Annotations (12)
“Hot Ones sells advertising like TV. TV sells adjacency. When brands buy advertising, they want content that aligns with who they're going after. Even premium content with wrong negative connotations can harm a brand. Hot Ones buys their inventory from YouTube and resells it to brands: we're having these actors on this week, here's your reach, here's who you're next to. That's been really profitable.”— Blake Saunders
Business & Entrepreneurship · Operations & Execution · Strategy & Decision Making
DUR_ENDURING
Arbitrage: buy YouTube inventory, add adjacency, resell
“Society is very fragile. We had to shut down during COVID not because half the population had COVID, but because a couple percentage points and we had to stop the spread. AI doesn't need to impact that many jobs. If it impacts a couple, it will radically change how we deliver value to people that aren't working. If we take out drivers in the US, semi-truck and Uber drivers, that's a big hit to the income base.”— Blake Saunders
Biology, Ecology & Systems · Economics & Markets · Culture & Society
DUR_ENDURING
Small disruptions collapse fragile systems
“In the US, a fully distributed cable network used to have 110 million households 7 or 8 years ago. Today it's 55 million. Each household pays a fee to Comcast or distributors, and part of that fee makes its way to ESPN or whatever cable network. If you halve that, you've effectively halved your revenue. These businesses are changing rapidly and most of the value is accruing in the hands of a few: Google, Facebook, Amazon.”— Blake Saunders
Economics & Markets · Strategy & Decision Making
DUR_CONTEXTUAL
Cable halving: direct revenue impact via distribution
“Most media companies have been trained to be slow movers. When platforms started getting bigger, they offered unique things. Facebook turned on Facebook video, did partnerships with media companies: build video teams, create video for Facebook, we'll help with monetization. The monetization never happened and Facebook shut it down after a year. Media companies let everyone else suffer and clean up the mess. That's why they're slow to adapt to change now.”— Blake Saunders
Strategy & Decision Making · Psychology & Behavior
DUR_ENDURING
Platform betrayal creates institutional caution
“The biggest change in media is the internet. Even though it made distribution free, people's perception of what they were building changed from building stable, generational businesses to build it quickly and then sell it. Newspapers were owned by families for multiple generations and were really stable businesses.”— Blake Saunders
Strategy & Decision Making · Business & Entrepreneurship · History & Geopolitics
DUR_ENDURING
Free distribution killed patient capital thinking
“The best sell-side process is getting an asset you can market, have someone young send it out to 30 people, get 5 or 10 or 15 bids back, then take to second stage and pick the winner. But that's changed. To sell media companies now, it's much more hands-on, much more custom processes. There's not 20 buyers for these businesses, there's 3 to 5, and you have to communicate in a direct way what the value is.”— Blake Saunders
Strategy & Decision Making · Business & Entrepreneurship
DUR_ENDURING
Media M&A: narrow buyer universe demands custom approach
“Facebook, Snapchat, TikTok are orientated to ensure UGC content is the most addictive because they don't have to pay for that. Instagram is like a media company but they don't pay for any content. The platforms have made shitty content highly addictive. That's unfortunate. Premium IP matters. Certain YouTube channels will be less or more valuable because they're creating premium-like content that users are getting real value from.”— Blake Saunders
Economics & Markets · Psychology & Behavior · Strategy & Decision Making
DUR_ENDURING
Platforms optimize for addictive, not valuable
“The only way to coexist with AI in a normal way is to disconnect, not connect more. We underappreciate how significant tax rates will need to increase. It has to come because you're going to have to rebalance how people make a living, which is UBI. You have to be a creator of economic value. That's the only way to exist. You can't be an employee. One or two percentage changes in the economic base of how people are employed has massive impact.”— Blake Saunders
Economics & Markets · Philosophy & Reasoning · Culture & Society
DUR_CONTEXTUAL
AI forces: be creator or face redistribution
“Most publishers are already very thin today because organic traffic is free. They didn't have to pay anything to get it. When you start getting double-digit declines from organic traffic, there's a lot of fixed costs in these businesses that they can't cut as quick. They've already done a lot. The economic model of a publisher below the top 10 or 20 in a category is suffering mightily because they can't adjust fixed costs fast enough.”— Blake Saunders
Economics & Markets · Operations & Execution
DUR_ENDURING
Free traffic plus fixed costs equals fragility
“In most content formats, the first 30 to 60 days is where all the value is, and then it degrades exceptionally quickly. With technology now, there's going to be unique opportunities with libraries of IP: music, TV shows, scripts, books. You can reimagine them in a much quicker way. Good stories and narratives can be reimagined in different ways. Instead of hiring actors, it could be a kid behind a keyboard.”— Blake Saunders
Technology & Engineering · Creativity & Innovation · Business & Entrepreneurship
DUR_CONTEXTUAL
AI turns old IP into cheap new content
“One positive thing with platforms: you don't have to be polished. Kai Cenat and younger streamers, they're whoever they want. Oprah said when she got her break, she had to fit this mold. One of them said their highest rated stream was when a mouse ran into their room and they freaked out. There's an opportunity to show more real life and show people of any age it's okay to not live this perfect world.”— Blake Saunders
Culture & Society · Psychology & Behavior
DUR_ENDURING
Platforms reward authenticity over polish
“Media at a high level is effectively content that's monetized via subscriptions or advertising. Each successive iteration of media gets more addicting, more engaging. At the end of the day, either the media company is making money because someone's paying them directly, or they're helping an advertiser, brand, agency get someone to make a purchase decision and make that purchase.”— Blake Saunders
Business & Entrepreneurship · Economics & Markets
DUR_ENDURING
Media revenue: direct payment or advertiser payment
Frameworks (1)
Media Asset M&A Process Framework
From Broad Auction to Narrow Custom Process
Traditional sell-side M&A relied on broad distribution (30+ potential buyers, standardized materials, competitive auction). Modern media M&A requires identifying 3-5 qualified buyers, crafting custom narratives explaining unique value, and conducting hands-on, bespoke processes. The shift reflects buyer universe contraction and increased asset specificity.
Components
- Identify Narrow Buyer Universe
- Craft Custom Value Narrative
- Execute Hands-On Process
Prerequisites
- Deep buyer universe knowledge
- Senior-level relationships
- Asset-specific strategic understanding
Success Indicators
- Multiple qualified bids received
- Competitive tension despite small buyer pool
- Value realized exceeds generic market multiple
Failure Modes
- Treating niche asset like commodity
- Broadcasting to unqualified buyers
- Insufficient customization per buyer
Mental Models (10)
Two-Sided Market Revenue Model
EconomicsMedia businesses monetize through two distinct paths: direct payment from consumers or payment from advertisers.
In Practice: Definition of media business economics
Demonstrated by Leg-bs-001
Time Horizon Shift
TimeWhen capital shifts from patient (generational ownership) to impatient (build-to
In Practice: Historical change in media ownership models
Demonstrated by Leg-bs-001
Distribution Channel as Pricing Power
EconomicsWhen you control distribution, you can extract value through per-unit fees. When distribution is disrupted, revenue collapses proportionally.
In Practice: Cable industry decline mechanics
Demonstrated by Leg-bs-001
Narrow Buyer Universe Strategy
Strategic ThinkingWhen few buyers exist for an asset, value creation shifts from process design (broad auction) to cus
In Practice: Modern media M&A process changes
Demonstrated by Leg-bs-001
Adjacency Arbitrage
EconomicsBuy commodity inventory at wholesale rates, add curation layer, resell at retail rates.
In Practice: Hot Ones advertising model
Demonstrated by Leg-bs-001
Institutional Learned Helplessness
PsychologyWhen platforms repeatedly lure businesses into investments then abandon them, organizations develop systemic caution.
In Practice: Platform risk and media company behavior
Demonstrated by Leg-bs-001
Fixed Cost Fragility with Variable Revenue
EconomicsBusinesses with high fixed costs and variable revenue sources are fragile to revenue declines.
In Practice: Publisher economic model under pressure
Demonstrated by Leg-bs-001
IP as Raw Material for Reimagination
Strategic ThinkingContent libraries traditionally valued for limited re-runs gain new value when technology enables ch
In Practice: Future value of content libraries
Demonstrated by Leg-bs-001
Marginal Disruption Creates Systemic Failure
Systems ThinkingComplex systems appear robust but are optimized for narrow operating ranges. Sma
In Practice: System fragility and AI labor displacement
Demonstrated by Leg-bs-001
Addictiveness vs. Value Optimization
EconomicsPlatforms optimize for engagement (addictiveness) because they don't pay content costs. This creates incentive misalignment.
In Practice: Platform incentives vs. premium content
Demonstrated by Leg-bs-001
Connective Tissue (1)
COVID-19 pandemic response as illustration of system fragility
Society shut down during COVID not because half the population was infected, but because a couple percentage points of infections threatened to overwhelm healthcare capacity. This demonstrates that complex systems often appear robust but fail at surprisingly small perturbations. The parallel to AI labor displacement: you don't need 50% job loss to trigger systemic crisis; 2-5% displacement in critical categories (drivers, office workers) could force radical policy interventions like UBI and wealth redistribution. The mechanism is identical: systems are optimized for normal conditions and lack resilience for tail events.
Discussion of AI economic impact and system fragility
Key Figures (2)
Kai Cenat
1 mentionsTwitch Streamer
Example of younger generation streamer who succeeds through authenticity.
- Highest rated stream was when a mouse ran into room and he freaked out
Oprah Winfrey
1 mentionsMedia Mogul
Glossary (2)
UGC
DOMAIN_JARGONUser-Generated Content: content created by platform users rather than professional producers
“They're orientated to ensure that UGC content is the most addictive”
UBI
DOMAIN_JARGONUniversal Basic Income: government payment to all citizens regardless of employment
“You're going to have to rebalance how people make a living, which is UBI”
Key People (1)
Kai Cenat
(2001–)Popular Twitch streamer known for high-energy content
Concepts (1)
Adjacency (advertising context)
CL_ECONOMICSThe content environment surrounding an ad; wrong content association can harm brand perception
Synthesis
Synthesis
Migrated from Scholia