In the past, I’ve written about Outside’s quest to roll-up all of outdoor media and their foray into the web3 space. Today, CEO Robin Thurston announced another round of layoffs (~12%), after previously letting go of 15% back in May.
Of note, he mentions that the Outside.io initiative (their web3/NFT project) is also being paused.
Now, if you’ve been following the state of outdoor media, the economy, the advertising industry, and crypto, this probably isn’t that surprising – but let’s break down the timeline that got us to this point.
June 2020 - Pocket Outdoor Media (POM) raises a $16.5M Series A
February 2021 - POM raises $150M Series B and buys/rebrands as Outside. Here’s what I wrote at the time:
“Unfortunately, raising $150 million in funding means you’ve got some folks to answer to re: growth in both audience and revenue. It’s hard to overstate how many companies have lost the plot in their pursuit of constantly growing numbers in order to satisfy their investors. At some point, this probably means combining teams for efficiency, eliminating less profitable titles, or inadvertently (or intentionally) pushing competitors and new entrants out of their extremely large and valuable ecosystem. Long term, you also have to have a product direction that justifies that major investment. Granted, there are exceptions and that may not be the case here (I hope this turns out to be a net positive for employees/freelancers/the industry) — but I would expect to hold my opinions for another 6-12 months to see how things shake out.”
June 2021 - Outside+ subscriptions launch, combining a range of benefits across titles and companies.
“…Maybe rolling up all outdoor publications into a conglomerate on a single subscription isn't working out that great and you’re using web3 to make Outside+ feel new…Maybe they’re hoping this gets enough traction and has enough web3 buzz words to drive new venture funding for Outside to extend their runway and buy time to figure things out”.
May 2022 - Layoffs across the company and an announcement that print titles would be reduced by 80%.
November 2022 - Additional layoffs and the pausing of their NFT initiative.
What’s the deal with Outside.io?
As expected, it was basically doomed on arrival. They sold a fraction of the NFTs they had available (like, a few hundred out of 10k available — a *massive* flop for someone with an audience of this size), it was plagued with technical issues, their messaging was confusing, and even the small amount of activity in their Discord channel quickly evaporated over the following months. They launched additional collections but with little fanfare and again, almost no engagement. They had vast ambitions for additional releases with big-name figures like Chris Burkard, and a ‘creator marketplace’ where people would list and sell their own outdoor-focused NFTs.
I don’t have any insight into the resources they sunk into this project but I’m sure it was not insignificant. Because of the poor reaction and perception from most of the industry, many fingers will probably point here as an example of wasted money and poor product strategy.
Why is Outside losing money?
There’s a couple of main factors — a big one being reduced advertising as the questions about a recession loom. Companies are lowering their ad spend across all industries and ad-supported businesses are taking the hit.
Less-than-stellar subscription revenue is also probably part of it as well. In his letter, Thurston mentions being “very confident in our membership growth based on improving conversion rates”, which could be due to an increased focus on putting Outside’s digital content behind the Outside+ paywall recently. However, I’m a bit skeptical. I’ve heard from numerous people that the growth of Outside+ was extremely poor. One reason might be that bundling a bunch of separate enthusiast groups together actually made a “catch-all” subscription less desirable because they feel like they're paying for a bunch of content from sports/industries they don't want or need.
What does this mean for Outside long term?
Nothing good, probably. You don’t go out and raise $150 million from institutional investors without a plan to massively grow. It’s likely that the sales pitch for that raise centered heavily on being able to turn Outside into a “tech” company through Outside+ subscriptions AND also grow audience and revenue through web3 projects. Since it seems that the web3 stuff has failed, and (anecdotally) subscriptions don’t seem to be taking off, their main plays for growth are falling flat. The fact that Thurston mentions securing new funding could be an issue in his announcement is also concerning. Given the situation, it's possible they’d have to raise a “down-round”, in which they’re raising additional money at a *lower* valuation than they did in the round previous. At this point, I’m not sure what they plan to do or change to encourage growth in both audience and revenue to maintain viability for further investment.
At my most pessimistic, I’d say that their major bets have mostly failed and I wouldn’t be surprised if Outside sold to private equity or another media conglomerate for significantly less than their previous valuation in ~12-18 months.
Are “we” to blame?
Consumers don’t have a ton of control over economic downturns and advertising spend, but it’s clear that people just aren’t that willing to pay for the content Outside is putting out. Now, you can blame this on Outside’s positioning or pricing of their subscription product, but this is a theme that has been pretty constantly repeated across publications of all types in recent years. I’m certainly in this camp – I don’t get enough consistent value or feel enough of a connection to Outside to pay (although I do have a legacy Gaia subscription). Ironically, I have to wonder if they’d make more revenue if their subscriptions were unbundled.
What does this all mean for outdoor media?
Well, it’s a great case study in how to make yourself the villain. While many outdoor media titles were already struggling, Thurston’s strategy to bring them all under one roof, and then subsequently shut them down and lay people off has centered Outside’s leadership as the focal point of everything negative happening in outdoor media.
While they probably deserve some of that ire, print media was on the decline regardless. The era of large media organizations with a huge writing staff being able to fund their work with dozens of pages of expensive full-page ads was already on the way out. Now, I can’t say for sure what would have happened to these publications (good or bad) if Outside hadn’t taken over. If prevailing trends are any indication, they would have failed on their own. However, the perception is that Thurston’s actions are almost exclusively to blame — leading to folks actively cancelling subscriptions in protest.
I’m not sure what the ripple effects will be across the media industry, there are other folks with deeper knowledge that can probably ruminate on that with more detail. What is clear is that there is a declining amount of money and opportunities out there for folks in outdoor media.
What lies ahead?
I think the future probably lies in smaller, more efficiently run, less frequent titles with less overhead. A focus on quality over quantity and a more human connection with the people and publications you support with your money, rather than subscribing to a giant conglomerate you already have negative perceptions about.
I’ll leave you with these, (still independent) outdoor publications (digital and print) to check out.
Plus, all of the amazing individual creators running amazing blogs, Patreon’s, newsletters, etc.