Show notes
The guest on today’s edition of The Unmade podcast is Luke Girgis, CEO of The Brag Media, which has quickly become the dominant publisher in the Australian music industry.He talks to Unmade’s Tim Burrowes about how The Brag Media came about, why they eventually passed on buying Junkee, and how Variety will be the company’s bridgehead into the screen industry.Transcript:Tim Burrowes:Welcome to unmade. I'm Tim Burrowes. My guest today is Luke Girgis, the CEO of Brag Media. Luke, welcome along. Now the reason for chatting this week is you've just picked up the Australian franchise of the very storied business title, Variety, and we will talk about that in a minute. But firstly, I'd love to just talk a bit about the story of Brag Media, because it feels like in a very short time, you've gone very fast. How do you tell the story so far?Luke Girgis:Well, before that, Tim, I just want to give you a bit of a credit for Unmade. How long have you been doing Unmade for?Tim Burrowes:Unmade, we started back in September, properly. So I guess that's about pretty much nine months.Luke Girgis:Crazy. I'm so impressed with how you've built it in nine months. It's actually incredible. It's the thing that I read every time it hits my inbox. So huge credit to you.Tim Burrowes:Ah, you're very kind. Thank you.Luke Girgis:Brag Media I started in 2017, and was actually an idea that I had when I worked at a record company because I saw how much money, how much of our marketing budget we were spending on publishers promoting records. And I thought, these publishers are kind of underperforming and I wonder how much it would cost to actually just buy them and run them ourselves, maybe turn them profitable and then have this asset that is profitable on its own. But it also allows us to market our artists through for free. And I kind of did some maths and we could buy one or two of them at kind of two years our marketing budget. And I thought, this feels like a no brainer. Maybe I'm stupid.Luke Girgis:So I put together a business plan, worked on it for about three months, took it to my boss. She told me to get fucked, and I did, and met my co-founder Sam Benjamin. We looked at a lot of things. We even looked at starting festivals, running management businesses, running a record label. We looked at a whole bunch of these things, but ultimately, we thought, we want to do it all. The Brag Media's mission is to be ubiquitous with Australian culture, be at the center of culture.Luke Girgis:So if we want to live to that mission, we need to do it all. We need to be running events. We need to be running record companies. We need to be managing talent. We need to be doing all these things. And if we have a thriving publishing business at the center of all of that, it's going to make all of those other plays a lot more fruitful. And that's what we started with. We started with the publishing business.Tim Burrowes:Now that's really interesting, because I presume from that, by coming at it from that direction, would be different to someone coming from a more traditional publishing background who would probably start with, okay, display advertising, what revenue can we bring from that? Paid audience, where can we bring from that? Whereas I presume you are thinking much more laterally around what people would loosely call content marketing budgets, and that sort of thing. So I imagine your kind of revenue streams probably look quite different to the traditional.Luke Girgis:Yeah. That's certainly what I've learned. I didn't kind of know that coming into it. When I first started, I remember day one, Poppy Reid, our editor in chief, I remember going, "Wait, what's the difference between editing and subediting?" I didn't know anything. And so we've built this what business, which appears to be, relatively speaking, super diversified in publishing and media, with it. And it's really defensible as well. I feel like it'd be very hard to come in and compete with what we've built.Luke Girgis:And yeah, we certainly survived COVID, which is a huge win, and even just surviving it's great, but we've actually grew 200% year on year in revenue. So that all seemed to have been possible because of maybe my ignorance in publishing. And I didn't go that traditional route, but it wasn't like ... I don't feel like a genius for it. I just didn't know any different.Tim Burrowes:Luke, honestly, when you try something new in publishing, not being aware that the world would consider it a bad idea is sometimes quite a big advantage, I know I've discovered in the past sometimes. So where are you at now in terms of scale? I know it's not the ultimate measure, particularly when you use freelancers, but what's your current kind of staff number, for instance?Luke Girgis:I think full time we have about 25, but a lot of casuals and a lot of freelancers. That's probably a question for Poppy Reid and Joel King, but yeah, it feels about 25, I think.Tim Burrowes:So I'm guessing you must have a turnover, what? Sort of four or five million or something like that?Luke Girgis:I don't know if Sam Benjamin, my co-founder wants me to disclose that, but it's well more than that. It's a lot more than that.Tim Burrowes:Right. Okay. Well, you can't blame me for having a little guess, as well.Luke Girgis:Oh, I would've had a swing too.Tim Burrowes:Okay. Well, let's talk about Variety, which is the latest member of the stable. And this is interesting, because Variety as we would think of it from the US, its sweet spot was of the screen industry and of Hollywood. So it's a sort of new, or at the very least kind of peripheral addition for you. Because up to now I guess your center spot, although general entertainment, has been around the music industry. So why does Variety make sense?Luke Girgis:So you are right on that. We're kind of famous for our music. That's how we started. But it's certainly not where we're at now. So we have a huge gaming network as well. The Variety launch makes sense when you understand that sort of mission statement to be ubiquitous with Australian culture. We want to be everywhere Australians' passion points are. We identified that music was the number one interest for Australians. So that's where we started. Also helps that I'm a music nut, and have been in the music industry for 15 years.Luke Girgis:But we started with music. That's what we're experts in. Then we've expanded out into gaming and we have a really strong gaming network with the acquisition of Epic Digital, and we've also got fashion now with HYPEBEAST. And so the next frontier is screen. It is film. And we've been wrapping Variety for about a year now, just monetizing the Australian traffic. You might need to fact check me on this. I've got to get the exact numbers, but it's about a million Australians already read Variety every month.Luke Girgis:I think it might be 800,000. Something like that. I should have checked before we got on this call, but a lot of Australians read it already. And we've seen a lot of success commercially with the Variety brand without us even publishing one story. So the adding Variety, adding screen to our stable, when you think about what our mission is and the commercial success we've already had with that brand, doesn't seem as left field as I think it's maybe internally as it might seem externally.Tim Burrowes:Yeah. And something I'd be interested to get your thoughts on is, when I think about the sector, I have slight post-traumatic stress disorder from earlier in my time when I was one of the owners of Mumbrella, we bought Encore, which was the Australian version of Variety, I suppose. So even back in the day, we actually wrecked Variety ourselves for a while, actually. So we were always glad when they did their Australian edition in the kind of US version of Hollywood. And we got to sell in all those full page ads for the Australian studios.Tim Burrowes:But something we found, and ... I look back now and I would describe the way we came to it slightly arrogant, that we felt we knew the communications industry quite well. And this felt like a bit of a parallel world, that we wrote about, certainly, on the screen content already. And I guess remember I got this sense that certainly the Australian screen industry was very, very clubby, and it felt like there was this real attitude of, well, who the hell are you? You've not been in the production sector for 20 years. So what are your kind of credentials for writing about and being of this world?Tim Burrowes:And it felt like we never actually got to a point where we were particularly accepted as of that industry. So I guess the question is, how are you thinking about breaking into that world?Luke Girgis:When was that? What year was all of that happening?Tim Burrowes:This would've been long before streaming. So you were talking, I'm going to guess about 2012, 2013, something like that, long enough ago that we were still in print.Luke Girgis:Yeah, yeah, yeah. So I think the industry's changed a lot since then. It's only in terms of revenue, like 1.9 billion dollars in production in Australia last year. It's just insane. There's never been more money in Australia in this industry. Therefore, it's never been bigger. So potentially you might be right, that it is very clubby. The music industry is enormous here, and it is very clubby. But I think we're navigating that in two ways. One, we are ... I'm not going to be a Variety writer, I can promise you. We've got some real industry experts contributing and on staff.Luke Girgis:And Jake, our B2B trade editor, is editing Variety. And he's been a passionate fan of this brand for as long as I've known him, which is about a decade. He always talks about Variety and said one day he dreams to work with Variety. And it's just so happened that he is now. And that's exciting. So we have industry experts working on it, but the market is so different now, Tim. Back in the day, it was all very small industry in terms of market cap and revenue and all of that.Luke Girgis:So there is a lot more room for politics to disrupt things, but when there's so much money being put into an industry, and there are some great trade blogs out there and trade websites out there. But there's nothing as iconic and as widely respected as Variety in the Australian market right now. I mean, in the world, really. It's the most respected screen publication in the world. So to bring that to Australia, I think with where the industry is now, versus when you guys were representing it, we're just very fortunate of timing, I think, is the answer. And we're very excited about that.Tim Burrowes:And I suppose that's certainly true. If there's one story of the screen industry over the last, well, probably 30 or 40 years, has been, it feels like it's kind of feast or famine. There were some amazing tax breaks for the screen industry in the seventies. Right now, of course, we're in this kind of golden period of production funding because there's so much streaming investment going on at the moment, which feels like what's driving the screen sector.Tim Burrowes:Now that arguably over-investment in streaming is perhaps peaking now. Does the plan for Variety work as well with a smaller industry, if it turns out it is moving to the other side of the cycle?Luke Girgis:If it retracts, yeah. Look, the thing that we learned with launching music publications, and I think we're going to take a lot of lessons from that, is that if we were relying on the music industry to fund our music titles, we would've died like everybody else. And so, although it was true pre-COVID that 50% of our revenue came from the music industry, we have increased our revenue since then by over 200%, as I mentioned before. And now the revenue that comes from the music industry on our music titles represents less than 5%.Luke Girgis:And that was always our goal to get there. We were just trying to figure out how to achieve it, and we finally did. And I think that is the lens that we are looking at with Variety. We don't want to rely on the film industry or the screen industry to fund Variety. We want to focus on servicing it. Now, if revenue comes from that industry, fantastic. But that is not going to be how we live and die.Tim Burrowes:And I presume that will be some of the tap dance as well, is you refer to that maybe 800,000 number that you're getting in terms of visits. Now, clearly the industry itself isn't that big, which suggests quite a big consumer audience landing there because, hey, look, it's a world they're interested in as consumers. But presumably your sales model will be about having an audience of industry insiders, people working within the industry.Tim Burrowes:So how are you thinking about the sort of content you shoot for? Because presumably it'll be quite easy to just do, here's the latest trailer for the latest Marvel movies just dropped, and get some easy traffic. But that's not going to really garner you that audience of insiders. So how are you thinking about your focus on the editorial content?Luke Girgis:Yeah, so primarily, Variety's been around for 116 years servicing the screen industry and the professionals that live within it at the highest executive levels. So there is a certain type of content and certain level of detail and certain level of education and insight you need to provide to continue and engage those audience. And that is unwavering. But what I think has changed, and not changed actually, has been in addition to over the last maybe decade or so is that Variety has started engaging the most passionate and diehard film fans and bringing them into the tent as well.Luke Girgis:And then slowly turning sort of half interested film fans into diehard film fans. And so you have this highly passionate consumer audience, as well as the executive audience. And we do need to run ... that's not the same content obviously. But there is content, that you can run a piece of content that appeals to both audiences, but then you also need to run separate content lines that appeal to one and the other. And that's something that we are borrowing that strategy from the US to launch. And we will evolve that strategy as we get more data and more learnings for the Australian market.Tim Burrowes:And I take it that rather than just being fed by press releases, you'll look to break news. What sort of editorial resource are you putting behind that?Luke Girgis:I really wish Jake, our editor was on this call. So he's got the playbook. At a high level, we've got three incredible writers plus Jake on Variety, and a contributing team. So I don't know how big that contributing team is and what the details of it are. But there's a good team behind it and we're definitely going to launch with quality, not quantity. So you don't come to Variety for every time someone interesting kind of sneezes or whatever. That's not going to be our play. We're going to really launch with quality first, and then as we learn and as we grow, so will the volume of content that we produce.Tim Burrowes:And initially, it's digital, but there are plans for there to be a print edition as well.Luke Girgis:Absolutely, yeah. We've had a lot of success with the Rolling Stone print mag. So we are just going to take all the learnings from that.Tim Burrowes:And do you have a sense of how many editions a year you would hope to put out of the print version?Luke Girgis:Going to keep that sort of close to our chest for now, not because I want to keep things a secret, but we're still deciding. We will most likely do our first edition this year. So if you look at Rolling Stone, just a bit of a clue on how we're thinking about things, we do four issues a year with Rolling Stone, and one issue a year is our collector's edition. So first year, we did the 50 greatest Australian artists of all time. The second year, we did the 200 greatest albums of all time.Luke Girgis:Both of those issues outsold both in terms of advertisers and in terms of readers, and then new subscribers, I would say by a factor of five, at least. Again, I don't have the number on me, but it's just a massively out-sized return on those collector's editions. So it's that kind of learning and that kind of thinking that we're going to bring to Variety.Tim Burrowes:And it's worth mentioning that Rolling Stone and Variety have the same owner in the US, which is where you've done the franchise deal with.Luke Girgis:And that's why we have such confidence to keep investing with these guys, because they're in incredible. The PMC team in the US are an unbelievably professional and awesome team to work with. They are just so passionate about our success. So it's just so incredible. I've heard horror stories about JVing with international offices and licenses and whatever, and all those kind of different versions, many times. And I've just not experienced even a little bit of that with PMC. They're just an incredible company.Tim Burrowes:And what is this one? Is it a straight franchise arrangement or is it a JV?Luke Girgis:It's structured as a license, but a 30 year one. It's very long, with options to extend. So yeah, we're not going anywhere.Tim Burrowes:And you just share a portion of revenue, presumably, based on all of the activities of the brands?Luke Girgis:Yeah. So they have a bunch of obligations to us in terms of resource support, access, all of those things. And then we pay a percentage of our revenue back to them.Tim Burrowes:Which is a long time since I've done one of these deals. But back in the day, I seem to remember a number of like 8% or something. Is that still broadly the ballpark these conversations happen in?Luke Girgis:Yeah. The PMC NDA prevents me from confirming or denying, but I wouldn't say you are very far off, but yeah. I can't give you any extra in the comment.Tim Burrowes:And then a few other plans you've got include an awards, the Variety brand, and a power list as well.Luke Girgis:Yeah. Again, learning from what we are doing with Rolling Stone and our other brands, our events business is a meaningful part of our revenue growth. So we see the Variety brand as something that both consumers and trade are going to really resonate with. And that gives us a massive opportunity in events. And so we have a lot of plans for next year and over the next five years on how we're going to grow the Variety events business.Tim Burrowes:Now, you've mentioned a couple of times Poppy Reid, who leads the editorial output. I was watching a video stream she did a few weeks back for the Australian Institute of Music, where she talked about how you recruited her and how when you told her your plans for the company in the first place, she thought you were crazy. How did you change her mind?Luke Girgis:I don't know. I actually tried to talk her out of taking the job, to be honest. I was like, "Look, we might be bankrupt in six months. I don't know what I'm doing here." I was really nervous because ... it's very hard to get a senior journalist job in music. All she ever wanted to do in her life is write in music. And she had an incredible trade job. And I was like, "You're going to leave that security and come to me? I don't know what the hell I'm doing."Luke Girgis:But I think she is really driven by professional development and growth. And I think she felt like she sort of hit a ceiling where she was at, and she thought it was worth the risk to come over. I think, actually, I do know the answer. What she said to me was if I come over and we go bankrupt in six months, I will have learnt more in that six months than five more years where I am. She rolled the dice. I am so grateful she did. There's so much of this business that wouldn't exist without her. She runs the whole place. I'm just forever grateful that she took that chance, and how committed she is to the business.Tim Burrowes:Well, she also said in that chat that you want her to be the CEO. So what's the timeline for that?Luke Girgis:I wanted to give her the option. I don't know if she still has those kind of ambitions now. I think she's just really found her groove as an editor in chief, and I think she's also learned a lot of the b******t CEOs have to do, which she might not want to deal with. So I don't know. I guess that's an evolving thing. You have to ask her that, maybe in a different interview, but yeah. It's something that I was kicking around with her back in the day, for sure.Tim Burrowes:And you've obviously got your own appetite for entrepreneurialism beyond Brag Media as well, Lamp Post Capital. That's something else that you've done, which is a fund for making investments in startups. What's the model of Lamp Post?Luke Girgis:This is something I'm actually really excited about, and has a really interesting story. So our talent management division manages a creator by the name of Simone Giertz. She's based in LA. She's the largest female STEM creator on the planet. So she's got this enormous YouTube following. She's an inventor. She creates inventions and puts them on her channel, ends up on late shows, et cetera. A big fan of Simone is Alexis Ohanian, who is the Reddit founder. And he also happens to be married to Serena Williams, the tennis player.Luke Girgis:And when he was in Australia, I went down to Melbourne and had coffee with him, and was swapping notes about what he's doing and what I'm doing and all of that. And he had the idea of basically anchoring a fund that Simone and I would start. So he basically said, "Well, look, why don't you and Simone start a fund together? I will anchor it. I'll put in 500,000. You can make it a million dollar fund and raise another 500,000 on top of that, so it's a million dollar fund, and go out and see if you can find some incredible founders and support them to their success."Luke Girgis:Obviously, the appeal is that Simone, I mean, she's a genius. She's a lot smarter than me at a lot of things, both creatively, as well as in terms of all the inventions she does. In terms of products, she's amazing, but she also has this incredible creative brand. I always said if she wasn't a creator herself, she'd be an executive at a creative agency or something. So she's a genius in that sense. And then obviously I've got a lot of experience building businesses, and we have a really big media business here that could be very helpful to founders.Luke Girgis:So those two things combined, we go out and Simone and I try and find founders we love building incredible products that we think can go on to be icons of their industry, the Apple of whatever they're doing or the Tesla of whatever they're doing. And very early stage, pre-revenue, just building a product. Is there something here that could it be incredible? And if we both believe in it, then we'll bet on it. And we'll use our fund to invest in the company. It's not huge investments, so million dollar funds. Write checks of anything between 10 to 50,000.Luke Girgis:So it's not going to change anyone's life, but what we're saying is, "Hey, let us put a little bit of money in, and then also let us help you." And that's the value I think we can add. So it's more about the help we give than the money that we give. But-Tim Burrowes:And how many investments have you made so far?Luke Girgis:We have made three investments so far, two in the creator economy, one which is a company called Novel, whose slogan is, "The Shopify for NFT should just be on Shopify," and they've built a product to be able to just sell and create and buy NFTs in an incredibly user-friendly way. The other one is Fourthwall, which is like a Shopify competitor, but specifically built for creators. So Simone uses Fourthwall, because they're an unbelievable product. Herself and the biggest creators in the world use them.Luke Girgis:And then the last one is this company called Cana. I can explain it to you quickly, but you won't believe it. So everyone should just look it up. It is a drink printing machine that prints any drink you want in your kitchen with just putting in some water. It'll print beer, wine, coffee, juice, energy drinks. It is the most incredible futuristic thing I've ever seen. It will be bigger than the iPhone if they pull this off. And we've put a bet on that.Tim Burrowes:And these bets are not necessarily Australian companies. They could be global companies.Luke Girgis:Yeah. Those three are all American. Yeah.Tim Burrowes:Interesting. Do you see opportunities for investing within Australia?Luke Girgis:Absolutely. Yeah, I've been meeting with Australian founders, like all the time. We haven't made an investment yet, but I really want to, so if there's any Australian founders out there that send me an email, I'm very easy to find and I'd love to hear what you're working on.Tim Burrowes:And let's go back to Variety and Brag. And I suppose this as well, how do you think about managing conflict? And I suppose where I come at this from is, I presume that Variety must have some pretty strict rules given their own excellent editorial reputation. Yet the music industry sort of often feels the person who reps an artist might also have more fingers in the pie as well. So when you kind of think about that sort of pure editorial model of years gone by, is that just out of date now?Luke Girgis:Like I said, I'm very new to this industry. So I don't actually have much of a reference on what it was like back in the day. We have just come into it where we feel like there's a conflict. So we're managing Simone Giertz, and she's about to release a huge products line, product business. We take it to the editorial team. If it's something that they would write about, they write about it. If it's not, then we need to book a campaign. And so we book a campaign through the system like we would any other client. The record labels spend with us all the time to promote artists.Luke Girgis:So my brother has a record label. When he wants to run a campaign with us, he runs the campaign like everybody else. So that's the kind of way, I think people can overthink it. We just operate with our own stuff like we would anybody else. And we follow the editorial rules of whatever that publication is.Tim Burrowes:Understood. And where do you go from here? Is it more verticals within the wider entertainment vertical? Is it doing the same again in another country? What are you thinking about for the next stage of growth?Luke Girgis:The immediate next stage of growth is, if you go onto the Brag Media website, you'll see all the buckets in which we do work. And that is basically to fulfill our mission, to be ubiquitous with Australian culture. So what does that mean? That means where people are, if people go to events, we need to be doing events. So growing our events business is a big focus of ours. And it's something that we've had a lot of success with over the last year, growing our publishing business, continuing to grow the network. We now reach eight million Australians every month, which is 32% of the Australian population. How do we get to 50%?Luke Girgis:That is something that we're thinking about. We have a creative agency, we have a media agency where we help. When I say media agency, it's not to compete with the existing media agencies out there, but ... there's a lot of people that aren't Coca-Cola that need ... Like we are working with Send, for example, a grocery company, helping them. We help them with all their outdoor buying and all of that sort of stuff when they first launched, just because they're a startup and they needed another startup business to help them. And we had a lot of levers to pull. So we helped them there.Luke Girgis:And then we also are launching a consumer app to help people find gigs, go to gigs and make the live music industry a lot more prosperous coming out of COVID. So there's a lot of levers that we're pulling there, and that's our immediate growth. It's certainly not an international ambition yet.Tim Burrowes:And just touching on that sort of being of Australian culture, you were reported as one of the interested parties in Junkee, when that was for sale, when Ooh Media was selling that. Now, that went to the RACAT Group in the end. Did you come close to buying that, do you know?Luke Girgis:Yeah. Well look, depends on how you define close. We were one of the last couple, I think.Tim Burrowes:Yeah. I guess RACAT, in the end, it came out, they paid 2.5 million for it. I guess, was your bid anywhere near that?Luke Girgis:We had a seven figure bid, but I wouldn't say it was near that. But that's not to say it wasn't worth that. I think the Junkee brand's really good and we were really looking at it seriously, but there were a couple of things that prevented us from getting to that level, which I think it's worth that for sure. I think it's probably worth more than that, if I'm being honest. We didn't get up to that level because, as you saw, we announced two other acquisitions at the time. So there was an opportunity cost there and we thought we could get a faster growth out of the other two acquisitions than Junkee, and too, Junkee was sincerely very different to what we were currently doing.Luke Girgis:They do news. They do politics. We don't touch that. We touch, at the moment, we're all geared up for passion points, gaming, music, film. We're very deliberately not doing any hard news, any politics, any of that stuff. If we do touch it, it's because it intersects with an artist or a film star or whatever. So it was a huge deviation in our content focus. And we also had two other acquisitions that were distracting us at the time. So that explains, I think, why we didn't follow through there.Tim Burrowes:Well, Luke, best of luck with Variety, and thank you very much for your time.Luke Girgis:Thanks, Tim.Tim Burrowes:Today's podcast was produced with the support of Abe's Audio. More soon. Toodlepip.Speaker 4:Unmade.Speaker 5:Podcast edit by Abe's Audio.Audio production on Media Unmade was courtesy of Abe’s Audio, the people to talk to about voiceovers and sound design for corporate videos, digital content, commercials and podcasts.Message us: [email protected] This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit unmade.substack.com