Bleacher Report targets commerce, licensing as new business lines

“One of the great benefits of being owned by Turner is that we have a lot of opportunities that some of our VC-backed competitors don’t,” Mittman said. “So we’re not downsizing. We’re growing, and some of the new hires are going toward separate and discrete teams we’ve created for e-commerce and licensing.”

Breaking into commerce
In addition to “Game of Zones,” Bleacher Report has “Gridiron Heights,” an animated series focused on the NFL, and “No Script,” a documentary series starring NFL player Marshawn Lynch that Bleacher Report developed for Facebook Watch. Bleacher Report also has a big hit with its House of Highlights Instagram account, which is followed by everybody from LeBron James to Drake. Out of these media brands — and others in the pipeline for 2018 — Bleacher Report sees an opportunity to create merchandise and other products that people would want to buy.

Last year, Bleacher Report ran a small test where it created a line of clothing based on the “Hoodie Melo” meme (featuring NBA player Carmelo Anthony practicing in a hoodie). The hoodies, at $60 each, sold out in just a few hours, Mittman said. Similarly, Bleacher Report hired an artist last year to reimagine NBA team logos in honor of Black History Month, with franchise names such as the Bed Stuy Rockers and the Chicago Defenders. It’s easy to imagine apparel and other products carrying those logos, Mittman said.

“It’s a great advantage we have with the Turner relationship — just look at what Adult Swim has been able to do with ‘Rick & Morty,’” said Bleacher Report president Rory Brown. “There’s a certain demographic that is so in love with that content that they’ll support it in whatever way they can. People are not going to buy some random piece of swag from a brand they stumble upon on Facebook. That’s what we’re focused on.”

Licensing shows
Two years ago, Bleacher Report formed its B/R Entertainment division to create video shows for Bleacher Report’s own platforms and other distributors such as Facebook Watch. Led by Neil Punsalan, it’s focused on projects such as “Game of Zones,” “Gridiron Heights” and “No Script,” which Bleacher Report reportedly licensed to Facebook for “millions” of dollars. Bleacher Report has five such entertainment projects that it plans to focus on this year, said Brown.

“We’re going to be smart about [the licensing business] versus trying to jump in the deep end of the pool,” said Brown. “You can find success here — and many entertainment companies have for a number of years — but you’re talking about relatively young media companies going up against established Hollywood brands. So we’re going to be careful.”

Revenue diversification and decreasing platform dependency have taken on greater importance for publishers since Facebook announced that it would devalue media content within the news feed. Bleacher Report’s decisions to go into e-commerce and content licensing preceded Facebook’s announcement, but they point to the need for digital media companies to have multifaceted revenue models.

Bleacher Report revenue grew more than 20 percent year over year in 2017, according to Brown, who wouldn’t give a hard number but said the company was profitable. Ad sales on its social media accounts, which include custom branded video and sponsorships, contributed about a third of total direct revenues, said a company spokesperson.

While there is concern that Facebook’s algorithm change will eat into the advertising revenue publishers can make on the platform, Bleacher Report executives said they were not as concerned as other publishers that are more reliant on Facebook might be. Facebook accounts for 12 percent of referral traffic for Bleacher Report, said Mittman. Still, if Facebook favors posts that users interact with and share, Bleacher Report stands to benefit because people already interact a lot with its content. The publisher had 120 million “interactions” on social platforms in December, compared to 55 million for ESPN and 35 million for BuzzFeed, according to CrowdTangle, a Facebook-owned social measurement firm.

“Most of what we consume today and most of what is at risk because of the algorithm change is ‘basic feed’: It’s content that’s found but not sought out; it’s low engagement, has low shareability and is just filling space,” said Mittman. “We’re focused on making sure the content we create resonates with people in a deep way — they see it as a need.”

App investment is coming
Entering year three of Turner’s $100 million investment in Bleacher Report, growing audiences and revenue through Bleacher Report’s app will remain a big focus for the company. The app, which now has 9.5 million active users per month, accounts for a third of company revenue, said Mittman.

A big change will come in the spring, when Turner launches a sports streaming service. The plan is to use Bleacher Report as a front door into the service, with access available on the publisher’s site and app. It’s also speculated inside Turner that the as-yet unnamed streaming service will have Bleacher Report branding in some fashion.

And with the runaway success of House of Highlights on Instagram, Bleacher Report is also focused on building its own distinct media business with separate revenue goals for the account. House of Highlights creator Omar Raja and Bleacher Report’s vp of social Doug Bernstein are leading the effort, with oversight from a board that includes Brown, Mittman, Bleacher Report CEO Dave Finocchio and COO Alex Vargas. Bleacher Report is also putting together a team of new hires and existing staffers to support House of Highlights.

“We need to diversify and make sure we are protected,” said Brown. “Sustaining the growth of the Bleacher Report brand is important; building a business within the business at House of Highlights and how we put money toward each brand to grow them as best as they can will be important. And the app, as a potential place where it can become a home base for sports fans, and getting people to be more active and interacting with each other on it, will be a priority as well.”