The Mogul of Black Celebrity News: 'Now Is When Your Competition Is At Its Weakest'
MediaTakeOut's founder Fred Mwangaguhunga talks about running the leading Black celebrity gossip site in the era of Black Lives Matter, and why now is the time for media disruption.
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"If you read the hieroglyphs on the pyramids, I'm sure you'd see someone talking about who the Pharaoh was sleeping with."
On the business of gossip, Fred Mwangaguhunga likes to take the long view. In the vast landscape of the internet, his pyramid is Black celebrity news site MediaTakeOut. The hieroglyphs he's carving into it sound something like this: "Twitter Claims Cardi "CAUGHT' Offset In A Gay Relationship!" "Megan Thee Stallion Accused Of "Beating' And "Pointing Gun' At Ex-Boyfriend!!" "Odell Beckham Jr Laughs At Poop Rumors: That Was The Funniest Sh*t!!" MediaTakeOut claims to "reach 92 percent of African Americans with access to the internet" to the tune of 30 million unique views a month. And while the storylines are ever-shifting, like sand blowing over yesterday's dunes, the product Fred's selling is as enduring as dirt itself.
"It's a human thing," he says. "People have always been interested in gossip, and they always will be. Black people are just like everybody else out here. The question isn't how you change that. The question is how you best fulfill that innate need in all of humanity."
It's an existential question, and Mwangaguhunga, 44, has had a lot of time to think lately. When we spoke over the phone in August, the media mogul was at his summer home in the Hamptons, where he's been with his wife and their 9-year-old triplets since March. "Going from the hustle and bustle of New York City to, you know, small sleepy Southampton, has been an incredible lifestyle switch," he says. "'I've probably had more family time in the last six months than I had my entire life. Breakfast, lunch and dinner, sitting around a table with family. It's weird, I didn't know how I would feel about it. But I love it."
"Why can't we have a place where we only say wonderful things about Black people?"
Poolside Zoom meetings and midday family beach strolls may be miles from the Mwangaguhungas' old life in Manhattan, but they are zipcodes away from the drama that plays out on MediaTakeOut. Since the site was founded in 2006, it's often been referred to as the "Black TMZ," accused of everything from fanciful distortions and full-on fabrications to peddling damaging depictions of Black culture. A couple recent headlines read: "Atlanta's most GHETTO School District Sent This Message To All Parents! (WOW)" and, "Wealthy Black Man's Funeral Turns RATCHET: Wife & Sister Start Fist Fighting!!"
But Mwangaguhunga takes it all in stride. "There are people who say, "Hey, look, there's all this negative stuff about Black people in the world. Why can't we have a place where we only say wonderful things about Black people?' I think those people are coming from a good place. They want to try and help Black people. But the market demand is there, so if you don't allow a Black company to exist in this space, another company will come in, and now you've guaranteed that African American gossip will be told by a non-African American company. If there are going to be entertainment news sites, you want there to be African American news sites so they can give a different perspective."
Mwangaguhunga speaks with the measured equilibrium of the corporate lawyer he once was. Tall and reedy with a closely shaved head and gold wire frame glasses, he cuts a cool silhouette against MTO's fire engine red headlines. "My life is extremely calm and very different from the celebrities we cover," he says, not like it's a judgment, exactly, but like it's a good thing.
Mwangaguhunga grew up in Queens, a child of Ugandan immigrants. He went to John Jay College and then to Columbia Law School before working on Wall Street for three years. But he was bored practicing tax law, so he quit to start a luxury laundry service with his wife Notoya, who is also a lawyer.
The couple met over 20 years ago, walking down the street in Brooklyn, when she was 18 and he was 19. They did long distance throughout college, and got married after they'd both finished law school. Fred says that throughout his entrepreneurial journey, Notoya has been his most valued thought partner.
"I don't make any major decisions about the business without consulting her," he says. "We make a good team because I tend to be more focused on executing, whereas she thinks more about the broader idea. The execution part sometimes guides whether I think ideas are good or not, but a lot of times you need someone who is willing to think completely free of whether or not this thing can be done and just think: This is what I want done. That's how she is."
Fred and Notoya sold the laundry service after three years, in 2006. But in the course of advertising, he spent a good bit of time surfing then-nascent celebrity blogs, realizing there was a gap in the market for Black gossip. The main tabloids didn't buy many of the paparazzi's pictures of Black celebrities, so they were willing to sell them at half price. Fred initially modeled MediaTakeOut after the Drudge Report, updating the site once a day. It took off.
"Maybe 10 years ago it seemed like a mistake, because all our competitors were doing the opposite."
Of course, in the years since 2006, a lot has changed about the way celebrity news is covered. With the rise of social media, much of the drama and access to celebrities' private lives shifted online, and the pandemic has only accelerated that trend. But Mwangaguhunga doesn't think it fundamentally changes the nature of gossip coverage.
"I mean, obviously for three months, the entire country was on lock down," he says. "So there weren't many paparazzi pictures to see. But similar drama was still happening, it was just happening on Twitter or Instagram. So instead of reporting on paparazzi footage, you're reporting on a Twitter battle between two people. You still have a primary source that's putting out this information into the world, and that isn't exclusive to anyone, but you need entertainment journalists to pull it together and provide context for what's going on."
It's no surprise that when everyone went into quarantine in March, MTO's traffic numbers spiked. But bored people stuck at home isn't the only reason MTO has stayed profitable while many other media outlets have plunged into the red with advertising losses. Most traditional media companies use a direct ad-sales model — where a media company sells to particular brands, cutting out middleman costs — but MTO got in early on exchange ads, or Real-time bidding (RTB). In RTB, the media company sets the floor price for ads, like a company would set their stock price on the market, and a range of companies across industries bid for inventory — with demand determining the ultimate sale price.
"We went all in on that," Mwangaguhunga says. "And maybe 10 years ago it seemed like a mistake because all of our competitors were doing the opposite. But now when you look at the digital advertising market, it's almost all RTB or exchange-business ads. So because we made that transition early, we were able to build out a media company that could survive on that model."
Plus, he adds, in March, direct ad sales dropped to zero. Airline advertising, travel, leisure and hospitality, that's something like 30 or 40 percent of the market — gone. If you were counting on that $1 million spend by Carnival Cruise, that's not coming in this year. But luckily, we weren't relying on specific advertisers so we could make it up in other areas."
"I think a lot of these unwritten rules of racism are being lifted slowly."
Mwangaguhunga feels that the winds of change are blowing in MTO's favor culturally, too. MediaTakeOut has often been referred to as an "urban" site — "urban" being a euphemism for "Black." For most of MTO's history, advertisers and other publications treated the site's coverage and readership as an issue to be skirted around. But that's changing.
"When people called it an "urban' site, they just didn't want to say Black," Mwangaguhunga says. "Because if you said you were a Black media company, you would pay a penalty. Advertisers would pay you less, so it was a total marketing ploy. But we've dropped a lot of that stuff now because from a philosophical standpoint, it doesn't make a lot of sense to us. You still see people talk about being "urban,' but especially after June with people recognizing the Black Lives Matter Movement, I think a lot of these unwritten rules of racism are being lifted slowly. It's hard to tell right now because everything is still so fresh, but I suspect that while it may have been a bad thing to be running a Black media company in March of 2020, it's not so bad in September of 2020."
In interviews over the years, Mwangaguhunga has always maintained that what MTO covers is determined purely by what his audience wants to read. "We figured out pretty early on that people — and this is true across race, across class, across everything — are just more interested in entertainment news than any other news," he says.
But recently, the drama of the world outside entertainment news has gotten noisy enough that it's taking up more space in the MTO coverage equation. Mixed in with headlines like, "Pop Star Lizzo Loses 50 lbs By Going VEGAN!! (She's Now 'Skinny Thick')" and, "Boosie Badazz To Kanye: Why Can't You Keep Drake Out Ya Mouth?!" there's, "Trump's 'Patriotic Education' Executive Order Compared To Hitler Youth" and, "Attorney General William Barr Compares COVID-19 Quarantine To Slavery."
"There was a time in June when we were reporting very little celebrity news and gossip, and the majority of our content was surrounding the Black Lives Matter movement," Mwangaguhunga says. "You have an audience that comes to you to read about entertainment news, but you can offer them something else, and a lot of times they'll accept it. When you're seeing something major like Black Lives Matter, I think you have an obligation to report on it in the most accurate and fair way that you can. But accurate and fair, particularly coming from an African American media company, might look a lot different than accurate and fair with a traditional media company."
The key phrase in that statement is "coming from an African American media company," which has always been MediaTakeOut's selling point, even if in past times, it made the selling harder. The site offers a Black perspective on Black celebrity drama, which mainstream, mostly white tabloids haven't traditionally bothered to cover. If gossip is a human thing, it's also a way of seeing people.
That might be a lofty take on a site running stories like "1st Pics Of Iggy Azalea & Playboi Carti Baby - Twitter Says Child 'Looks White'!!" But Mwangaguhunga likes to take the long view, and not just when looking backwards. As fun as it is to envision breaking news on the Pharaoh's sidepiece, he's more focused on the future. He believes this is an era ripe for disruption in every industry — especially media — and he won't mourn the way things used to be done too much.
"I think this is one of the best times in history to get into entrepreneurship and start something new," he says. "The world is changing dramatically, and a lot of paradigms that were set in stone two years ago are going to be completely disrupted. All of these traditional big media companies are struggling. And yet, as I've shown with our business model, there are ways to run a profitable media company in this space. So I think if you're going to go into it, now is the time. When your competition is at their weakest."