Followups: The Athletic and the New News Bundle
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The Athletic isn’t disruptive, but it is either a sustaining innovation or rearranging deck chairs
by Annotote TLDR 2019.09.18
Certainly a new kind of news bundle… The Athletic is angling toward a deep-and-wide bundle, as opposed to a shallow one, like that of the… traditional newspapers it’s devouring. Nevertheless, there are three specific problems with that strategy…
First, bundle economics need not apply… Second, The Athletic’s economics are not sustainable, due to its journalists’ opportunity costs… Third, its required rate of return on venture equity is not sustainable, due to a lack of both operating leverage and economies of scale[.]
The Athletic: The Sports News Site Haters Love to Dunk on Keeps Signing Up Subscribers, but Can It Turn a Profit?
by Bloomberg Businessweek 2019.08.20
[M]ore than one person interviewed for this story made comparisons to the ill-fated National Sports Daily. The tabloid started in 1990 and spent $150 million to poach top writers before folding 18 months later…
But the Athletic doesn’t really have direct competitors. ESPN, Bleacher Report, and Yahoo Sports, each of which reaches tens of millions of users per month, rely on ads to support their free content… the consensus then was that “information wants to be free” on the internet. Publishers would have to ride on the back of social media. Bleacher Report and SB Nation, two of the most successful digital sports media startups, had built their brands by paying armies of freelancers to churn out stories designed to show up at the top of Google search results or go viral on Facebook [but The Athletic’s founders thought:] “Someone has to be in the locker room… We can’t have everyone barely paying kids to write their opinions on teams.”
They messaged hundreds of journalists on LinkedIn… Starting salaries… ranged from $55,000 to more than $120,000, depending on experience and location. For a top beat writer in a new market, the company might pay a 20% premium or more. In the early days, the site offered bonuses for bringing in subscribers. Every employee gets a small slice of equity…
Company data show that close to 60% of subscribers are what it calls super bundlers — people who follow teams from more than two cities, plus at least one college team, and at least one league as a whole… “You can’t get that bundle anywhere else,” [the cofounder and CEO] says…
The main internal metric is the number of people subscribing to read a story. A hundred or more is a “home run” [although] getting to double digits is considered a success… 40% [CTRs for stories] would be seen as good [and regarding subscriber churn] 80% of users re-up after their first year[.]
The Athletic is launching new podcasts and experimenting with free ad-supported content (kinda)
by Axios 2019.08.27
[The Athletic is] launching 40 new podcasts on Tuesday, bringing its total podcast count to around 80 podcasts. By years end, the company hopes to have around 120 podcasts in total. [They’ll] start by offering one episode a week to non-subscribers in front of the paywall and one behind. The goal is to offer people who might be less likely subscribe to The Athletic the ability to sample some of company’s content.
A small portion of the free audio will include advertising. While this is just an experiment for now… the company is likely to ramp up advertising efforts in the future…
It’s hard to market products with hard paywalls because consumers aren’t able to sample the product before committing to buying it. While The Athletic does offer free trials and sign-up discounts, this offering really goes after people who never were open to paying to begin with.
The Athletic ventures into advertising with a free daily podcast
by Bloomberg 2019.09.11
The Daily, but for sports. “‘The Lead’ will include as many as three ads in each 20-minute show[.]”
The Athletic reverses course on paywalled pods, now submitting episodes to Spotify and Apple Podcasts
by 9to5Mac 2019.10.13
[Originally, shows] were only available inside of [The Athletic’s own] app and not dedicated podcast apps like Apple Podcasts, Overcast, or Pocket Casts. In recent weeks, they’ve reversed that stance and started submitting their shows to Apple Podcasts and Spotify, but only including some of the episodes as a free download…
If it’s not in my podcast app, I am likely not to get around to listening to them. Since [The Athletic] added them to Apple Podcasts and Spotify, I now listen to them frequently. Their strategy has been to release every other episode for free on the public RSS feed…
[W]hat led to them putting podcasts on Apple Podcasts and Spotify[?] My guess is they didn’t see a significant uptick of downloads in their apps, and they now view free podcasts as a way to grow their subscriber base.
Vox Media Rolls Out New Data Marketplace as an Advertising and Monetization Solution for Publishers amidst Upcoming Privacy Regulations
by Adweek 2019.12.30
[F]ollowing the merger with New York Media… Forte will draw insights from 13 editorial brands... a suite of sites it wants to make attractive to media buyers, which it hopes will futureproof against changing cookie policies from browsers like Chrome and Firefox and the coming wave of privacy legislation…
It will be powered from data collected over three years [from] a readership of 125 million… 12,000 custom ad units and 11 billion impressions… to better predict consumer intent and behavior… Under Forte, the company will build targeting around “mindset” and “intent” instead of just individual user characteristics… Those signals could include which platforms a reader comes from, how much time they’re spending on a page and scroll depth. So if you land on Curbed, Vox’s real estate site after coming from Zillow, you might be served an ad from Coldwell Banker…
“The industry has used third-party data as a crutch that will no longer exist very soon, and it will value platforms that have that direct-to-consumer audience”…
Vox wants to shop Forte around at CES, touting the first-party data capabilities at a time when the tide is clearly rising on privacy changes. The public rollout comes just 48 hours before the implementation of CCPA, California’s stringent privacy regulation[.]
What happened to The Athletic’s WNBA vertical? It was built on the reputations of the women they hired — then fired and erased
by Still out of Your League 2020.05.13
re: “This is another argument for breaking-up the bundle, freeing-up individual writers to better price discriminate and/or find their own idiosyncratic equilibria…”
The [Athletic] may say it was to cut costs during the pandemic… But the WNBA writers were costing the company hardly any money. At least one writer told me she offered to take a temporary pay cut or continue writing for free until the season started. But what the company choosing to save some dollars in WNBA-related freelance fees does do is show exactly which coverage the publication values and which it doesn’t. It also shows which subscribers it values — many people ponied up the money to subscribe to The Athletic last season after they launched the W vertical because it was so rare to see good coverage of the league. By cutting that coverage first, they’re telling those subscribers they don’t care to keep them.
The Athletic joins Bloomberg’s subscription bundle as a free-trial perk
by Axios 2020.08.04
Bloomberg Media sees value in partnering with niche media outlets that it thinks can compliment its coverage… The bundle comes with a discount. Those who purchase the $290 annual Bloomberg.com subscription (originally $415/year) will receive a free trial to The Athletic for six months, while those who opt for the $1.99 monthly subscription (originally $34.99/month) will have three months of free access to the sports news site.
The Athletic is shifting its search for an M&A partner: Halts merger talks with Axios and shifts focus to acquisition by NYT
by The Wall Street Journal (WSJ) 2021.05.06
[I]n March… the Athletic was in merger talks with Axios. The companies jointly explored a tie-up that could involve a deal with a special-purpose acquisition company [SPAC] but those discussions haven’t moved forward…
The Athletic was valued at $475 million in its last funding round, announced in January 2020 [and] generated about $80 million in revenue in 2020... It raised $55 million in January 2020 and has significant expenses, according to people familiar with the matter, including more than 600 employees, many of them top-tier reporters recruited from other news organizations.
The Athletic is leaning into podcasts, advertising, and podcast advertising as its searches for a buyer
by Bloomberg (via Twitter) 2021.11.22
As [The Athletic] tries to sell itself… it now needs to sell ads too… Podcasts aren’t just a source of [advertising] revenue but a way to promote articles behind the paywall and persuade people to subscribe.
The Athletic agrees to be acquired by the New York Times for $550M
by NiemanLab/The Information 2022.01.06
The New York Times is buying sports subscription site The Athletic for $550 million… The Athletic had wanted more like $750 million…
The publication was forced to cut staff and pay during the early months of the coronavirus pandemic when most live sporting events were suspended, but it notched a major milestone when it hit 1 million subscribers in September 2020.
The New York Times is planning to “aggressively expand” its advertising business across its bundled products, like games and sports
by Axios 2022.08.09
Over the past 10 years, the Times has pivoted its strategy to focus on attracting more consumer revenue via subscriptions… [and in 2012 its] annual subscription revenues finally surpassed its advertising revenues... The Times has laid out a plan to reach 15 million subscribers by the end of 2027. To do that, it’s pushing more consumers to buy its bundle of subscription products, which includes core news, cooking, games and now, sports [via] The Athletic…
[NYT] now has more than 1 million subscribers for both its Games and Cooking products and more than 9 million paid subscribers total across all of its subscription offerings. While that’s a huge number compared to its competitors, it’s a tiny fraction of the 135 million people that engage with the Times’ content monthly for free via ad-supported products… Now that it’s reached a critical mass of subscribers outside of news, it sees an opportunity to build more ad products that cater to those users…
The Times was one of the first major media companies to begin phasing out all third-party tracking cookies in 2020. [Now NYT needs to figure] out how to expand the Times’ ad-targeting and optimization capabilities using the proprietary, first-party data it collects from its users.
After six ad-free years, The Athletic is now selling its first ads
by AdWeek 2022.09.13
The Athletic will feature ad formats including display, video, shopping functionality and photography, and ads will live on newsletters, the home page and the discover feed. The publisher aims to net double-digit CPMs, and Chanel will serve as its launch sponsor.
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