Atmosphere CEO Blake Sabatinelli has had a pretty unconventional path in the media industry, which he credits to “taking a road less traveled.”
“I was writing code when I was in my early twenties and ended up in the media industry really on accident when I got my first job as a producer for a local television station,” the software programmer-turned-media executive told TheWrap for this week’s Office With a View.
He continued, “Taking a risk and taking a road that was significantly different than I had been on before led me to have my first CEO job when I was 33 and gave me the experiences that I needed to understand how to run a growth company, how to manage people at scale, how to deal with boards, how to deal with investors and has really ultimately been, what has allowed me to get to the place that I have today.”
After coding for a while, Sabatinelli moved into local television, where he learned the importance of communication between managers and their employees.
“I was elevated to an executive producer role when I was in local TV and I’d never really had a team before. So I had four people put under me and I went through my first review process and I gave a review to someone who’s a good friend of mine that was a shock to him,” Sabatinelli recalled.
“[I] learned very quickly the importance of communicating clearly and concisely with your employees on a daily basis,” he continued. “You quickly learn the lesson of just how painful it can be to people if you don’t give them direct feedback and directional feedback as necessary.”
He went on to work at E.W. Scripps’ Newsy for a total of six years, serving as the network’s general manager and later chief executive officer, before joining Atmosphere — a streaming service for TVs in businesses like restaurants, bars and doctor’s waiting rooms, a.k.a. out-of-home viewing — as its chief operating officer in 2021. He stepped into the CEO role in January.
While Sabatinelli believes that anyone looking to advance in their career needs to work hard, he argues that it’s just as important to step up when opportunities present themselves.
“Raising your hand and clearly communicating that you’re looking for new challenges, that you’re looking for the next opportunity, that you want to take on another project, that you want to expand your purview is just so critical,” he said. “A lot of your supervisors are managing multiple people, multiple teams, doing a litany of things at any given time and they don’t necessarily know that you’re looking to advance. So raise your hand and be communicative about your desire to take on a broader scope within your role.”
Read on for more insight into Sabatinelli’s thoughts on the media industry and Atmosphere’s plans in 2023 and beyond.
Is there a common industry problem right now that you feel needs to be solved?
We sit in an interesting spot in the television ecosystem: a place-based television space where we cater to the 15% to 20% of view time that happens off someone’s couch. But that doesn’t really change the issue that we’re having that’s very similar to what we have with in-home [viewing], and that’s measurement.
Measurement for us remains imperfect and measurement for in-home television remains imperfect and I don’t know what the long-term solution is. I do think on-glass attribution is an interesting and thoughtful way to start going about it, but I do know that panel-based measurement as we see it today across the broad scope of the ecosystem isn’t sufficient for the increasingly sophisticated media buyer.
You see the Video Advertising Bureau very aggressively taking this on, a group of brands like NBC and others taking on more aggressive testing, but we as an industry are all going to have to find a single measurement standard that we can pin ourselves to. The solution is not 26 different standards. If that’s the case, people are just going to stick with what they’ve been doing for the past 50 years.
Why did you join Atmosphere and what are you hoping to accomplish as CEO?
I feel like Atmosphere is in the same place and time in this industry right now that connected TV was back in 2015 where you were starting to see explosive growth in audiences and an opportunity to really build a significant scale and get out ahead of everyone else. That’s borne out pretty well for us.
Over the past two years, we’ve gone from about 8,000 venues to 50,000 venues, growing our audience from about 8 million people up to over 60 million people. For me, it was about leaning into a totally undisrupted space and making sure that we can go after television budgets as audience erosion continues to happen and lack of scale continues to bear out on the connected TV side.
Other than being viewed outside of one’s home, what differentiates Atmosphere from other streamers?
The differentiator for us is all because we’re audio-optional. So if you go and watch Atmosphere at any bar, restaurant, doctor’s office, anywhere else that we’re at, you’ll find content that’s made for your eye and not for your ear, which is the antithesis of what television traditionally is.
We’re really trying to build something that’s bespoke for the environment they’re in that can improve the atmosphere — which is a good pun — that any location has. We’re going in the opposite direction of everyone else, but we do feel like we’re skating where the puck is going instead of getting into an arms race on content. So it’s worked out well for us.
How much is Atmosphere valued at after its latest $65 million funding round and what will the proceeds be used for?
The pre-money valuation is $1 billion and use of the proceeds is really going to be continued acceleration of our business.
Over the last couple of quarters, we’ve really proven out that our business is repeatable and scalable. So that means that we are confident we can build and we’ve built a sales engine that can deliver an extra four to five thousand venues a month and we built an ad sales engine that can go capture ad dollars. So we’ve staffed up those teams even further. We’re accelerating those efforts and continue to go out to take share, to build our business and our scale.
Are you concerned about growing competition in the AVOD space?
We see increased visibility on the connected TV ecosystem is a good thing and we’re comfortable sitting in any budget. While an ad-supported AVOD player or hybrid players like Netflix are going to be going after a connected TV or brand budgets and your broadcast bets are still going after a linear budgets, we are happy being anywhere because we’re really in the audience bucket. So when you have an audience of our size and scale and of our demographic composition — 80% of our audience is 18 to 49 — it’s all about focusing on visiting that connected TV and out of home buyer and letting them decide where we fit.
Because we know that a large majority of these platforms are sub-scale and the fact that they’re sub-scale and there’s significant erosion of linear ratings at this point, marketers need somewhere to buy ratings points and eyeballs and we’ve built a huge net to allow those marketers to come in and place buys with us.
What are your thoughts on consolidation in the streaming industry?
No one needs 50 streaming services. Consolidation is bound to happen but how that consolidation bears out, I have absolutely no idea. I do know, as a consumer that subscribes to like 12 streaming services at this point in time, I’d sure like it to be four. And then it’ll start resembling more of what we used to pay for, which was just a traditional cable bundle. So it’ll all come full circle.
I’m a big believer that the future of television is free. Pay TV was in this insane kind of time and place in television and while I do believe traditional pay television will live long term, it’ll really be catered towards sports fans and the number of subscribers that we’ll see there will be significantly less than what we saw at true peak TV. And then the rest of it will likely end up being either your four to six different pay services, SVOD platforms and a significant number of free TV platforms, whether it’s over the air, via connected television or via a platform like ours.
What are Atmosphere’s plans for 2023 and beyond? Would you be open to an IPO or an acquisition or merger?
We’ve built a business that’s given us the optionality to do a number of different things. What that ends up being over the course of the next couple of years, it’s to be decided. But what we do know is we’ve built a business that reaches a large number of the U.S. adult population today and is growing on a rapid basis, and that’s something that can’t be said for the rest of the media industry.
This interview has been edited for length and clarity.
