How The Enthusiast Network is Diversifying Its Revenue
Navigating the transition from publisher to multimedia content company.
After Source Interlink Media re-branded as TEN: The Enthusiast Network back in 2014, the company's push towards digital media and video became more aggressive than ever. It recently announced an acquisition and is on the heels of other distribution and licensing opportunities for one of its biggest brands, Motor Trend. Here, Folio: talks with Tyler Schulze, senior vice president of enterprise, about that transition into becoming a multi-media content creation company.
Folio: After acquiring TORQUE.TV, TEN announced it would fold its video content into Motor Trend OnDemand. First, why? And and where are you in the process?
Tyler Schulze: A little background on that, TORQUE.TV had been around for a number of years and worked hard to develop a new brand in the motorsport space, which is relatively narrow. We actually felt that Motor Trend as an established brand, which has credibility with a broad spectrum of automotive enthusiasts, could actually cover more ground. So what we’re really doing is pairing the great motor sports content from TORQUE with the original programming from Motor Trend and Motor Trend OnDemand, as well as some acquisitions of other films and documentaries.
So for us, obviously the Motor Trend brand is the centerpiece of a lot of what we do around here and we think it accurately portrays the full breadth of the automotive video that we’re going to be distributing. We’re planning for a re-launch of motortrendondemand.com in August, which will be completely new and feature the combination of both the motorsports and original and episodic programming.
Folio: What were some of the challenges in making that transition?
Schulze: They [TORQUE.TV] had a working website we’ve continued on with and they’re distributing a lot of live content, actually, which is another draw for our audience. So it’s really just a question of assembling the inventory assets and putting it all together into one package under the Motor Trend brand. So we’re working diligently on that.
Folio: What other partnership or licensing opportunities has this opened up?
Schulze: There’s a distribution partnership with CBS Sports, the cable network. That was part of what we got in the TORQUE acquisition. They had established a relationship to distribute premier international motor sport to CBS. So we have over 130 hours of programming that we’re distributing. We have the ability to sell sponsorships in the programs and television spots so it’s another great way to get exposure for the great content that we have in Motor Trend OnDemand. Motor Trend OnDemand is built to be multi-platform distribution. Now we’re talking about our planning to distribute via mobile, tablets, video game consoles, streaming devices like Roku and Apple TV and smart TVs.
So actually, the announcement and the ongoing business development efforts have really opened a number of doors in terms of bigger players in the industry that are very interested in the automotive category that have significant distribution footprints. We have a pretty large number of ongoing partnership discussions around our programming and ways to partner on that.
Folio: Can you elaborate on the importance of the VOD trend; is this where a magazine media company really has to be thinking if they want to achieve scale?
Schulze: One of the areas of focus for TEN moving forward is really growing our direct revenue streams from consumers versus our historical reliance on advertising by and large. So I would say, enthusiast publishers like TEN have an opportunity to leverage their brands with the editorial authority that they’ve built over a number of years and all of the brand recognition they have across multiple media which we’ve done for many years here now. But, VOD or subscription VOD is just another sort of media distribution platform for us. In addition to print, digital, social, experiential and all that sort of stuff.
We see that the trend is really around diversification of revenue and direct consumer revenue and we think we’re actually doing as good a job, if not a better job, than most of our traditional publishing peers in really diversifying our revenue streams. Part of that is a digital transformation and part of it is just growing entirely new lines of business that are just sort of coming into focus here as an industry. Obviously SVOD is in its relative infancy, but we think we’re at the beginning of a really important trend.
Folio: Since rebranding as TEN, the company has positioned itself heavily around digital media and automotive content. What's going into these ramped up efforts?
Schulze: Our goal has really been to become the first legacy magazine publisher to really make the full transition to be a multimedia content creation company, in all forms of distribution. So we have been reorganizing the entire company around high growth areas, digital video, websites, mobile and social. We have made some pretty substantial investments and continue to grow staff in those areas in line with the revenue growth trajectory. So the answer is yes, we’re accelerating our own transition here by reinvesting in the areas that are going to take us into the future.
Folio: What's the revenue split between print vs. digital at this point in time and what are your benchmarks as you continue to grow?
Schulze: We’re expecting that over 40 percent of our revenue this year will be from non-print sources and this number continues to grow. Like I said, we feel like we’re significantly ahead of most traditional publishing companies in making that transition to true diversification of revenue sources and of note—digital, video and experiential marketing continue to be growth areas for us where we see a lot of opportunity and we’re getting a lot of nice wind in all of those spaces. If we’re at 40 percent today, I think we’ll be eclipsing 50 percent in the next couple of years.