The Equity crew this week chewed through a trio of media stories, each dealing with private companies and their successes. The Wall Street Journal recently reported that Axios was growing rapidly and near profitability. The paper also broke news that Morning Brew might exit to Business Insider for a hefty $75 million potential payout. Meanwhile, we covered the news that The Juggernaut raised $2 million for its paywalled publication focused on South Asian news.
The conversation, as a result, was a fairly indulgent and nerdy affair. It’s always fun to celebrate other journalists finding success in different ways, and this week felt like a moment for the media news landscape. Because the topic is so near to our hearts, for better or worse, we’re fitting our broader thoughts into this post about the future of media.
Our own Natasha Mascarenhas writes about how inequity in media and who gets to succeed, Danny Crichton has some pretty strong feelings about digital advertising and Alex Wilhelm writes about how the varied methods of recent media success are themselves heartening.
So this weekend let’s pause for a minute to ruminate on the upstart media world, a place where too often private capital and media economics have had a falling out.
Natasha Mascarenhas
This week, it was announced that advertising might not be a bad idea after all. Axios is reportedly expected to become profitable this year, and Morning Brew, a free newsletter about business insights, could get acquired for between $50 million to $75 million by Business Insider. Both of these media companies make money off of newsletters. And if you end the story there, it’s clear that news isn’t simply a fundamental aspect of our democracy — it makes money, too.
But, the story shouldn’t end there.
In fact, my favorite media news story of the week was The Juggernaut, a South Asian-focused news outlet run by Snigdha Sur, raising $2 million in financing. No, it’s not as accessible as Morning Brew and Axios because it makes money off of paywalls. But, it is run by a woman of color who spent months in Bombay, before joining the media, reporting on Bollywood. The Juggernaut’s success in raising funds, and landing thousands of subscribers, signals that the success isn’t simply reserved for writers who likely don’t have the ability to raise $1 million through family and friends.
Joshua Rivera, a reporter at The Verge, made a good point about how the paid newsletter route only works for a “certain kind of writer” that is afforded the opportunity of a platform, and thus, a following. My interpretation of that descriptor is a white, male writer, but I will not put words in his mouth. Delia Cai, who writes Deez Links, seems to agree. In her latest post, she asks “So why isn’t The Skimm getting snatched up, too?”
So how do we get better? It’s more complicated than funding more Juggernauts and pushing The Skimm to some sort of exit line. Attempts are being made. Casey Newton, who left The Verge to start The Platformer, said that he’s working with Substack to create a mentorship program to help writers and bring diversity to the newsletter industry. It will be a positive thing for the industry, but it’s not lost on me that some underrepresented writers aren’t in need of a mentor, but instead, a paid opportunity.
And that’s the perspective I want to offer this week. We saw three big potential media wins and got notes on the future. I’ll celebrate all, but I’ll stay for the one that marks a future of perhaps more inclusion.
Danny Crichton
Advertising is an insidious cancer. It shanghais vital engineering and product resources away from making media products better for end users (what reader has ever said out loud, “gee, what fantastic placement of this flashing monstrosity of a display advertisement in front of me”). Advertising warps the incentives of writers, who are coerced into writing screeching headlines to drive Le Trafic. And then of course there is the Orwellian surveillance apparatus of modern internet advertising, which makes the Soviet Union’s secret police look like elementary school kids playing spy.
(And yes I know that ads pay a portion of my paycheck. That’s why we placed this conversation on Extra Crunch).
Thankfully, this cancer is being annihilated on so many fronts. Users are installing adblock tools and Pi-holes like never before. Apple is leading a vanguard action against third-party cookies and ad tracking more generally, and while it delayed its implementation last month, the future has already been written here. Meanwhile, Congress and other global legislatures and regulatory bodies are finally investigating the largest ad networks (aka Google and Facebook) and are increasingly likely to take some sort of enforcement action to break up their oligopoly on digital advertising.
Demolishing the personalized ad model for media is the only way we can move forward as an industry. What the news this week shows is that we already have the next wave of models ready to go, sitting right in front of us. What do those models look like? In short, much more engaging, high value, quality products targeting thoughtful audiences.
Axios and The Morning Brew are proving that it’s possible to build a revenue beast around free newsletters. By building deep niches across their sundry products, they are able to offer a highly targeted audience for advertisers without the crazy levels of tracking required to make advertising work economically in today’s world. Their newsletters are high density for content, and often only have one or two ad slots in an otherwise information-rich format. It’s a model where quality begets quality.
With Substacks and other paid newsletters, we are finally seeing media companies build their own audiences, engage them, and … gasp … ask them to pay for what they are consuming. And it works! These newsletters do tend to work best for areas of pecuniary interest like startup news and analysis or deep passionate interest like anime or woodcrafting, but it’s a model that can make a sustainable living for smaller teams targeting narrower niches.
The Juggernaut is an interesting hybrid, mixing a free newsletter with a paid membership for additional content and angles. It’s a smart choice, since its community-building efforts are a key reason why South Asians and others read the site in the first place. Directly supporting journalism that covers your interests and identities is only just getting started, and also represents a dramatic improvement over the personalized ad world of the past.
Finally, you have the future of the events business. Unlike newsletters and subscriptions, this one is more open-ended as we learn how to build compelling digital experiences. But take it from us here at TechCrunch: there is huge demand to connect with people interested in the same subjects in synchronicity. People want to build relationships and learn more about their industries, hobbies, interests and more. Media brands will increasingly fill in the gap of the kinds of community clubs that used to dot towns across America.
The resources being invested in these business models have traditionally been snatched by personalized ad products that have tried to squeeze one more drop of blood out of those CPMs all in a bid to avoid asking readers to pay, or being content with straight-up display advertising without personalization. But what the world is showing the media industry today is that you don’t need personalization and privacy-killing ad networks to make a buck. There’s money to be made building great products — just as there always has been in Silicon Valley.
Alex Wilhelm
What struck me reading the recent news about Axios (great revenue growth, and scale), Morning Brew (an insurgent email player growing well and finding an exit), and The Juggernaut (new capital for a paid model) was the diversity of the plays.
Axios is newsletter-heavy, yes, but it’s also a paywall-free website that I often use to consume its writing. Morning Brew is a pure-play newsletter business. And The Juggernaut is a traditional publication, albeit one with a paywall. And they are all excelling! That’s great!
It’s far too easy to look at the media world of today and simply say, it’s all going this way. It’s not, as we can see from our recent Venn-diagram of news items.
Looking a bit more broadly, we can see more encouraging signs of business model diversity in the media world. Just to pick some examples, the well-known Substack has seen publications minor and major excel on its platform. And quite loudly and recently, a group of former Splinter authors took their new publication from Substack to a new website built by Lede, which is a combination of the Alley agency and the subscription service Pico (more on Pico here).
Competition for new pubs among different business models? Sign me up.
Sure, everyone wants to become the next Ben Thompson and run their own micro-media empire that nets them millions. I also want to be seven feet tall and be able to dunk while tutoring minor gods in astral projection. So what. Outliers do not make for good examples.
Luckily we’re seeing more moderate-to-strong success across models and platforms for new, varied media entities.
That makes me excited. Yes, Natasha is right that the winners’ circle needs to become more diverse. And, yes, Danny is right that one particular ad format is dying. But their arguments do not imply that success will remain overly white, or that one ad varietal dying off means that advertising is kaput.
I see more positive than negative in today’s market, and in 2020, optimism is hard to come by — so I am clinging to mine in this case.
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