Are you playing it too safe with your money?

Key Concepts

• SPACs (Special Purpose Acquisition Companies): A method of going public that involves a shell company acquiring a private company. Often associated with volatile valuations.
• Diversification: Expanding revenue streams beyond traditional advertising, including e-commerce, events, and content creation.
• Ignorance as a Strength: The idea that a lack of pre-conceived notions and industry knowledge can lead to innovative approaches and success.
• Pushing Past Failure: The importance of perseverance and continuing to pursue a goal even after experiencing setbacks.
• Creator Economy: The shift in media power from traditional publishers to individual content creators and streamers.
• AI-Driven Content Creation: The emerging role of artificial intelligence in generating customized and accessible media content.
• Fragmentation of Media: The increasing division of the media landscape into niche audiences and personalized content experiences.

The Shifting Landscape of Media: A Conversation with Aaron Levant, CEO of Complex

Introduction

This discussion with Aaron Levant, CEO of Complex, centers on the evolution of the media landscape, the challenges and opportunities facing publishers, and the strategies for success in a rapidly changing environment. The conversation covers Complex’s acquisition history, its diversification strategy, the power of events and creator economies, and the potential impact of AI on the future of media.

I. Complex’s Acquisition and Valuation – A Case Study in Market Timing

Levant details the complex financial history of Complex, beginning with its acquisition by BuzzFeed for approximately $300 million from Verizon Hearst in 2016. This acquisition was followed by BuzzFeed’s attempt to go public via a SPAC (Special Purpose Acquisition Company) in 2023. He highlights the unfavorable market conditions for SPACs during that period, noting that despite BuzzFeed having $450 million in revenue, its market capitalization post-SPAC was only $50 million.

This situation presented an opportunity for Levant’s group to acquire Complex for $108 million, a significant discount compared to the original $300 million price tag. He attributes this success not necessarily to identifying flaws in the previous management’s strategy, but rather to recognizing the advantageous timing and undervalued potential of the brand. He states, “I don't know if they necessarily got it wrong. I think the timing was wrong.”

II. The Evolution of Traditional Media: From Publishers to Platforms

Levant outlines a fundamental shift in the media landscape, moving “from publishers to platforms and individuals.” He uses Rolling Stone as an example, illustrating how a magazine cover once held significant power in shaping an artist’s career. Now, musicians often have larger followings than the publishers themselves, diminishing the publisher’s control.

This shift has also impacted advertising revenue, which has migrated from publishers to platforms. He emphasizes the need for publishers to adopt diversified business models, moving beyond reliance on traditional advertising. “You can become a sniper,” he explains, referring to the ability of platforms to target highly specific audiences, a capability traditional media lacked. He contrasts this with the “shotgun approach” of advertising in magazines. The failure of Vice Media, once valued at over $4 billion, to diversify, resulting in its digital assets being sold for only $20 million, serves as a cautionary tale.

III. Complex’s Diversification Strategy: E-commerce, Events, and Beyond

Levant attributes Complex’s success to a deliberate diversification strategy, particularly focusing on e-commerce. He notes that Complex magazine, since its inception in 2002, always included a “buyer’s guide” section, but never capitalized on this by building a dedicated shopping business.

Upon acquiring Complex, Levant merged it with his existing e-commerce assets, creating the “Complex Shop,” which now generates over $100 million in revenue and is growing faster than the advertising business. He also highlights the importance of events, specifically Complex Con, which has seen a dramatic increase in revenue under his leadership – growing from less than $5 million to over $25 million in less than two years. “We’ve grown that event 5x in less than two years,” he states. This growth was achieved through strategic investments, including securing headliners like Travis Scott and relocating the event to Las Vegas.

IV. Leveraging the Creator Economy and the Rise of Live Streaming

Levant discusses Complex’s approach to the burgeoning creator economy, outlining three key strategies: developing in-house streaming content with hosts like Jordan Rose and Speedy Mormon; partnering with established streaming brands like Versus; and inviting creators to participate in Complex’s events, such as Complex Con.

The partnership with Swiss Beats and Timberland to relaunch Versus is highlighted as a significant opportunity. The first Versus event held at Complex Con attracted over 8.4 million live viewers, making it the second-highest viewed Versus event ever. Levant envisions expanding Versus into other genres, including rock, Latin, and K-pop, and integrating it further into Complex’s event franchises. He emphasizes the importance of live content in today’s media landscape, noting that it “catapults us…to being the biggest thing in live entertainment.”

V. The Philosophy of “Ignorance is Rich” and the Importance of Resilience

Levant shares his personal philosophy that a lack of prior knowledge can be an advantage when entering a new industry. He explains that being “institutionalized with too much information or sometimes institutionalized with fear” can hinder innovation. He recounts experiences where his lack of industry expertise allowed him to pursue unconventional strategies that ultimately led to success. He articulates this idea as, “pushing past the point of failure is where success begins.”

He emphasizes the importance of resilience and perseverance, stating that entrepreneurs must be willing to continue pursuing their goals even after experiencing significant setbacks. “There’s nothing logical at all being an entrepreneur,” he asserts.

VI. The Future of Media: AI, Customization, and Fragmentation

Levant predicts that AI will play a transformative role in the future of media, leading to increased customization and fragmentation. He cites tools like Sora and Nano Banana as examples of AI’s ability to create high-quality content quickly and easily. He foresees a future where content is tailored to individual preferences, with viewers having access to personalized experiences.

He believes that the barrier to entry for content creation will continue to decrease, empowering more individuals to become publishers. However, he also acknowledges that the increasing amount of content will make it more challenging to stand out. “If you can break through and really get attention and an audience, you might be 10 times more valuable than you were in the previous iteration,” he concludes.

Conclusion

The conversation with Aaron Levant provides valuable insights into the challenges and opportunities facing media companies today. His emphasis on diversification, embracing new technologies like AI, and fostering a culture of resilience offers a roadmap for success in a rapidly evolving landscape. The key takeaway is that adaptability, a willingness to challenge conventional wisdom, and a relentless pursuit of innovation are essential for thriving in the modern media ecosystem.