It's a panicky time in digital media. And the millennial-aimed news publication Mic is often seen as the poster child for all that ills the industry.
CEO Chris Altchek wants to set the record straight: Mic is going to be just fine.
First things first. Yes, there were layoffs. Yes, it pivoted to video at a challenging time. But no, the publisher isn't in danger of shutting down anytime soon, Altchek says. Having raised nearly $60 million to date, it's not about to run out of money. While there has been "inbound interest," he says, Mic is not actively looking for a buyer. And from a revenue perspective, the business has gotten off to a strong start to 2018.
"This quarter will be the biggest booking quarter in the company's history ... in terms of revenue closed," he told Business Insider. "We expect to grow revenue meaningfully."
Navigating digital media's very bad year
Still, the headlines have been dire of late. When Mic had layoffs last year and decided to emphasize video over search and articles, its website traffic plunged. According to comScore, Mic now reaches roughly 4 million to 5 million users a month in the US, compared with 20 million not long ago.
Fair or not, the company became associated with the digital publishing world's rocky "pivot to video."
Brutal stories soon followed, such as "Is Mic's Pivot to Video Spinning Out of Control?" from Splinter, or "Mic's Drop" from The Outline. The Columbia Journalism Review called Mic "a cautionary tale." Industry chatter had Mic going through a fire sale, facing mass departures, and losing all advertiser business.
"When we did our last financing last year, we saw around the corner," Altchek said. "We saw that investor sentiment was changing. The advertising marketplace was going to be challenging. And so we made a couple of strategic decisions. One of them was get on the road to profitability ASAP. So we made a team restructuring last year, before a lot of other companies did. And we took a lot of heat from it.
"Now a bunch of companies did much bigger things than we did and took much less heat from it."
Following layoffs last year, Mic has about 133 employees, including contractors. The company is on track to grow revenue 60% this year versus last, based on its latest first-quarter run rate; and its valuation is north of $100 million, according to people familiar with the matter.
No longer waiting for a Facebook ad windfall
Altchek has a point; Mic's not alone in all this. BuzzFeed and Vice Media missed their revenue numbers last year. Both BuzzFeed and Refinery29 have had layoffs. Mashable sold to Ziff Davis for peanuts compared with its previous valuation.
And, of course, after the latest Facebook algorithm tweak, the women-focused publisher LittleThings abruptly shut down last month. Mic had seemingly gone all in on building an audience via Facebook Video, hoping for some kind of ad model to kick in. Was it next?
Consider that as recently as two years ago, Mic tried a creative way to make money from its Facebook videos and got smacked down by Facebook. It has moved on from waiting for a Facebook windfall.
"We never made a lot of money on Facebook editorial," Altchek said. Nor did Mic make much money from display advertising. "We don't want to run a programmatic business. Even if Facebook mid-roll video ads kicked in at a huge rate, the [ad rates] are never going to be big enough to support this kind of journalism."
Pivot to quality
Mic feels as if it's found the type of journalism that works. If the company once aspired to be a newfangled CNN, now it has a new role model: "60 Minutes" for the social-video generation.
Altchek said Mic had found a sweet spot by shooting videos focused on social justice, diversity, women's issues, and other progressive causes. It cranks out roughly 2 1/2 hours of video a month. "We produce much less content that we used to," he said. "But it's much higher-quality journalism."
Mic's publisher, Cory Haik, says the company spent the past few years moving away from text, particularly articles designed to do well in search, as well as empty-calorie Facebook videos designed to rack up quick views.
She called those videos "space junk" that was designed for a "race to scale" that many in digital publishing were running.
"When I arrived, Mic had had tremendous success in reaching a big audience," she said. "But we needed to put some definition on our content and get more systemized and professionalized.
"Quite frankly," she continued, that meant "changing some of the staffing to get to what I'd call journalism excellence and subject-matter expertise."
For example, Haik and Altchek pointed to a video Mic produced recently about a Nebraska man looking to give up his AR-15 assault-style rifle following the recent Florida shooting as an example of what the company aspires to.
These types of clips are "performing well beyond Facebook now," Altchek said. "Not many people go viral on Twitter these days. We do it once a week. The other platforms are very, very eager to promote our type of journalism."
Selling the Mic journalistic playbook to marketers
OK, but do advertisers want to go anywhere near videos on topics like school shootings? Altchek said Mic was not trying to get advertisers to run ads right next to gun videos.
Instead, the company has leaned into what it calls its Brand Newsroom. The idea is to produce video content for advertisers like GE and Walmart that evokes Mic's newsy, progressive ethos and then use Mic's distribution expertise to get the content in front of people.
So think of it as an ad agency mixed with a branded-content studio with a publishing strategy and an editorial calendar. There are teams at Mic dedicated to working with these advertisers, and sometimes people from the brands are embedded at Mic's offices and vice versa.
"The branded-content model a lot of others use is highly inefficient for brands," Altchek said. "It takes a long time; it's hard to get reach.
"What we realized is," he continued, "we are so damn good at telling stories that people trust and getting lots of people to watch them on social-media platforms" that the company can help brands do it too.
For GE, Mic produces videos three times a week and pushes them out on Twitter, Facebook, and LinkedIn. Mic has produced more than 130 videos for GE, which also distributes the content on its social channels. These branded clips can generate hundreds of thousands of views.
Here's an example of brand-studio work for Walmart.
"I like some of their new strategies, from a brand-partnership perspective," said Ryan Johnson, a senior vice president and group director of branded content at the ad agency RPA. "Largely because Mic has become diversified, going beyond just Facebook videos, and it feels like the programming has evolved to include more substance than just creating clickbait headlines. Although some of that still exists."
Johnson thinks the brand-newsroom offering makes sense, given the difficultly many marketers have reaching Mic's millennial target through conventional ads. "They are trying to help change perception with younger, skeptical audiences through storytelling," he said.
"That's one of the main revenue streams for us," Altchek said.
As much as Mic seems to have found a sweet spot with these brand-newsroom deals, there's always the question of scale. How many can a company like Mic execute each year? What happens if one key sponsor bails? Mic will have to prove it can diversify enough to protect itself from fickle partners.
There's also the investor point of view. Mic's investors include WPP, Time Warner Investments, Advancit Capital, Lightspeed Ventures, and Business Insider's owner, Axel Springer.
Venture capitalists put money into many digital media companies hoping to get in early on a few-in-a-generation media brand. Right now, Mic is one of many trying for that.
For the company to get to that level, it will have to both scale revenue and expand globally. In the meantime, it's not out the question that Mic could attract interest from a traditional media giant looking for a digital outlet.
Besides advertising, Altchek said Mic had another budding revenue outlet: It's close, he said, to reaching licensing deals with big streaming platforms (he won't say who, but it's easy to guess the usual suspects: Netflix, Hulu, Amazon). "Two years ago, we couldn't go there," he said. "Now we're building a culture of real journalism."
And what about the naysayers? "There's people in the media industry who say a lot of bulls---," Altchek said.
"They're not focused on the same things we're focused on."