The Morning Brew, acquisitions and MrBeast’s balloon effect
Future News 119
It has more than four million subscribers, makes $50m per year in revenue and has over 230 employees. The Morning Brew is part of the new-nu media generation turning the old school inbox into a serious and modern business venture.
The New York-headquartered enterprise was founded by Alex Lieberman and Austin Rief in 2015. Its initial success came from being the anti-Wall Street Journal or the alt-FT of business news, dropping drab headlines and copy for terminology and riffs typically used by the millennial generation.
The two University of Michigan alumni have since spawned other business-focused newsletters, covering the HR, technology and retail sectors, as well as podcasts and YouTube shows.
Insider acquired a majority stake in the company in 2020, meaning Morning Brew is part of the wider Axel Springer media empire. Lieberman and Rief now have acquisition ambitions of their own, telling CNBC that they want to expand further by absorbing other media companies.
“We want to be doing more of what we’re doing now,” Rief said. “We want verticals targeting new industries, and more creators on the platform who speak to money, work life and business news.”
The duo avoided naming specific targets, but you can imagine it will have to be a media outlet that fits their philosophy of promoting “deep loyalty”, something Lieberman spoke about in 2019.
“People think it probably can get monotonous and email is not like an exciting technology, but often in my view is that what is sexy is building love,” he told students at his old university, according to The Michigan Daily.
“With an audience that you can then parlay into other things, there are so few media companies in the world right now that have actually built deep loyalty with their audience.”
Lieberman later expanded on this, outlining his ‘balloon effect’ theory in 2021. Essentially, content creators have the ability to move from gradual growth to exponential growth, and then “your [brand] size explodes”.
To reach that tipping point, however, you have to foster the environment and slowly build committed followers, which, to use his own words, can be a “slog”.
The poster child of the ‘balloon effect’ is Jimmy Donaldson, otherwise known as YouTube’s MrBeast. The 23-year-old has spent more than a decade agonising over the Alphabet-owned platform and its infamous algorithm, eventually racking up more than 90m subscribers on his main channel – he has five others and has started to dub his videos in Spanish to reach an even greater audience.
Donaldson failed and failed again, and then succeeded. But this hard-won success and the deep loyalty of his followers now means he can successfully launch a ‘virtual’ burger chain (MrBeast Burgers, of course) because of the trust and mega-marketing platform he has built.
In vast contrast to The Morning Brew and MrBeast, meanwhile, the Old Guard of the news media indstruy is still holding its own. A good example is New UK’s The Times, which hit a record pre-tax profit of £34m ($44.5m) in the year to June and more than 580,000 subscribers. That’s 237 years of deep loyalty in the making.