Welcome to another episode of the Variety podcast Strictly Business, where we talk to some of the brightest minds working in the media business today. I'm Andrew Wallenstein, co editor in chief of Variety. There's no shortage of digital content companies these days trying to carve out audiences for themselves, but few have innovated the sector's business models as much as Kin Community and it's co founder and CEO, Michael Wayne,
my next guest. The talent he works with, for one thing, isn't just the usual digital native stars, and the revenue isn't just cuts of advertising and subscription dollars. Michael, thanks for coming in. Let's let's walk through some of the different things that you're doing. And but first just explain what Kin is, the brand, the demographic you got it. Thanks for having me, Andy, pleasure to be here. Kin is a lifestyle entertainment company, simply put, So what does
that mean exactly? What we do A number of things. Uh, we have a studio that produces content. We have, like you mentioned, a network of digitally native influencers. We have owned and operated channels. Uh. That exists across YouTube, Facebook, Instagram, Amazon, Prime, Twitter, pretty much every social platform. The newest part of our business, which we launched about a year ago, is working with more traditional TV talent like a timor Um who who
do we know Tia from? Yeah. Timre Is is a good example of the type of talent we're working with. She had a show in the late nineties called Sister Sister. It was a big show, was on ABC, she and her twin sister, tamoraw uh. And then since then she has had a really broad career in entertainment. She was on a show on E with her sister. She had multiple shows on the network. She's had a cookbook. She's done a lot of different things, but but a lot
of which is in the women's lifestyle space. Uh. And she was pitched to us a couple of years ago by U t A. And at that point in our company's history, we hadn't really worked with traditional TV talent. We were focused early on on working with bloggers and then YouTubers and instagrammers. But there was something interesting about her one the fact that she was more or less a household name. She had been in the public consciousness for twenty years. She had twelve million social followers um
and she was very passionate about women's lifestyle. So we kind of scratched her head and said, you know, maybe we've gotten to the point in time where the distance between a digitally native social influencer and a TV personality who has large social following, but also connects directly with an audience, UH, isn't very far apart. Maybe maybe these kind of ships are starting to pass in the night. So we said, what if we started a new own and operated channel where she was the focus of it.
And we created a brand called Timris Quick Fix, and we launched it simultaneously on YouTube and Facebook and Instagram and Amazon Prime. And that was almost a year ago and it's been extremely successful. So she's the model for what you're she is. We we still have a studio business that produces channels like Tmris Quick Fix, as well
as working with brands to do brand content. We still have a great network of digitally native influencers, but we are now building the Kin network, which we've called recently a neighborhood, which we can talk about why we're calling it a neighborhood, but um of really like minded talent. So we have since launched now five channels in this model. The tmri E quick fix model, and we plan on launching We'll have seven by the end of the year
and hopefully next year. By the end of two thousand nineteen, about twenty of these channels driven by traditional TV talent. So what was wrong with the model that was more based on the traditional influencer You've got eyes were pretty active on that front for quite a while. We are that that space has changed pretty dramatically since we got involved in it. Um described that change. Yeah, I think
I think it goes back even before the YouTubers. So when we started our company was in what year which was two thousand seven, which is like the nineteenth century for incial media. But we started the company in two thousand and seven, and we always had the idea of building brands I P video brands if you will. Back then, uh talent. We we had this belief that we wanted to work with digitally native talent. But in two thousand seven,
that meant bloggers. Because there's really really at the very beginning of YouTube in general, so the whole social influencer thing hadn't really started from a video standpoint, but bloggers, Uh, we're kind of the social influencer of of that time. So we were doing video series working with bloggers, and we learned a lot back then. One that blogging is very different than video. Two. At the time, there weren't
a lot of video platforms. In fact, that that time, YouTube was just doing user generated content, so we didn't even really think of it as a as as a video platform like we do today. Um we created websites so that people could come watch these video series in two thousand eight, and that's really hard to get people to a website to watch video, let alone just get them to a website. Period. Brands weren't quite ready to
do all that. But but what we did learn back then was that when you have open platforms that you can very quickly commoditize talent. So we were working with the best bloggers at the time, the best mom bloggers, the best food bloggers, but we were What we were seeing is that large blog networks were forming and pretty much anyone who throw up a blog was part of
a blog network. And that created a lot of problems because all of a sudden, the ad dollars had to be spread around not hundreds of bloggers, but thousands, tens of that millions of bloggers. It was hard to navigate what are the good bloggers, what are the bad bloggers. It just got very crowded very quickly, and very commoditized, and we were like, oh, we don't we don't want
to do that. That's not interesting for us. So when YouTube started really getting behind their their stars, their creators, we kind of realized and actually make our studio and folks like that started aggregating tens of thousands of channels
we got. We we had some pause there because we had seen what it looked like in the blog space, and so we said, hey, if we're going to curate a network, let's make sure it's the biggest and the best uh channels in our categories, which were food and home and d I y and style and beauty and things like that. So we only focused on about a hundred YouTubers at the time, and for a few years we were the place where brands would come to work
with those influencers. But as you know, in fact I wrote an op ed pe or an opinion piece for Variety many years ago about the problems with with the space. It got also very crowded very quickly. Lots of um other you know, the market was flooded with YouTubers, agents, managers, MCNs, social influencer networks that could go on and on. All started to figure out that there was a growing business here and they wanted to get in the middle of it.
So we we realized probably a few years ago that this was going to get pretty crowded pretty quickly, and realized that UM also at the end of the day, we didn't We don't own our influencers channels. They own it, So we are in a sense, Uh, it's almost like a manager or an agent to them. And that's really never why we got in the business in the first place. We wanted to be a content business that owns I P and that builds video brands, and so it's still a part of our business, but uh, it's not uh
the growing and most valuable part of our business. I would say it is. It is, Uh, it is one of many parts of our business. So you're working with a higher level of talent. What kind of deals can you offer them, because I would assume they've got options. It's a it's a great question. So I think the interesting part of our model right now is that while digital influencers were building their brands, UM everyone started building
their social as well. That you me variety uh a TV talent, And over the last five years, you've seen a lot of TV talent build social followings as big as a YouTuber and Instagram who started as digital native, right. But there's a little bit different to someone who's built the last twenty years or ten years of their career being a TV star. One. They probably aren't likely to want to pick up their iPhone and start shooting videos
every week and putting it on YouTube. That's probably not likely, uh, what they're gonna want to do. Um. They might not want to hire a whole production team also to come out every week and spend the money on doing a show. Um. They want it probably to look really good. They've been on TV their whole career, they've gotten to a level of success. They probably want content that's going to look as good, if not better than what they've been doing
on TV. They also probably don't want to build a whole data and strategy team and become experts on how these platforms work day in and day out. So as we've talked to UH some of the more traditional talent, what we find is there they've been successful on television. They've built large social followings, but then taking the next step into video isn't so easy. They're not just going to start from scratch like a YouTuber might have UM who made YouTube kind of their primary career, if you will.
So we come in and we say listen, we want to work with you care natively. But we have all the infrastructure. We have all the camera equipment, we have all the producers, we have all the editing facilities. We have a strategy and data team that's really really smart about how you should think about your you know, a content brand with us UM. But ultimately we're not there to create the only digital video opportunity for these stars.
We believe we want to create a show with them, a series with them, not unlike they might go to a TV or a cable not a TV company to cable company and create a show on cable. So we really focus on just what swim Lane we think would
be fun and profitable to build out with them. So with Tia, it was quick Fix, it was d I Y, it was how can she help young women who may or may not have young children get through the day with easy quick tips that X we have a show with Adrian Balion called All Things All Things Adrian, which is really focused on style and beauty. Um you know, we just launched a show with Jordan's sparks. Jordan's Sparks
one American idol ten years ago. She has a passion for baking, so we have a show called Heart of the Batter with Jordan's Spigs and jordan Sparks. So so that's that is a swim lane. Will Jordan do other things? Absolutely? I think last night she had a show on Lifetime that launched um or or a one hour series, one hour documentary on Lifetime. She has her albums that she's
gonna She'll have plenty of other things to do. But in this one swim lane, we want to be a partner and we really want to build an asset that's valuable that can you know, thrive over the hopefully years and years come. And so how do doing deals with these types of people? How do you make that economical? Because I would imagine cost control is the name of the game here. It is, and that's that's what's exciting,
you know, you o this. I've been involved in digital and in particular digital video really from the beginning in launch media in the late nineties, and so I was there when the first bits of video started streaming over the Internet, and I've always been fascinated with how it's evolved of the last twenty plus years, and I'm I'm very excited about it now, more than I ever have because of a number of reasons. One is, I think there are more video platform scaled video platforms now than
there ever have been. So you have you've had YouTube really was the only game in town for a long time. Now, Facebook, then Instagram, obviously Amazon Prime is there and some of the other platforms, but there there are multiple places now when you create a piece of content you can monetize it. And I don't just mean like doing brand integrations, but just just running pre rolls and mid rolls. Now you
can do that across multiple platforms. Our company has always been focused on high quality, premium, premium content, and the platforms now are focused more and more on building clean, well lit neighborhoods. It's one of the reasons we've called what we're building a neighborhood. And so what we're seeing is as we put our videos across all these platforms, they're getting higher and higher CPMs again, this is just
low touch programmatic. And so what we're finding is is that we can actually cover most of our production costs, in some cases all of our production costs with just distributing our content across those platforms. Now, we're still doing brand integrations, and we're doing e commerce, and we're going to do licensing of our of our content. All of
that's going to come into play. But I think for the first time, you're now able to on a unit economic basis, we have a show with a particular production cost, in a particular you know, set of economics, we can pay that off now across platforms with low touch, as opposed to hiring dozens of salespeople to hopefully sell branded integrations to pay off this content. Well, that's really saying something where we are because a year or so ago, the notion that there was more than one game in
town YouTube would really be a stretch. So sort of review the rest of the pack there. How do you like the evolution of let's call it the monetization opportunities on Facebook, Snapchat, Instagram all that. So our audience, uh, and I didn't bring this up before, but is really women and there they tend to be women from about twenty five to forty four. That's the core, and we even within women four it's really to thirty four is
the core core of our audience. We call them builders, that's our our name for them because they're entering in their mid twenties a different stage of life where they're focusing on their home, their physical home. Uh, they're focusing on their career. It's no longer just a job. There actually think about their career. They're focusing on their family, which could be a significant other. It could be uh, you know, a husband or a wife at that point,
it could be young children. So they're building really their lives and that Uh. If you think about our content historically, even going back to two thousand seven and two thousand and eight, we've always focused on that demo and um in our content is both entertaining but also helpful and informational and in some ways educational to those women going through those uh, those ages and stages. It's not surprising platforms like Facebook and Instagram lend themselves very very well
to our demographic. In fact, I think ten years ago, um or even five years ago on Facebook. Uh when well, actually, let's see when it was it In two thousand eleven, YouTube as part of their first original funding program when they funded their their first channels. They actually partnered with us to start kin as a brand, and they wanted to create a women's lifestyle brand on YouTube. But even
in two thousand eleven, it was a little early. Like YouTube as a platform or I'm still skews fairly, fairly young. I would say there's a much higher concentration on Facebook and Instagram of our audience than there is on YouTube, or at least primarily on YouTube. Right. I think they're you know, there's two billion people on YouTube, so they cover everyone. But but really the heart of their audience
tends to be pretty young, under eighteen. So when we launched Ken in two thousand eleven, it was slow growing as a as a channel, um, And it wasn't really un till Facebook a couple of years ago where we started to really focus on Facebook, that we started to see our audience scale. To answer your question specifically, though YouTube has been in the game of selling mid roles and pre roles and working with content creators with brand
integrations for years. Facebook, Um, it's fairly new. It's really Facebook Watch is a year old. Uh, you know, selling pre rolls and mid selling mid roles is probably about that long. I you don't want to speak for Facebook. I don't know exactly how long, but it's fairly recently selling pre roles even more recently. So we're very bullish on Facebook, and we're excited Instagram now is launched Instagram TV,
and hopefully we'll monetize. But um, I think what we're seeing is growth on Facebook and Instagram, a faster growth, and even from a monetization, faster growth. But but YouTube is a mature platform and the way you monetize it is mature. So uh, my instinct is is that Facebook and Instagram will probably outpace uh YouTube as a monetization
platform for us over the coming months and years. What about Amazon, because you're you distribute there, and my god, I guess there's just so much buzz about even what they're doing from an ad perspective. Now, that's right, I mean, we're It's funny, we've been for the last couple of weeks. We've been talking about their new platform that's going to be AD supported and making sure that we're from and center on it. We we've worked with Amazon for years
and in multiple capacities. We've we've produced programming with them, UM and different types of programming with them. We were part of a program, still are part of a program where they've selected UM a handful of digital companies that they thought had really high quality digital content to be part of Prime. So you can actually find our content on Amazon Prime behind a paywall, so if you're a
Prime subscriber, you can get it. And we're able to post our content onto pot Prime on a regular basis. Now that's not ad supported, so that I just want to be clear, that's different than that their new product, or at least what we've read in the papers, their new ad supported product that's coming out that when we post our content to Prime, we get paid like any content provider to Prime, we get a piece of the subscription revenue. Obviously, most people go to Prime to watch
movies and TV. So I would say the digital partners of Prime are probably a little lower down the totem pole, but we still we still partner with them on that and and uh, we think Amazon is a great platform
for us for a lot of reasons. We also have a relationship with them where a lot of our content has have stores so today you can go to UH to some of our new channels and on videos click through to buy some of the merchandise, all things Adrian I mentioned with Adrian Bellion it's a style and beauty channel and UH you can click through and buy the makeup that might be in her video or by the swimsuit she might be showing off this this past summer. And so that's a really cool part of our relationship
with Amazon as well. So it's it's both the e commerce side and the content side that it's interesting to hear you even talk about that as a viable revenue stream. It's typically companies like yours, it's all about advertising, maybe something in subscription. So how meaningful is this? I think
they're all meaningful. I think, getting back to my original point about where we are and kind of the video landscape, I think there's been for the last few years this um this feeling like you need to have a very large ad sales team to sell big and its sponsorships
or big brand brand content to get these video series made. Um, I mean they're you know, the running joke at the New Front was you get presented with a lot of content, but like you never know what was gonna get made or what wasn't going to get made because brands had to come in and subsidize that. And I think now what is really exciting is there is this sustainable, repeatable and profitable model where low touch revenue can support high
quality video. And so we talked about programmatic being one form of that. I think e commerce is is the other low touch way of doing that, and we're doing that with Amazon across our channels. Uh it's meaningful. It's not as meaningful, I'll be honest, it's not as meaningful yet as advertising, whether that's um pre role mid role
branded integration, but it's becoming more meaningful. I think where it gets really exciting for us is not just where we're linking to an Amazon or linking to another e commerce platform, but where we're creating our own products around our channels. So I think that to me is is where UM we get into licensing our brands, creating bespoke products around Uh some of the brands were building with our talent. I think that that we haven't gotten there yet.
So there's no no, no imminent announcement there, but I think that's going into two thousand nineteen going to be a real focus for us. What else in is you look Ahead is sort of top of mind for you in the business. Yeah, well, I think for us, we're really excited about UM how our audience is engaging with our content and just consuming our content. So we've partnered
with Nielsen UM to rate our content. Thank you and I have talked about this before, uh, and we have found that on a regular basis, our shows, whether it's TM or Quick Fix or other shows, are getting cable size audiences on a weekly basis. In fact, he is Tia Moore's Quick Fix has multiple times been quite literally the number one cable show, even though it's not on cable, it's across digital platforms in women eighteen to thirty four
or in total viewership. So what we're excited about is now that we have five of these channels, going to seven by the end of the year, going to twenty by the end of next year. We truly believe we're going to be able to compete on a cable network basis. We we really think of ourselves as a next generation cable network. We're building a next generation cable network brand with KIM and we will have audiences in the US and without a question, internationally bigger than cable audiences today
on television. So to me, that's that's really the exciting thing going into next year, the promise of building the brand of Kim now. But when you are comparing to cable audiences, you are making a truly apple to apple comparison. Because a lot of people have died on these shows, they have tried to make these comparis so and I'm
you know, I look forward to refining this. So Nielsen cannot Today they have something called dc ARE and Digital Content ratings and they have TV ratings, And what we have done is tried as close as we can to compare the two. Some people have just said, oh, the digital content ratings and the TV ratings, you can compare apples to apples. We we've actually tried to go much
deeper than that. We've said, if we're going to get close to apples to apples, then let's do not just Live, let's do Live plus seven, and not only Live plus seven, but let's aggregate all the airings of the shows during that week. So you know, you might go to a cable network and they might have a show that they
air twenty times in a week. So we're saying, okay, if you do Live plus seven plus an aggregation of all the airings during that week of a show, and then compare it to our show, it's still not exactly apples to apples, but it's about as close to apples
as apples as you're gonna get. And so we can say in a week Timore's Quick Fix at eight point eight million total US viewers watch her show in a week, and then compare it to what I just described Live plus seven plus an aggregation of all the viewership of all of the airings of that show on that network.
We feel very confident that that's pretty that's that's close, and and that not only is it close, but our viewership is so much bigger than most of these shows that it's it's I think, very compelling to audience, is very compelling to brands, very compelling to partners that we're working with. So you guys have been out there, going back to your days when you were known as Decca for over a decade, and you've been an independent all the while picking up rounds of funding here and there.
The name of the game, though in the sector more and more people are talking about though, is consolidation, that everything is going to have to come together to get scale. So where's your attitude there? Are you looking for where the exits or where is your head at right now? Uh? Well, I think my head is the same place it was eleven years ago, which is I am focused and even before eleven years ago, because we've talked about it, I've
been in the space for over twenty years. I've always been interested in how do you create value in the space and something sustainable. So you know, some some entrepreneurs maybe look for opportunities that exploit it and then let someone else worry about the value. I've always looked at what we are doing as a continuum. It's an evolution. People sometimes go, oh, you've pivoted from this to that. To me, I've always looked at everything we've done is
just an evolution of the space. Now, clearly we live in a time where fang you know, Facebook, at Apple, Netflix, Google or Facebook? Is it? What is it is? It's Facebook, But there's Amazon has got to be in there too. I think there you go, it's a Facebook, Apple, Amazon, Netflix, Uh, clearly the world I mean their their global platforms their technology companies fundamentally UM, and they've truly disrupted everything. Right.
We're a small company, but we're very very attuned to how these platforms work, and we have expertise and really super bright people internally who understand the ins and outs of how these platforms work. And so for us, we think that's super valuable. Being able to create a repeatable, uh scalable, profitable model around high quality content with really
really talented people we think is very very valuable. So I guess, long story short, my feeling is that we continue to create value in the space, especially in a space where platforms need higher quality content, they need brand save content, they need content partners who understand their platforms. Brands are looking for this in the marketplace. We're going
to continue to grow. If we were to find partners or a partner who really believes in the long term vision of Kin as a brand and as a value proposition in the marketplace, I think we would always be open to entertaining how do we partner to get there quicker? How do we partner to get there more efficiently or effectively or more powerfully? Um And along the way we
have partner we haven't been acquired. We haven't really talked to anyone about being inquired, but we have partnered with people who have invested in our company or who have been strategic partners who have helped us accelerate our business. So I guess at the end of the day, I don't really look at it as we're looking to go get acquired. I think we're out in the marketplace creating value. We're building a great brand. We have a great mission as a company. We have an awesome team who are
building this brand. Is someone want to help us with that great like we're we're open to We're open to talk to them and see if there's a fit. We will see what brands we'll see. Thanks for coming in, Mike, Thank you, Andrew. I appreciate it. This has been another episode of Strictly Business. Tune in next week for another helping, accintillating conversation with media movers and shakers, and please make sure you subscribe to the podcast to hear future episodes.
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