Key Takeaways: AMO Summit 2024

The AMO Summit, put on by A Media Operator's Jacob Donnelly, pulled together top media minds to discuss successful media companies, innovative business models, and where things are headed going into 2025. Here are Flexpress's key takeaways.

Who spoke: AMO Summit 2024

2024 Summit-goers heard from a compelling cross-section of industry leaders, such as The Atlantic, Axios, Semafor, FutureProof, Money20/20, Newcomer, Apartment Therapy Media, and EagleTree Capital.

Who attended: AMO Summit 2024

Attending media operators included Hearst, Stacker, St. Louis Magazine, Blockworks, Prep Network, They Got Acquired, Morning Brew, Colossus, Written Word Media, Citywire, The Well News, Boston Globe, Rodman Media, and Blavity.

Conference Video: How Infrastructure Creates Enterprise Value

Flexpress CEO Ajay Rayasam and Refact CEO Saeed Abbaspour unpack how to create more revenue and M&A value by upgrading the infrastructure supporting a library of high-value content: 

Key Takeaways: AMO Summit 2024

Across each session and networking conversation we identified the following as key meta-narratives on the industry:

1. Practical uses of AI is on everyone’s mind
2. AI carries a fairly negative connotation
3. Events are becoming a bigger part of media companies
4. The “New Era of Media Companies” has created media fragmentation
5. M&A Activity is expected to increase in 2025

Read on for Flexpress's more detailed thoughts about what we heard during the AMO Summit, and how these key takeaways affect website operator decision making heading into 2025.

#1: Practical uses of AI is on everyone’s mind

Pretty much every discussion we had with conference attendees touched on AI, and AI's effect on media operators was sewn through every single panel and session during the conference. 

Despite AI being on everyone's mind, there did not yet seem to be many widely-adopted AI use cases; everyone is very much in the trying and testing phase for many different operational applications. Some key observations:

• Just like hope, ChatGPT and Claude aren’t "strategies". Like any new technology, companies have to define where AI can add the most value and evaluate its application with goals and frameworks for measurements (KPIs) that is no different from any other work project.
  
  
• Top use cases seem to be workflow-oriented, e.g. publishing workflow efficiency gains, headline suggestions, content tagging for taxonomy improvements, and possibly content layouts and strategies.
  
  
• Apartment Therapy uses a dedicated, "Tiger Team"-like approach to figuring out practical AI use cases:
  • Cross-functional team (Product, Eng., Content) that is tasked with identifying, testing, productizing, and deploying AI-driven use cases
  • From Vijay Nathan, SVP Product Apartment Therapy Media: "If you want AI to be successful or implemented, you have to find the early adopters in your organization who are really interested in it and allow them to explore potential use cases.”
  • This team can find opportunities and then is tasked with operationalizing them across the organization
  • Potential challenges to manage with this approach:
    • It's not everyone's full-time job; if not empowered, it can fall by the wayside
    • Turning a tested idea in a small group into a organizationally-adopted process is challenging, so change management is critical

2. AI carries a fairly negative connotation

The Atlantic’s deal with OpenAI 

For background, here's the press release. At a high level, The Atlantic is partnering with OpenAI to make its journalism discoverable through OpenAI products, like ChatGPT, while maintaining editorial independence. The collaboration allows The Atlantic to influence how news is surfaced in AI platforms and gives them access to OpenAI’s technology to develop new products through their experimental platform, Atlantic Labs. They also get paid for this (numbers were not disclosed.)

• • Deal was controversial: CEO Nick Thompson spoke on this topic, which we found really interesting. The main public pushback to this deal was that media companies should not sign deals with tech companies because they have been burned in the past (e.g., Facebook).
    
    
  • Bad deals vs. bad deal habits: CEO Nick Thompson pointed out the difference between a bad trend and a bad deal. For example, despite Facebook hurting many publishers, Facebook ads drove the most subscriptions for the Atlantic of any channel during testing. Is brokering deals with tech companies bad for media in general, or did they just strike bad deals in the past? Thompson aligns with the latter category.
    
    
  • AI companies have two costs: Compute and Content (i.e. training data). AI companies have no issues paying for compute (storage and processing) but for some reason believe that the training data (in this case, internet content) should be free. Thompson believes that should not be the case and a company such as The Atlantic should be paid for its IP if it is going to be used to train AI products. The alternative perspective is the curreny NYT lawsuit (see below).  

The Times Sues OpenAI and Microsoft Over A.I. Use of Copyrighted Work

For background, you can read the NYT lawsuit story here, but at a high level 
The New York Times has filed a copyright lawsuit against OpenAI and Microsoft, accusing them of using millions of its articles without permission to train AI models like ChatGPT. The lawsuit seeks billions in damages and asks for the destruction of any chatbot models trained on Times content.

• • Do AI companies violate copyrights? Well, they don't keep copies of the content, and their end goal isn't related to the content itself. Still, media companies are having their content taken without compensation so that AI companies can make a product worth billions of dollars. See the above on the Content and Compute costs issues.

Should AI be used to create content? Pretty directly, the common response is "No." And almost unequivocally "No" for anything related to original thought.

• • So why are people still creating content with AI? Dan Shipper, the Co-Founder/CEO of Every offered that he uses it to summarize widely-adopted concepts or ideas to use in his content creation as a means to eliminate rote work (but never original thought). For some, even this is a encroaching on territory they want to avoid (it’s like crossing the Rubicon). 

AI is useful but it's changing behavior. At the end of the day, AI is definitely impacting search traffic, and traffic in general. Apartment Theory has seen a decrease in search traffic. Google is also doing a lot to takeaway traffic, for instance, extracting content to show for recipe searches. More than anything, being on the first page doesn’t mean what it used to, as Google's product seems inferior today than it did yesterday. Organic search results are being pushed further and further down the page. 

3. Events are becoming a bigger part of many media companies, but have we reached “Peak Event”?

Almost every company the spoke on a panel had some sort of event strategy, with the theme being: “Media and......” Events are becoming larger and larger parts of companies revenue models because the margins are, for the time being, so strong. 

Companies such as the Newcomer, founded as a newsletter, see its core content and newsletters as more than just a content delivery platform and effectively a promotional tool for its events. Workweek self-identifies as a “connection business.” With proliferation of events, it’s critical to find ways to make events unique and value-additive for attendees because there is saturation (different types of events, fostering connections at events v. just content, standing out, etc.). 

At some point, we’ll hit “Peak Event” — we might already be there, or approaching it. In that case the companies with the strongest audience command will likely win out. 

4. The “New Era of Media Companies” has created media fragmentation 

Right now, it's never been easier to start a “media company” — look no further than the aforementioned AMO, Newcomer, Workweek. According to Workweek, people crave content that reflects passion and expertise, and the ability to create and promote this type of content no longer requires large companies to command audiences. As a result, the media landscape is as fragmented as it’s every been, and that's before you even get under the hood.

When there is fragmentation, you typically see consolidation follow. Are we setting up for more M&A activity in media?

5. M&A activity is expected to Increase in 2025

According to Collingwood, valuations have remained stable amid increased competition and fragmentation in the industry. Key value drivers, however are largely unchanged:

• Quality of earnings (s/o to our partners RedRidge)
• Market leadership and potential
• Governance
• Fast, predictable growth
• Great products

Outlook for 2025-27: Macro environment combined with pent up demand will boost activity, growing competition. New entrants will expand buyer pools, and continued caution means greater scrutiny is here to stay — increasing the important of being prepared. Hence our talk at the conference: 

The Silent Dealmaker: How Infrastructure Creates Enterprise Value

• According to Jacob Donnelly, the media companies that will win in the future will: #1: Know their audience and #2: Know how to monetize effectively
  
  
• Highlights from the Semafor deep dive into advertising and marketing spend: 
  • Emphasis for advertisers should be to connect spend lower in funnel. You have to go beyond traditional metrics of views, impressions, leads and drive more toward showing evidence of conversion. Highlights from the Semafor deep dive into advertising and marketing spend:
  • Performance gaining more traction than brand marketing. Brand marketing is not dying, however, it is changing. 
    
    
• Atlantic brought back print; why? Some of the rationale: could increase retention, brand enhancement, and additional ad revenue. And, if the internet goes to shit, then maybe print is a good place to be?

We thoroughly appreciated every panel at the AMO Summit, and all the conversation packed into one day. Want Flexpress's full notes from the event? Please feel free to reach out.