It’s not easy for any digital publisher to make money in the age of the very powerful platforms that dictate the terms of the content business. Despite the challenges, Group Nine CEO Ben Lerer is sanguine about the future of the digital media ecosystem.
In the latest episode of Variety‘s “Strictly Business” podcast, Lerer acknowledges the current state of play with Facebook in particular is not ideal but there’s progress worth noting.
“Do we feel like we’re being fairly compensated for the value we’re creating on Facebook today? No,” he tells Variety co-editor-in-chief Andrew Wallenstein. “Do we feel we’re being better compensated than we were a year ago? Yes.”
Lerer called on Facebook to move faster toward sharing revenue from its News Feed, as opposed to just from other ancillary components of the platform like the Watch video hub. But while he thinks Facebook could do more to grease the wheels of monetization, he’s also critical of unrealistic expectations some in the industry have about the platform paying content companies.
“I don’t think there we’re going to get to the place where Rupert Murdoch and a lot of people would like us to get to, which is where we are just going to get an affiliate fee,” he observed. “But I do believe there will be some version of an affiliate fee that will be paid out in a meritocracy where the brands that create the best content and best engagement will be able to share in the wealth Facebook creates.”
Lerer believes he’s well positioned to participate in that wealth given how aggressive he’s been with programming for Facebook with Group Nine, a holding company launched last year with backing from Discovery Inc. that includes Thrillist, Seeker, the Dodo and NowThis.
He’s betting the economics of digital media will evolve to the point where brands will eventually build businesses that rival those of TV channels.
“The smart big media companies can see a world where that happens, and if they’re not set up for it and they’re not making investments, partnerships and acquisitions with the best digital publishers, it’s going to be really, really unpleasant for them because then they will have let the massive advantage they have slip away,” Lerer noted. “[Discovery CEO David] Zaslav is not waiting for the other shoe to drop. He’s seeing where the future is going. We’re really lucky to be in business with him.”
“Strictly Business” is Variety‘s weekly podcast featuring conversations with industry leaders about the business of entertainment. Listen to the podcast below for the full interview, or check out previous “Strictly Business” episodes featuring comedian/actor/producer Kevin Hart, ICM Partners agent Esther Newberg, and HBO chairman/CEO Richard Plepler. A new episode debuts each Tuesday and can be downloaded on iTunes, Google Play, Stitcher, and SoundCloud.