Weekly Briefing: Friday, December 15
Happy Friday! And welcome to Business Side’s Weekly Briefing.
In today’s edition:
Top developments including James Bennet’s piece, Future plc’s new strategy, and turmoil at The Arena Group.
Benchmarks on Punchbowl, The Messenger, and the NYT.
Viewpoints from operators at Defector, the FT, and 1440.
Plus more news from across the media industry.
Let’s get to it.
If this email was forwarded to you, subscribe to get the latest media intel in your inbox every Friday.
James Bennet’s piece. The article chronicles the events around the Tom Cotton editorial that led to Bennet’s resignation from the New York Times in 2020. Bennet, with whom I worked when he was editor and co-president of The Atlantic, issues a sharp critique of the Times and Publisher A.G. Sulzberger, arguing that the newsroom is prioritizing progressive values at the expense of independent journalism & open-minded debate. It’s worth reading the full piece, and here I’ll focus on the business model considerations underlying the conversation:
Bennet’s critique: “The Times’s problem has metastasised from liberal bias to illiberal bias, from an inclination to favour one side of the national debate to an impulse to shut debate down altogether.”
The pull of a subscription-first business model: “As the number of subscribers ballooned, the marketing department tracked their expectations, and came to a nuanced conclusion. More than 95% of Times subscribers described themselves as Democrats or independents, and a vast majority of them believed the Times was also liberal. A similar majority applauded that bias; it had become ‘a selling point’, reported one internal marketing memo,” Bennet writes.
Sulzberger responded, saying: “James Bennet and I have always agreed on the importance of independent journalism, the challenges it faces in today’s more polarized world, and the mission of The Times to pursue independence even when the path of less resistance might be to give into partisan passions. But I could not disagree more strongly with the false narrative he has constructed about The Times. Our commitment to independence is evident in our report every day.”
My thought: Subscription-first business models do incentivize catering to a particular tribe, leading publishers to double down on narrower, passionate audiences. This contrasts with ad-centric models since advertisers aim to be unoffensive – which rewards simply reporting the facts. Many publishers that are transitioning between business models will end up facing a tension like the one we’re seeing at the Times. Surely, many publishers will end up appealing to the “tribe” looking to hear different perspectives – we’ll see the degree to which the Times is among them.
Future’s U.S. Push. Future plc – whose brands include Tom’s Guide, SmartBrief, and Space.com – is planning an expansion in the United States. After organic revenue fell 10% YoY according to full-year results released last week, CEO Jon Steinberg unveiled a new strategy with several pillars:
Tiering brands: The company has separated its brands into three categories – Hero brands, which will receive the most investment; Halo brands, which add scale to the hero brands; and Cash Generators, which will receive less attention.
U.S. digital advertising: “The US digital advertising market is seven times the size of the UK market. Yet, as it stands today, our US digital revenue is only twice the size of our UK revenue. In the UK our well-established team is able to drive a higher value mix of advertising revenue through a greater share of direct sales, premium programmatic advertising and branded content. We are putting in place the actions to replicate the UK expertise in the U.S.”
Social monetization: “Our brands reach 217m users on social platforms. We aim to generate greater revenues from these audiences through branded content and evolving our eCommerce proposition.”
My thought: Narrowing the strategic focus to a handful of brands makes a lot of sense. Right now, Future plc is stretched thin with brands across many verticals, including B2B, music, technology, sports, and more. With so many different target audiences and advertiser categories, it’s hard for synergies to meaningfully accrue.
Turmoil at The Arena Group. Manoj Bhargava, who bought a majority stake in the company earlier this year, fired CEO Ross Levinsohn, after also firing the COO, media president, and corporate counsel last week.
The Sport Illustrated AI debacle: This follows the incident where Sports Illustrated, which is published by The Arena Group, featured articles apparently written by AI.
A long all-hands: Bhargava held a meandering all-hands, where he told employees to “stop doing dumb stuff.”
But even before the AI article incident, Bhargava was critical: “Media has gotten nuts… Nobody's working with their customer and they're so enamored of the technology, delivery systems…”
Bhargava’s motivation: Bhargava said that he acquired a majority stake in part to promote his various other products, and he wants to integrate advertisers more deeply into programming.
Valued at over $100 million in its deal to acquire Electo Analytics, a software product that tracks legislation.
Plans to charge more than $1,000 for a new subscription tier that includes data from Electo Analytics.
Expects to increase the price of its existing membership from $300 to $350.
Generated $20 million in revenue this year and is profitable. (NYT)
The Messenger had 77 million pageviews in November, according to Google Analytics.
The median salary for New York Times reporters and correspondents is $161,000.
The political ad market in 2024 is expected to be 31% larger than in 2020.
The news industry cut 2,681 jobs so far this year, up from 1,808 in all of 2022 and 1,511 in all of 2021, according to a new report.
Netflix released a report showing engagement metrics for individual shows.
X is expected to generate $2.5 billion in advertising revenue this year, down from $4.7 billion in its last four quarters as a public company.
Kelsey McKinney and Aleksander Chan, co-owners of Defector and Discourse Blog respectively, wrote an entertaining piece about running their writer-owned collectives. Here’s what they say about us business folks:
“After watching a ton of dreary men in gingham shirts and khakis destroy the companies you love, it is easy to believe that businesspeople don’t do anything and aren’t helpful. This idea has a lot of potential, until you begin asking your fellow writers and editors if they know how to look up how much they have in their 401(k), or even if they know how to navigate a spreadsheet… One option is to try and persuade someone who knows anything about money (fundraising, tax codes, business shit) to join your janky pirate ship full-time. This may work, but it may not. It is worth a shot, because one businessperson is worth 82 bloggers. Do not tell them this. They will get a big head.”
The New York Times on the appointment of Zach Seward as Editorial Director of AI Initiatives.
“One reason we’re excited to have Zach in this role is that he shares our firm belief that Times journalism will always be reported, written and edited by our expert journalists. But Zach will also help guide how these new tools can assist our journalists in their work, and help us broaden our reach and expand our report.”
1440 EIC Andrew Steigerwald on audience growth:
“Audience growth is a knife fight. Every single day. Having a fantastic product that people love is table stakes for success. Even with a world-class product, you’re not competing against other people in your industry — you’re competing against your potential reader’s daily habits. Behavior change and breaking into daily habits is incredibly difficult — but once you’re in, you’re in.”
FT head of newsletters & executive editor Sarah Ebner on launching a newsletter:
“I have two pieces of advice that I would share with anyone thinking of launching a newsletter. One is that it’s an ongoing process. People get really excited about something shiny and new, making sure it looks right and that there are good comms around its launch. But that’s only the beginning. You have to put in the work regularly, however busy you are, to make your newsletter a success. You can’t stop because you’re bored or have too many other things to do.”
NewsGuard CEI Gordon Crovitz predicting that gen-AI will get better at facts.
“My prediction is that 2024 will be the year when the generative AI models begin to stop confabulating, hallucinating, or, as journalists put it more bluntly, stop making things up… Microsoft has a license to NewsGuard’s reliability ratings of news sources and our Misinformation Fingerprints catalog of the most significant false claims in the news. As a result, prompts on topics in the news on Microsoft Copilot often cite high-quality news sources.”
Colossus CEO Matt Reustle on the challenges of building a podcast business:
“It’s really hard to build a successful podcast. The discoverability is terrible. There’s not really algorithms that you can hack and that to me is actually great because it means if you do make it, you have a very sticky audience and it’s a barrier to entry.”
Center for Public Integrity CEO Paul Cheung predicting consolidation among news nonprofits:
“Despite the maturation in journalistic practices, the business side of nonprofit journalism remains underdeveloped. The over-reliance on philanthropy, which is not a panacea for financial sustainability, continues to pose challenges. Many nonprofit news organizations struggle with limited resources, hindering their ability to employ full-time staff dedicated to essential business functions such as marketing, product development, technology integration, human resources, finance, accounting, and revenue generation. This resource constraint perpetuates a reliance on fractional services that, due to their divided attention across multiple clients, are unable to prioritize the unique needs of individual organizations.”
Mother Jones and the Center for Investigative Reporting, also known as Reveal, will merge.
Altice USA is considering a sale of Cheddar News to private equity firm Regent.
Redbird IMI, Jeff Zucker’s investment firm, is in talks to acquire film production studio All3Media in a deal worth around £1 billion.
Schibsted is looking to take its news business private and separate it from its other businesses.
Decrypt, a 22-person crypto media site, will merge with the 12-person Rug Radio.
WTWH Media acquired Engineering.com.
Axios is using AI for images in its social media marketing.
Financial site Investing.com is using AI to rewrite stories of competitors.
Two open letters on Substack, signed by Substack writers, lay out opposite sides of the argument on whether the platform should restrict certain content, in the wake of the Atlantic piece highlighting Nazi content on Substack.
The MailOnline will put a small set of articles behind a paywall.
The Boston Globe launched a new vertical on the racial wealth gap.
Tucker Carlson is launching a $6-per-month streaming service.
WaPo released its Spotify-style, year-in-review feature for readers.
The Skimm laid off 10% of staff.
Jacob Donnelly is stepping down from his role as publisher of Morning Brew to focus on his media trade publication, A Media Operator.
The BBC appointed Charl Bassil as chief brand officer.
Tiny News Collective hired Amy L. Kovac-Ashley as executive director and announced new funding from a number of foundations.
Report for America opened applications for new reporting positions.
Fox News promoted five executives into new roles.
Project Veritas CEO Hannah Giles is stepping down, saying she encountered past illegality.
Dotdash Meredith is aiming to build big event franchises around its core brands.
A former WaPo staffer reported that WaPo is ending local columns.
The Nation will publish a print magazine monthly, instead of every other week.
BBC India staffers quit and formed their own company to comply with rules around foreign direct investment.
Thanks for being a part of Business Side’s public beta. Have a great day!
Was this forwarded to you? Subscribe here.