My First Million

Reed Duchscher: Inside Feastables, Night Media and Niche Creator Businesses

Tue Jul 18 2023

Night MediaCreatorsKickFeastablesYouTubeTwitter

Description

The episode features a guest from Night Media discussing their agency and how creators are building multi-million dollar businesses. The hosts also talk about Night Media's expansion, Kick's strategy, Feastables' growth, niche channels on YouTube, Twitter's engagement, and Night Media's future plans.

Insights

Creators building businesses

The episode highlights examples of creators starting businesses, such as Feustible, Prime, Happy Dad, Cars and Bids, Rare Candy, and Emma Chamberlin Coffee.

Kick's strategy

Kick aims to compete with Twitch by signing popular streamers and offering better revenue sharing. Its success remains uncertain.

Night Media's expansion

Night Media started as a talent management company and expanded into other ventures, including festivals. They focus on building businesses with creators and taking equity.

Niche channels on YouTube

Niche channels like farming and vending machine content are gaining popularity and attracting large views. Revamping existing channels can lead to success.

Twitter's engagement

Twitter has high fan loyalty and authentic product endorsements can lead to increased sales. Threads feature has seen a decline in usage.

Night Media's future plans

Night Media enjoys running the company and has no interest in selling it. They plan to expand through partnerships and investments in businesses.

Summary

Transcript

Zero Cloud podcast

00:00 - 06:40

Reid from Night Media is a guest on the podcast.
They will talk about his agency and how creators are building multi-million dollar businesses.
Producer Ben's last day producing an episode.
He wants to focus on making the podcast as big as possible.
He learned to say no to opportunities that may distract him from his main goal.

Night Media and Talent Management

06:15 - 12:39

Night Media is a creator holding company with various divisions including a studio, venture studio, venture capital fund, and growth vehicle.
Talent management businesses generate a lot of cash but struggle to build something bigger.
Night Media started as a talent management company and expanded into other verticals.
They have made shows for YouTube Originals and are developing new projects for streaming services.
The agency business can be challenging due to exclusivity agreements with talent.

Building Businesses with Creators

12:16 - 19:02

Knight management company was the access point to other ventures.
Digital creators were easier to represent than actors or musicians dominated by Hollywood.
Management business is a means to an end for building other businesses.
Maverick Carter and Scooter Braun are examples of successful businesses built off management companies.
In the digital space, there are no royalties or backend deals like in Hollywood.
Night Media focuses on business building through their packaging business called Night Labs.
They believe that building businesses with creators and taking equity is more interesting long-term than just stacking a management business.
Night Media has over 60 staff members, with talent managers being the majority.
The CEO of Night Media used to manage someone but now dedicates his time to running the company.
His focus is currently on festivals.

Night Media's Expansion and Kick

18:37 - 24:55

Night Media is focused on managing a creator and growing their own business.
The festivals business is becoming a big opportunity for Night Media.
The founder of Night Media originally wanted to be a sports agent.
Kick is a twitch alternative started by a gambling company called Stake.
Twitch banned gambling, which led to the creation of Kick.
Kick offers streamers contracts worth millions of dollars.
The success of Kick and its strategy remains uncertain.

Kick's Strategy and Growth

24:28 - 30:58

Kick has signed deals with popular streamers, offering them millions of dollars to stream on their platform.
The strategy is aimed at competing with Twitch and attracting more users to Kick.
Kick.com has experienced rapid growth in traffic within a short period of time.
The initial boost in traffic came from two popular streamers who were banned from gambling on Twitch and started streaming on Kick instead.
Kick offers a better revenue sharing model for streamers compared to Twitch, which sparked outrage when they reduced the ad revenue split.
Kick's financing comes from its profitable casino business, Stake, which had an $800 million dividend last year.
The main competitive advantage of Kick is its ability to funnel users to gamble on Stake's casino platform.
The $100 million deal with XQC includes both cash and equity, with the equity part potentially going to zero.
XQC's non-exclusive streaming arrangement allows him to continue streaming on Twitch while driving traffic to Kick during specific games or events.
This strategy of funneling traffic from one platform to another has been successful in the past, as seen with a similar case at Twitch in Brazil.
It is unclear if Kick will face any issues in the future due to its young founders or if they will focus more on expanding their casino business.

Night Media's Ventures and Prime

30:32 - 37:12

Stake.com was a competitor to Rubat, but Stake won by signing big creators like Train and Drake.
The challenge is finding executives to run the companies and build them into real companies.
Deals with CEOs are structured with cash payments and equity over a four-year vesting schedule.
Many CEOs are excited about the opportunity due to the unfair advantage of having a massive platform.
Funding for businesses ranges from $250k to $1 million depending on the business.
The issue with festivals and some consumer products is funding the purchase orders from retailers.
Prime is a hydration drink started by Logan Paul and KSI, marketed heavily but not involved operationally.
Prime has grown significantly, generating $45 million in revenue in January.

Feastables and Chocolate Market

36:43 - 43:22

The energy drink company has grown significantly, with $45 million in revenue in January of this year.
Logan Paul's manager, Jeff, has been with him for a long time and put together the successful deal.
The founders of the drink company were not well-known before partnering with Logan Paul.
Logan and KSI had a real beef before partnering on the hydration drink.
Prime's success in Australia and the UK has helped Feastables expand into those markets.
Feastables initially chose chocolate bars as their category due to its massive business and seasonal demand.
They plan to expand into cookies next but are primarily focused on building out seasonality in chocolate.

Building a Chocolate Business

42:53 - 49:22

The focus is on building out seasonality and chocolate, with cookies being a secondary category.
Perchies dominates the chocolate market, especially with their ownership of Reese's.
The competition in the chocolate market is not as oversaturated as other industries, making it easier to identify competitors and innovate.
Understanding the global chocolate supply chain has been challenging but necessary for success.
There is a roadmap of products planned for the next two to three years, with a focus on expanding space in retail stores.
The potential for profit may not be high due to thin margins, but there is an opportunity for a lucrative acquisition in the future.
Halloween and other seasonal events are important for driving sales and promotions.
The business has significant growth opportunities globally, particularly in markets like Asia and the Middle East.
Localization efforts include dubbing videos in multiple languages and providing specific points of distribution for different regions.
The business is still in its early stages, so acquisition discussions have not yet taken place.

Creators Starting Businesses

48:53 - 55:13

The speaker appreciates the innocence and naivety of a colleague's mindset in approaching their work.
The speaker acknowledges that they are more realistic and aware of the challenges involved in building and selling products.
When entering the chocolate industry, the speaker and their colleague had limited understanding but were able to make quick decisions and adapt.
Having ownership in a brand creates a higher level of excitement and motivation for creators compared to cash exchanges for promotion.
Examples of creators starting businesses include Feustible, Prime, Happy Dad, Cars and Bids, Rare Candy, and Emma Chamberlin Coffee.
Smaller creators are also starting businesses based on niche interests like window washing.

Niche Channels and Emerging Creators

54:53 - 1:01:34

TikTok creators are building niche businesses like pressure washing, lawn mowing, and vending machines.
Darman is the largest scripted YouTube channel with 18.5 million subscribers.
Darman's success comes from figuring out how to create scripted content quickly and cost-efficiently.
Ryan Hall y'all is a weather-based channel gaining traction by providing information on weather patterns and natural disasters.
Little niche channels that attract a large number of views are emerging on YouTube.

Growth of Niche Channels

1:01:14 - 1:07:20

Niche channels on YouTube are gaining popularity and attracting a large number of views.
Examples of niche channels include farming and vending machine content.
Different farming channels cater to various demographics, such as millennial farmers and female farmers.
The internet offers space for all types of content, making it difficult for creators to break through.
Creators on platforms like TikTok and YouTube Shorts continue to find ways to gain attention and monetize their channels.
Ryan Hall's weather channel has gained millions of views per video, surprising many people.
There is potential in revamping existing channels by taking a new spin on the content, as seen with the Weather Channel's success under new ownership.
Building a new weather channel would be complex but could be supported by Ryan Hall's distribution capabilities.
Twitter has high fan loyalty compared to other social platforms like TikTok or Instagram.
Engaged Twitter followers are more valuable than casual viewers on other platforms.
YouTube appeals more to younger audiences, while Twitter attracts an older demographic with deeper engagement.

Twitter and Content Platforms

1:06:54 - 1:13:05

Twitter is more suited for an 8 year old to watch content, while Instagram and TikTok are more casual platforms.
Twitter has a depth of consumer loyalty, with people willing to buy products from creators they follow.
Recognition of Twitter creators is higher compared to TikTok creators.
Word-of-mouth recommendations on Twitter have a stronger impact than those on TikTok.
Authentic product endorsements on Twitter can lead to increased sales.
Threads, a feature on Twitter, has seen a decline in usage and daily active users.
The decline in Threads' usage was expected and does not indicate failure.
It will take time to determine if Threads will gain traction among users.
Most talent and influencers are not likely to fully embrace Threads as a platform.
Focus should be put into creating high-quality content rather than investing time in Threads.

Night Media's Growth and Future Plans

1:12:39 - 1:19:21

The hosts discuss being referred to as 'Zuck's cocks' and the implications of that term.
They joke about who would win in a fight between Mark Zuckerberg and Elon Musk.
The hosts express their enjoyment of running Night Media and their lack of interest in selling it.
They mention receiving offers to buy Night Media for hundreds of millions of dollars, but they are not interested in selling.
The hosts talk about the potential for partnerships and expansion within Night Media.
They discuss their plans for Night Capital, including investing in businesses and expanding them with creators or celebrities.
The hosts mention their cautious approach to making deals due to economic uncertainty.
They reflect on the success of their podcast on platforms like iTunes and Spotify compared to YouTube.
One host expresses a preference for consuming podcasts on Spotify, while another enjoys YouTube for its comments section.
Reed JD shares his Twitter and Instagram handles for people to follow him.