already exist within his ecosystem, amplifying their presence by way of his newsletter feature. Here’s what Munford had to say in a short Q&A with 2PM:

When did you see a need for a newsletter? how do you go about addressing this need?

The newsletter was the priority from day one. I chose this path because I knew that I wanted to own the relationship and have a direct line to the consumer — that that was the most fundamental thing going forward for all companies, media or otherwise.

I think plenty of media co’s are still grappling with this concept, the balance between their true customers and focus being between the end user (and that relationship) versus the advertiser. I never thought that was sustainable and have always viewed that as such a limited business model considering what you can do today as “media” operation, and how your role can now be rethought or rebuilt around that idea of more than just content.

How does your audience support your work?

The audience supports my work by reading, by sponsoring, by spreading the word, by emailing thoughts, tips and ideas. And generally being engaged with the Lean Luxe brand – as limited as it is – in a way that’s meaningful.

Any thoughts on traditional publishers infringing on your space?

No big thoughts really and I mean that.The competition makes me shrug a lot; I like to shrug. They’ll just mostly be focused on content-only products as the big thing, perhaps with some events mixed in. But they won’t bring a distinctive point of view, they won’t be building out an engaged and powerful community, and in many, many places they’ll simply be dropping the ball.

Not remotely worried – especially since I don’t consider media or publishing to be the core competency of Lean Luxe. It’s part of the package, sure, but it’s not the future model and really just serves to spark conversations between folks. For us, media is important, but it’s more of a means to a larger end, not an end goal in and of itself. It’s just a complement to an overall larger thing we’re building.

Lean Luxe also benefits from a few key innovations: a partnership with Lightspeed Venture Capital and a Slack channel that is one of the retail industry’s leading sources of banter and discovery. To receive an invite to the Lean Luxe chat, you must be an active subscriber for several months. And recently, Nike partnered with Lean Luxe to brainstorm new direct to consumer products. Munford’s company has yet to raise any outside capital. In category No. 3 of newsletters, this is in contrast to TheSkimm.

See: The Indie Digital Publisher List

While, TheSkimm has the benefit (and responsibility) of nearly $29 million raised – their profile is still closely aligned with the third type of newsletter product, for now. Founded by Danielle Weisberg and Carly Zakin, the media company has attracted the attention of many of the titans in the industry, to include: Oprah Winfrey, Sarah Blakely, Google Ventures, Homebrew, and RRE. The original newsletter has provided a platform that now includes its own native app, podcast series, and calendar technology that syncs directly to your calendar of choice so that you don’t miss the cultural events that are important to its readers (I am one of them).

The blissfully slow world of 2pM

For newsletter-driven companies like 2PM growth experience has been slow and methodical. I had the idea for the newsletter in December 2015. Initially, it was for a few dozen or so friends who wanted a digital destination for curiosity and research. We all shared a desire for a distraction-free newsletter that tracked the ways that media, branding, logistics, commerce, and data science were intersecting and amplifying one another. At the time, every publication – regardless of its intended focus – was broadcasting the American political discourse. And between the distraction of politics and the heads-down grind of working in hyper-growth industries – there wasn’t a place that helped guide executives and executives-to-be back to the bigger picture.

What is happening now in the context of everything else? What will happen next? How do we prepare? How do we respond?

I was quietly building 2PM while also focused on operations in the real world – building commerce operations for content providers or partnering content providers with commerce solutions. About two years into the slog of building a worthwhile audience, I launched the Executive Membership at 2PM. By then, 2PM became a 60-70 hour per week job between writing original content, curating meaningful and valuable letters, and updating 20-50 database data points per day. A paid membership allowed the top 10-15 percent of our engaged audience to support the whole. When I re-platformed to WordPress in the beginning of 2018, it allowed me to begin building a suite of tools for members to track commerce and commerce-adjacent industries. And it added a community of industry leaders looking to collaborate and build with one another.

In addition to traditional publishing, I felt that maintaining an operational advantage was important. When 2PM publishes, it is necessary that the perspective is that of an operator within the community, not just an observer. The addition of agency executive Meghan Terwilliger solidified this core tenet of 2PM’s product voice. To amplify this perspective to our published data an editorial, 2PM launched invitation-only Growth Partnerships in Q3 of 2018. This allowed 2PM to partner with leaders of the industry throughout logistics, agencies, brands, and financing.

The primary constraints to growth and sustainability are: audience loyalty, revenue, and retention. Each newsletter addresses these needs in their own ways. As Perrell recently wrote, “content and commerce are converging.” For newsletter-driven media companies, quality and effort are differentiators. Platforms like these can rarely withstand days of failure because the communities are small and value and consistency are the priorities to them.

As the digital publishing industry continues to shed jobs and pivot away from aggregators like Facebook and Google, newsletter media’s principles will influence the traditional media’s largest companies: (1) slow and sustainable growth, (2) community, and (3) subscription-based revenue. Teams will be leaner, capital will be more efficient, and platforms will answer to the community – not advertising partners. The blissfully slow world of internet newsletters may produce the blueprint that addresses digital media’s chief concerns. Namely: who is our loyal audience? And how do we achieve a path to profitability?

Read your No. 303 curation here.

Report by Web Smith | About 2PM

No. 302: The Hundred Year Titan

The direct-to-consumer (DTC) era has yet to influence how we consume big budget, blockbuster films. To watch the latest Marvel Studios productionconsumers still have to endure the trip to the movie theater, eat the expensive popcorn, and pay the exorbitant prices for soft drinks. In a recent conversation with the Cofounder of AfterMarq and Executive Member Vincenzo Landino, I learned why the DTC era has yet to address the demand for big budget film premieres in the home.

The key questions:

  • Could AMC Theaters and Netflix partner to bring cinematic premieres to our televisions?
  • Why are theaters so reliant upon concessions for revenue?
  • Will ‘day and date’ releases be likely in the future?
  • Which studio is best positioned for the DTC era?

A day and date release combines theatrical release with a video-on-demand offering while the film is screening in the theaters. The length of this window is typically 60 days and there is a notable disparity in the price by venue. According to an Indiewire article from 2015, traditional VOD rental costs a consumer around 50% of the price of the theatrical showing. Traditional studios make more money on theatrical releases than VOD releases. Non-traditional studios (Amazon, Netflix) do the same, except their economics are reversed. Streaming is more profitable for them than theatrical release (though brick and mortar releases unlock awards season potential). We will see on occasion. Some recent examples include Amazon’s award-winning Manchester by the Sea or Netflix’s Roma.

Both, Manchester and Roma, are films produced by a streaming service. The films were provided a “day and date” release to improve their chances in award season. But we’ve yet to see a traditional film studio (Paramount Pictures, Twentieth Century-Fox, Sony, Universal Pictures, United Artists, Warner Brothers Pictures, or MGM) lean into a day and date release for a mainstream film. There is a significant reason for this. None of the major studios of the the time controlled the exhibition side between 1948 – today. Only Walt Disney’s Studios is in position to benefit from end-to-end control, today.

The market power of the studios is less than it was [in the 1940s].Per se offenses like price fixing and market allocation are still illegal. But other horizontal arrangements between competitors or vertical arrangements between companies and their partners are more likely to be upheld today.

Michael Carrier, an antitrust expert at Rutgers Law School

Long before the modern DTC era, movie studios did control the product from production to the theater house. This changed in 1948. The Paramount case, and its resulting decrees, changed the motion picture industry for decades. Between 1945 and 1948, the Supreme court mandated a separation between film distribution and exhibition by requiring that the major studios divest distribution or their theaters. It was a near unanimous decision to divest in the theaters and not divesting their distribution businesses.

Understanding the 1948 Paramount Decrees

When Netflix announced to shareholders that players like Fortnite gave executives more anxiety than rivals like Hulu, YouTube or HBO, they explained with this:

Our growth is based on how good our experience is, compared to all the other screen time experiences from which consumers choose.

This is an echo of a sentiment Reed Hastings, CEO of Netflix, told Fast Company in 2017 in an article titled Sleep Is Our Competition:

It’s 8:00 in the evening, you’re next to your TV–which remote control do you pick up: PlayStation remote? TV remote? Or do you turn Netflix on?

Understanding Paramount Decrees: research and breakdown by 2PM contributor Tracey Wallace.

It makes sense that Netflix views Fortnite as a primary competitor. For younger people, two years ago, the answer to Hastings 2017 question would have been Netflix. Now, that’s being challenged by gaming platforms or by subscription services like MoviePass or AMC Stubs A-List. While MoviePass remains on the decline, thanks to poor unit economics, AMC’s native service boasts a reported 600,000+ subscribers paying at least $19.95 per month. Services like AMC’s are bridging streaming media prices and the in-theater premiere experience.

Of course, Netflix has its own premieres like the acclaimed Bird Box or Bandersnatch or Outlaw King. Each featured a Hollywood-esque budget and at least one A-lister.

Netflix finished up 2018 with 139 subscriptions worldwide, up by 29 million from the beginning of the year. The incredible subscription growth clearly justifies hiking membership prices in the US. Netflix reported $4.19 billion in revenue, just under international forecasts of $4.21 billion. 

Netflix is experiencing a renaissance in audience growth and fanfare. What is stopping Netflix from implementing a direct to consumer approach to in-home blockbuster films?

The The Paramount Decree, a 1948 antitrust law, prevents it.

In this landmark US Supreme Court  case, it was determined that movie studios could not own their own theaters or grant exclusive rights to preferred theaters. At the time (1945), film studios like Paramount owned – either partially or outright – 17% of the theaters in the country. This accounted for 45% of American commercial film revenue in 1945.

The 1948 decision caused a massive recession in movie studio revenues, lasting more than two and a half decades. In 1972, the release of The Godfather became the first modern blockbuster and the first project to increase movie studio revenue to pre-Paramount Decree levels.

The ruling is also considered a bedrock of antitrust law and is often cited in cases where issues of vertical integration play a prominent role in redistricting fair trade. But in 2019, Netflix boasts 139 million subscribers worldwide and produces a handful of their own minor premieres, turning our living rooms into intimate cinemas. Fortunately for Netflix, the Department of Justice recently announced that it would review the 1948 decree that prohibited Hollywood studios from pursuing a DTC approach to owning and operating theaters.

The review of the 1948 antitrust ruling, and its potential reversal, would give major distributors, exhibitionists, and streaming service providers –  like Netflix or Disney – real power to run more like direct to consumer entertainment brands. The revision of the ruling would allow Netflix to seek partners with companies like AMC Theaters (or the aforementioned studios) to co-brand in-theater and in-app premieres.

It’s unlikely that Netflix and AMC Theaters will partner when the time comes, but the line in the sand is marked deeply. Once those antitrust laws expire, these two companies stand to gain a lot from cooperating with studios. But not the most. 

The 100 year titan in waiting

Buena Vista, a subsidiary of Walt Disney Studios (Revenue, 2018)

Netflix is the dominant streaming service with over 139 million paying customers. AMC Theaters has the best prospects in all the cinema-side of the film industrial complex. The company has successfully navigated the Moviepass economy by instituting its own growing movie-watching program ($19.95 / month). While heavily dependent on revenue driven by concessions and alcohol, the membership program grew to over 600,000 users in its first year. It’s dependence on external revenue (concessions) is the program’s flaw.

While it is fun to envision a world where Netflix offers an AMC Premiere package where at-home consumers pay $50 for the rights to rent a big budget blockbuster on its opening day, AMC remains the middle man. According to Matthew Ball, an analyst and former Head of Strategy for Amazon Studios:

[AMC] owes 55-67% per ticket [to distributors], with floors. [Concessions] are a big priority because of confection economics. Like gym memberships, these subscriptions only work if predicted use is <x%.

According to CNBC: in the past year, Disney has lost nearly $1 billion in its streaming business between its investment in Hulu and its work with BAMtech, the technology behind ESPN+. But DOJ’s reversal of the 1948 decree could change everything for Walt Disney Studios, a company that began just 25 years before the 1948 decision. And was but a blip on the Hollywood radar, at the time.

Disney is hoping that, over time, millions of paying customers will subscribe to Disney+ for its new original content and library of Disney movies and TV shows. Pricing hasn’t been disclosed. Netflix, which announced its quarterly earnings on Thursday, has 139 million global subscribers and just informed them that it’s raising prices by 13 percent to 18 percent.

Alex Sherman for CNBC

Disney is best-suited for the DTC era. There is organic demand, loyalty, and the mechanisms to deliver it to your doorsteps. When the company announced an end to its streaming deal with Netflix, the writing was on the wall. The Disney+ product is slated to be the exclusive home for Disney films, television projects, and other original programming. According to Bob Iger, Disney’s CEO, the streaming service is the company’s priority in 2019-2020. He’s also assured the press that major releases (Marvel Studios, Star Wars, etc.) will not go straight to the streaming service.

But through the lens of the Paramount Decrees being overturned, it’s smart to consider the implications of Iger’s words vs. Disney’s impending actions. When the US Department of Justice reviews and amends these decrees, Disney will have the power to stream one of the highest grossing films in history into your home on the night of its premiere. And they will. Disney will be able to command a fee that is more lucrative than traditional day and date releases and at margins far greater than their streaming competitors (Netflix), marketplace vendors (Apple’s iTunes) or cinema competitors (AMC Theaters). Before Walt Disney Studios’ 100th anniversary, you will be able to stream a blockbuster premiere on your devices. With respect to the overturning of the Paramount Decrees of 1948, this is Walt Disney’s end game.

Read your No. 302 curation here.

Report by Web Smith and Tracey Wallace | About 2PM

No. 301: Influencers and Transactional Authenticity

Just when we believed that we reached peak influencer, we are surprised yet again. We’ve favorably covered the “first family of influence”, in the past. And quantifiably, there isn’t a media conglomerate that comes close to the influence of the Jenner / Kardashian family. This week, one of them reached a new level by “bravely” discussing acne – the presentation and build up left a fractured audience in the wake of the brand partnership announcement when it was revealed to be a paid deal.

A day before the reveal, Kris Jenner, the model and entrepreneur’s mother, teased the reveal of her “deeply personal” issue on Twitter. Tabloid speculation run its course. The roll out was optimized for social media but many were left asking: is this really what’s become of influencer-driven advertising? Vox Media covered the advertising “bait and switch” in depth here

2PM Contributor and Founder of Doris Sleep: Tracey Wallace

Proactiv’s recent partnership with Kendall Jenner was a test of authenticity. It also may have been a watershed moment for influencer culture. Yes, it’s the most recent example of the status being used to present a vulnerable issue. In this case, adolescent acne. But authenticity is a currency all its own and volume of audience doesn’t always equal magnitude of impact.The controversy around Proactiv’s newest advertising campaign is an early sign that consumers may be beginning to discount command of advertising’s most influential family. Consumer skepticism is the antidote to influencer culture and it seems to be growing.

The focus on influencer authenticity comes as brands have begun to use more “real people” over models and entertainers. Brands are beginning to highlight people just like us but without the modelesque lighting, the photoshopping, or the narrative embellishment. Just scroll through the feeds of Andie Swimwear, Flamingo, or Chubbies for quality examples of this type of visual marketing.

These brands are succeeding because of, not in spite of, their focus on authenticity.

  • Andie Swimwear: Swimsuits made by women, for women.
  • Flamingo: We make body care, starting with hair.
  • Chubbies: The Weekend Has Arrived.

For influencers, the understanding of how partnerships like Proactiv and Kendall Jenner’s come to life diminishes empathy and therefore trust in an ad’s authenticity. This is especially the case in the era of Netflix and YouTube, where star power (influencer marketing) is used to efficiently monetize audiences. Consumers want authenticity.

The successes of influencer marketing is saturating the market. From celebrity influencers to micro influencers, consumers are being inundated by influence. Some influencers are faking brand deals to gain credibility:

Transitioning from an average Instagram or YouTube user to a professional ‘influencer’—that is, someone who leverages a social-media following to influence others and make money—is not easy,” writes Taylor Lorenz for The Atlantic. “After archiving old photos, redefining your aesthetic, and growing your follower base to at least the quadruple digits, you’ll want to approach brands. But the hardest deal to land is your first, several influencers say; companies want to see your promotional abilities and past campaign work. So many have adopted a new strategy: Fake it until you make it.

There are sincere and authentic influencers who are not embellishing their lifestyles or influence. Often enough, these are the media personalities who are slowest to launch merchandise or product lines. Figures like Youtube’s Casey Neistat or pro surfing legend Kelly Slater are having to contend with a very cumbersome question:

How do you build an authentic advertising or commerce model? And how do you do it without ostracizing long time fans and newcomers?

As 2PM has previously covered, there are businesses that focus specifically on partnering with influencers and digital publishers to create, market, sell, and distribute merchandise. We’ve compiled a list of notable commerce partners:

CompanyEstimated Rev. RankLocationFocusLead FoundersEmployeesTop PartnerFully vertical?
Teespring1CaliforniaCreatorsWalker Williams652Lucas The SpiderYes
Amazon 2WashingtonMedia Jeff Bezos 267,723BuzzFeedYes
Red Bubble
3AustraliaCreatorsMartin Hosking777N/AYes
Spreadshirt4Liepzig Creators Phillip Rooke296N/ANo
Rivals / Merchline5FloridaCreatorsNathan Murray17Dude PerfectYes
Merch Table

6Kansas Indie Bands Sean Ingram 42Rufus Wainwright
Yes
Homage7Ohio LicensingRyan Vesler122The NBAYes
BreakingT's

8North CarolinaSportsJamie Mottram 7Donovan Mitchell
Yes
Design By Humans9CaliforniaLicensingJeffery Sierra48Star WarsYes
500Level 10TexasLicensingBrett Williamson20Kevin DurantYes
Amplifier 11TexasCreatorsJoel Bush65Glennz TeesNo
Represent

12CaliforniaInfluencersBryan Baum46Pewdiepie
No
Bonfire13VirginiaCauses / Justice Kevin Penney55Together We CanYes
Rage On14Ohio
CreatorsMike Krilivsky 41Hello KittyYes
Moby Dick Unlimited

15Ohio InfluencersBrandon Fuss-Cheatham10Logan Paul
No
Everybody.World16CaliforniaConcert GoersCarolina Crespo12Gurls TalkYes
Memberful17FloridaMedia GroupsDrew Strojny4StratecheryNo
The Loyalist

18New York AthletesMaxwell Ritz10Alexander Rossi
No
Merchbar19California CreatorsEdward Aten9Donald GloverNo
FanFiber

20HollandCreatorsAlbert van den Broek20Dashie XP
No
Cotton Bureau

21PennsylvaniaCreators Nate Peretic / Jay Fanelli9MKBHD
Yes
FanJoy

22CaliforniaCelebrities Chris Vaccarino17Jake Paul
Yes
Manhead Merch23TennesseeBandsChris Cornell17Fall Out Boy
Yes
Merchcamp24CaliforniaMedia GroupsKenneth Borg4Tinder

No

There is such a demand for appealing to influencers and influential moments that an entire industry has address demand.

Taking a page from the eCommerce playbook

As DTC analysts David Perell and Nik Sharma have often cited, the most resilient brands are audiences. And for influencers to maintain their audience, there must be an evolution from the existing structure of often-gimmicky merchandising and advertising via third-party transactors. And to a method that achieves an authentic experience bolsters user experience and belonging.

The technology seems to be mature enough to address this new standard. Headless Commerce services are offered by BigCommerce, Shopify, Adobe, and ElasticPath. These services are helping to define the possibilities of fully-integrated, content-driven commerce.

Alecia, an early headless commerce pioneer, has taken a first step in this direction with their proprietary video platform. From 2PM Member Brief – Headless Commerce:

Alecia is a company that films and streams original content, letting you shop what you see. The app and the site offer a seamless content and commerce presentation for the viewer. As the product appears on the screen, it is offered (in limited quantities) along the right side of the broadcast. If you’re logged in, purchasing is essentially a two click process. Consumers aren’t clicking to an eCommerce site or an external cart. Instead, the shopping cart is a component of a headless operation, an API call to the cloud-based shopping platform that is external to the featured content.

To date, no such solution exists for influencers on major platforms like YouTube, a place where it could have the most value. way content and commerce in media has begun to alter our understanding of which publications have the most loyal audiences. From 2PM No. 280:

The digital landscape is changing beneath our feet. For publishers to continue building organic readership, they must become brands. Operating as a source of content is no longer enough. To do that, efforts can no longer be siloed, the traditional factions of legacy-styled newsrooms must fall.

It’s no longer just about eyeballs and what influencers can charge for their collection of them. Optimizing for transactional engagement could have a positive effect on the influence ecosystem. In order to earn actual transactions, consumers – more often than not – must sense sincerity, community, and loyalty. By improving bottom-of-funnel operations, influencers can address the needs of community members (potential consumers) without disrupting their experiences.

Ready for increased interactivity?

Millennial audiences are ready for built-in video interactions as evidenced by Netflix’s recent success with Bandersnatch, the “choose-your-own-adventure” augmented film powered by remote or mousepad. These types of media experiences shorten the length between watching and interacting.

But Bandersnatch is more than just a blurring of games and TV. Such interactive adventures could easily become a new revenue source, too, through super-powered product placement and eCommerce. With interactivity comes a new slew of data, and the ability to layer in products, product information and ways to buy. You can bet Amazon is figuring out how to ties its billions of dollars worth of programming into its vast e-commerce operation. And just maybe so are Disney, Apple, Warner Media and Walmart.

David Bloom for Forbes

One company that went unmentioned in Bloom’s rundown was Google. Google has the most to benefit from engineering a headless commerce solution for YouTube. Consumers and creators would both benefit from an experience that allows consumers purchase from the screen without an external redirection.There is one thing that YouTube has built into its platform that Netflix, Disney, Warner Media and Walmart do not: intuitive user control.

Expect to see a continued shift towards interactive formats; while headless commerce opportunities are further down the line – consumers are already being molded to welcome them. But the media engine of this age is the widely beloved influencer. We’re suggesting that we should reconsider how they’re influence is measured. No, influencers shifting to a headless commerce operation won’t immediately prevent media moments like the Proactive “bait and switch.”

Moving influencers away from optimizing for media impressions, social mention volume, and traditional publicity could alter things if and when creators see what can be accomplished when commerce transactions are closer to the starting line. Commerce relationships develop an authenticity that advertising doesn’t quite need. As interactive video technology continues along its adoption cycle, influencer-creatives would stand to gain a lot from building stronger relationships with their audiences.

By moving transactions closer to the top of the top of the funnel, fans and potential consumers won’t be left wondering: what’s the gimmick? Headless commerce can present that solution in a subtle but effective way by leaving the opportunity to transact to the viewer. Consumers demand authenticity from their influencers. This, especially as the lines between genuine interest and earned media continues to blur. 

Read your No. 301 curation here.

Report by Tracey Wallace and Web Smith | About 2PM

Tracey is a 2PM Executive Member and Contributor, the founder of Doris Sleep, and the Editor-in-Chief at BigCommerce.