When I made the difficult decision to pause content operations here at Hipsters of the Coast back in December I was somewhat optimistic that we would be able to resume operations at some point in the first quarter of the new year. The good news on that front is that I, personally, will be returning to this Monday editorial position, to provide you all with a weekly update on the state of Hipsters as well as the general state of Magic content creation.

The not-as-good news is that full operations at Hipsters of the Coast are going to take more time. I know this is going to be disappointing news to our readers but it’s also something that I am sad to have to share with our writers, who I know are all extremely dedicated to their work and are eager to get back to producing content.

One thing I can say with certainty and clarity is that the world of content production has changed drastically as the dust settles on the post-Covid world. That’s true for a site like Hipsters of the Coast as much as it’s true for video productions like Tolarian Community College, podcasts like Limited Resources, and other digital blogs like Commander’s Herald.

For my first article in this new series, which aims to take a holistic look at the Magic content creation industry, I am going to look at the different ways in which community sites generate revenue, recent economic impacts (like Covid) which have had ripple effects among creators, and what it means for Hipsters going forwards.

Economics of a Magic Content Site

I’m going to go through this at a pretty surface level discussion and save deep-diving for future articles. Here is a rough breakdown of five different types of Magic content productions and how they generate revenue.

Wizards-Funded: This applies to any content that is paid for by Wizards of the Coast. This includes any and all content that is published on the official Magic website as well as any content created for Wizards’ official social media accounts. Weekly MTG falls into this category, as does the Drive to work podcast, for two examples. There is also a limited amount of community-generated content which is directly-funded, but this is much less common. The Ambassador program isn’t exactly direct-funding for content, and I don’t want to get too off topic by diving into the Ambassador program this week.

Secondary Market Makers: This is for any content that is paid for by a business that is either primarily a secondary market maker (Card Kingdom, TCGPlayer, Face to Face Games) or relies almost entirely on referral links for revenue (EDHRec, MTG Goldfish, MTG Top 8). These sites drive the secondary market.

Sponsored Content: Many content creators and content sites, including Hipsters of the Coast, fall into this category. These are producers who have their content directly sponsored, usually by a secondary market maker but sometimes by a game supply company (e.g. Ultimate Guard, Ultra Pro). These sites either have direct sponsorships or they use referral codes to get money back as a portion of the revenue they generated for their sponsor.

Ad-Supported Content: This is mostly reserved for the larger gaming sites like IGN, Dicebreaker, Vice, Gamer, etc. which have massive audiences of generic gaming fans and Magic is a small part of their portfolio. These sites often sell their ad space directly to companies like Wizards of the Coast. This also includes low-effort, high-ad sites, like MTG Rocks.

Direct-Funding-Based Content: Today this almost exclusively means sites with a Patreon link. Some content creators are able to produce their content relying entirely on their Patreon income. Most are not. Those who cannot usually have a secondary stream of income that is either ad-support, sponsorships, or both. Any revenue stream where the consumer is directly paying the creator, such as a subscription, or buying merchandise, is directly-funded content.

Economics of the Magic Community

Now that we’ve gone over how (at a very high level) content creators generate revenue, let’s talk about how the economy impacts that. For this discussion there are three levels to look at (yes, I like lists, no one’s forcing you to keep reading):

The Magic Secondary Market

From TCG Player/eBay all the way down to your local game shop, there is an incredibly complex and international market for the buying and selling of Magic: the Gathering singles as well as secondary sealed product.

In the dichotomy of revenues above, much of the Secondary Market Makers and Sponsored Content sites are directly involved in this business.

The Covid-19 pandemic greatly affected the Magic secondary market. If you check out www.mtgstocks.com (Secondary Market Making via TCGPlayer referrals, Ad-Support via Programmatic Ads, Direct Funding via Premium App Features) you can see the change in prices of both singles and sealed products over time.

In January, 2020, before the pandemic. The market price of a Revised Edition English Tropical Island was just under $300. In July, 2021, just 18 months later, the price had tripled to around $900. However, by January, 2023, after another 18 months, the price was back down to around $500.

When prices are stable, a business that buys and sells cards is making money on the difference between the two. The price they sell at less the price they purchased the card for. As the price climbs rapidly, as it did for 18 months between Jan 2020 and Jul 2021, there are a lot of opportunities for a company to “buy low and sell high” thus maximizing their profits.

But, on the back-swing, from Jul 2021 through Jan 2023, as the market contracts, the margin is going to shrink. When Tropical Island’s market price was $900 it would be reasonable to buy them for $600 knowing you can make $300 on each sale. However, by Christmas the card had dropped to $700 and now you’re only making $100 on each card.

Oh, and you have to pay your employees and your warehouse workers and for shipping and delivery and insurance and your other operational costs like your electric bill and your water bill and by the way all of those costs skyrocketed during the pandemic.

Between Jan 2023 and Jul 2023 the market remained relatively stable but the damage had been done. Companies that had expanded during the pandemic boom were now stuck with inventory they were selling at a lower profit margin as well as having to look at the fact that the volumes they had ramped up their staff to sustain just didn’t exist.

A lot of 2023 Fiscal Year reports looked a lot worse than 2022 Fiscal Year reports and what happened as a result at the end of 2023 was a large number of these secondary market sites (such as Card Kingdom) ending their content sponsorships with sites (such as Hipsters of the Coast).

The Magic Consumer Market

Wizards of the Coast’s success and failure also, to a certain extent, can impact the revenues of content creators. There’s of course, the obvious fact that if Wizards doesn’t produce an enjoyable Magic experience then people are going to be less inclined to buy cards, either direct from Wizards (or a distributor or local store) and less inclined to buy packs.

And, while Wizards does sponsor some content directly, this mostly affects the volumes at which the secondary market is able to operate. Looking back to the price curve for Tropical Island, you can see that as prices came down, if interest in the game was also waning, then there would be more opportunities for secondary market makers to be stuck selling products for less money than they need in order to turn a profit.

This double-whammy of the prices contracting as well as interest in the game contracting can be seen in content discussions around burnout. A quick Google search for “magic the gathering burnout” returns numerous links for the spell from Alliances but it also reveals multiple articles from mid-to-late 2023 highlighting the burnout that many players were feeling with the constant release of new products.

As a note, some of that burnout was attributable to Covid, both for forcing people indoors to play more Magic, but then through shipping and production delays forcing multiple product releases to end up stacked on top of each other (in the middle-to-late 2023 timeframe).

The American Retail Market

Last, but certainly not least, is the health of the overall US retail market, which has been incredibly volatile over the past few years. From shipping issues to labor organization and from uncontrollable inflation to rising borrowing costs, the retail industry has been slammed. Business after business shuttered its doors permanently due to the ongoing issues. A look at eBay’s stock price over the past five years gives a good indication of what the retail market has been through (looks a lot like the price curve for Tropical Island).

All of this affected not only the secondary market sites that sponsored a large amount of content but also Wizards of the Coast’s ability to sponsor content directly. General ad partnerships would also be impacted as well as the ability to sell subscriptions and merchandise straight to your readers as they are also feeling the pain of the economic woes.

Economics of Hipsters of the Coast

So where does Hipsters of the Coast fall in all this and more importantly what does it mean for bringing content back to the site?

Traditionally, Hipsters has been funded through a sponsorship with Card Kingdom that included both ad sales and referral links. As the secondary market issues continued to mount last year (not only for Card Kingdom but for the entire industry as well as the US retail space) the decision was made to end that sponsorship.

Option One: Find a new sponsor!

Easier said than done for sure. Most of the usual suspects have been pulling their sponsorships. That isn’t too surprising since, as we’ve highlighted already, the issues aren’t isolated to a single business, they’re systemic and they’re affecting not just the gaming industry. Sponsorships will still be part of the equation, but the incoming funds will not likely be on the same scale as previously.

Option Two: Find a new revenue stream!

This is essentially the option we’re going with, but let me reword it just a bit.

Option Two: Use ALL the revenue streams!

There we go. Not all content is created equally and not all readers (/listeners/watchers) are created equally, so why should all content be monetized the same way? The short answer here is that, at least in the past, it was just easier and less work. But going forwards, and to create sustainable content, that will have to change.

I won’t go into too many details today, because much of that remains to be worked out, but I would expect to see Hipsters move away from volatile funding sources like secondary market sponsors and move towards more stable funding sources like direct sales to our readers, listeners, and viewers through subscriptions, premium features, and merchandise, to name a few options.

Some of the things I can share with you are that we’re looking into more video and podcast content as well as more on-site interactive content for our readers.

I’ll be in Chicago myself later this month for my first Magic Con (my first convention of any type) since before the pandemic. If you’re also there I’d love to meet fans (I’ll have stickers to give out) and also I’d love to talk to other content creators about what you’re going through right now with your content, what’s working and what’s challenging, and how things have changed since the pandemic and (I know this is a run-on sentence) what you’re most looking forward to in 2024.

Stay tuned to this space next week and every Monday as I talk more about the state of content creation in the Magic community and start planning for my trip to Chicago… in February… Wait, who picked this venue? Brr …

Rich Stein (He/Him) is the CEO of Hipsters of the Coast. He has been playing Magic since 1994 and has been covering Magic from both an editorial and journalistic perspective since 2012. He has two young children and enjoys spending his time with them. His hobbies include ice hockey, music, and Warhammer.

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