Alloy Digital is rapidly growing its young male demographic on YouTube and across the Internet. The company recently acquired Durham, NC-based The Escapist, which is a leading independent video game site.
Alexander Macris, The Escapist’s co-founder and senior vice president/general manager, talks about the site’s growth potential and explains what this acquisition means in this exclusive interview.
Touted as the “mouthpiece for the gaming generation,” The Escapist generates 50 million page views a month and is home to the extremely popular “Zero Punctuation” video review series.
How have you seen The Escapist grow from when it first launched when it comes to size of your staff?
The Escapist has grown from a founding staff of 5 to a team of 20 today. When you add in the pool of content creators we work with worldwide, of course, the number of contributors to The Escapist numbers in the hundreds.
Were there any hurdles in running a game industry site from the Triangle?
Absolutely. Virtually all of our competitors are based on the West Coast, as are many of the game companies we need to work with. The literally continental divide sometimes makes it hard to build the personal relationships necessary to succeed in the tight-knit gaming industry. That said, there have been considerable advantages. Our cost structure has always been much lower. Our churn is lower. We have been able to maintain a greater degree of editorial independence because we aren’t subject to as much groupthink.
What do you think differentiates The Escapist from other sites?
Our editorial focus. At The Escapist, our focus has always been on gaming as an ongoing lifestyle, rather than the traditional view of gaming as a cycle of consuming new products. Layered on to that is a focus on quality. We were, for many years, the only online gaming publication that had a full-time copy editor and fact checker working on our stories.
How have you seen the Triangle embrace gaming over the years?
When I co-founded Triangle Game Initiative in 2007, the local business community was barely aware of the fact that the Triangle had a video game industry at all. At my first networking event, the senator I was speaking to about gaming thought I worked for an Indian casino. Five years later, video gaming is considered one of the most important and creative sectors of the Triangle economy. East Coast Game Conference in Raleigh is now on its fifth year, and Escapist Expo in Durham on its second. Along the way the gaming industry in the Triangle received tremendous support from some very visionary leaders, including former Governor Perdue and Michael Goodman at Capital Broadcasting.
How did you end up getting acquired by Alloy Digital?
In 2012 we decided we needed to find a strategic buyer. It was driven by fundamental business factors: Today’s advertisers want to be able to reach their target consumer at every touch point – not just a website, but on YouTube, Facebook, on their mobile device, at live events, and so on – and we needed to be part of a large platform that could offer that. We looked at several possible strategic partners, and Alloy Digital was clearly the company whose strategy and vision made the most sense.
Why are they interested in video games?
Alloy Digital’s strategy is to be the go-to destination for the 12-34 year old audience. Video games are a crucial part of the 12-34 year old lifestyle. (Not coincidentally, Alloy’s latest YouTube channel, SMOSH Games, is one of the fastest growing in YouTube’s history.) I like to say that video games are to today’s youth what rock-n-roll was to the 1970s youth, the definitive media of their generation. That’s why Alloy is increasing their video game content efforts, to tap into that zeitgeist.
What role did your original video programming play in this deal?
Between SMOSH (YouTube’s #1 most subscribed channel!), and multiple successful spin-offs, Clevver Media’s 7 entertainment channels, and the benefit of its in-house studio Generate, Alloy Digital has invested heavily in original video programming. The fact that The Escapist was heavily video-focused was definitely a plus in getting the deal done.
How large an audience does The Escapist have when it comes to the site and the video reach?
We have 1.1 million monthly unique visitors to the website, according to ComScore, and 500,000 monthly unique viewers on our YouTube channel. YouTube usage is growing at double digits per month right now, and is up 240% year over year.
Why did you choose the American Tobacco Campus for your new home?
When ATC opened the American Underground, we had an opportunity to become an anchor tenant and join the vibrant entrepreneurial scene in Durham. It’s been excellent. Also, they allowed us to hang a 20-foot-long Imperial Star Destroyer from the ceiling. How do you refuse a landlord like that?
What impact has the acquisition by Alloy had on your company?
Alloy’s approach when it acquires a business is to let them keep succeeding. The main difference is that we now have an immense reservoir of knowledge and skills to draw on in areas where we previously were less expert, such as YouTube. That’s been a huge gain. We also of course benefit from the ability to cross-promote The Escapist across their media channels, and vice versa. The power of media scales with the size of the network.
What are your goals moving forward in growing The Escapist?
A few years back, magazine companies like Conde Nast faced a tough challenge: They had to shed the idea that they were magazine companies at all, and migrate their content to the web. Today, website companies face a similar challenge: We have to shed the idea that we are website companies, and migrate our content to every platform where viewers may be. My goal for The Escapist is to successfully negotiate that transition, growing us from being primarily a website to being a content property that exists in every channel and medium.
What does your success in the Triangle say about the potential here for gaming beyond developers like Epic and Insomniac?
I think it proves that you don’t need to move to a high cost center like San Francisco or New York just to be in gaming. I’m a huge fan of the Triangle. It has a very educated workforce, and demands a low cost of living but offers a high standard of living. It’s one of those fortuitously placed locales where both skiing and the beach are a day trip. The climate is as nice as it can get while still being four seasons. What’s not to love?
