I got a fair amount of pushback from small publishers after I declared that “if you’re not getting 20–30 million unique visitors every month, and don’t aspire to such heights, then you’re basically an economic irrelevance”. Rafat Ali and Ben Thompson led the charge. (That’s Thompson’s image, above, from his post “Publishers and the Smiling Curve”.) Here’s the IM conversation I had with Thompson after my article appeared.

Ben Thompson: My basic thesis is that the Internet generally works in favor of the very large and the very small.

Felix Salmon: I agree with you on the very-large end of the spectrum.
But my feeling is that the shift from desktop to mobile is bad for both the medium-sized and the small.
Because the value of the inbound link is going to steadily deteriorate, in a world where people spend much less time following links and much more time just staying within apps.

BT: In my opinion you’re making one big mistake: looking at things as a percentage, instead of in absolutes
Mobile has been hugely additive
There is more time available to do lots of things on line
While it has replaced the desktop to an extent, it has mostly filled in all of the other spaces in our life

FS: OK I think that’s where we have a real disagreement

BT: Well, that’s a numbers thing
There’s lots of data on where people are spending time

FS: Certainly you and I still spend a huge amount of time clicking links on our computers
But a whole new generation is growing up which doesn’t use computers and web browsers nearly as much.
Just like they don’t use email.

BT: Sure, but that doesn’t mean they read less
People read more today than ever

FS: Correct. They read just as much. But they like to read in-app, because the mobile web sucks.
What I’m saying is that once upon a time, you could build a following if lots of people linked to you.
And while that’s still the case, I don’t think it’ll last much longer.

BT: Lots of people link to me through social media
Far, far more than ever linked me in a blog

FS: But publishers are all in the middle of an artificial Facebook boom: when people talk about social media traffic, what they really mean is Facebook traffic.
And Facebook understands that on phones, the experience of following links and ending up at some random site is a crappy one. So they’re going to give people fewer links, and they’re going to concentrate on keeping their users in-app, because that’s how to best serve their users.

BT: That’s where we’re in agreement
Smallish sized publishers are doomed
Where I disagree with you is the possibilities for micro scale things

FS: If you’re small, you’re better off just adopting someone else’s platform than you are trying to get links from Facebook
Facebook and Medium and Twitter are all competing with each other to be the place where individuals and small publishers publish their content.
Twitter has been mindblowingly good at getting all the smartest and most famous people in the world to publish on its platform, without paying any of them anything

BT: I honestly think we’re 98% in agreement here
For undifferentiated authors and content, that’s the future, and it’s a fairly ugly one, to be honest
However, there is a good side of the internet for writers
1. Costs can be kept very low
2. Distribution is free
3. The addressable market is infinite
Point 3 is the most important
Because the addressable market is so huge, there are a massive number of niches
Niches that can support highly differentiated writers in that niche

FS: And of course you’re Exhibit A in terms of someone who’s managing to support himself in a profitable niche

BT: Right
But the wide number of niches means that small operations are very viable
What isn’t viable are non-focused publications competing on a page view basis
Unless you are very big
Having a huge staff like TNR with travel budgets and all that is a losing enterprise

FS: In what way are you better off now than you would have been 10 or even 15 years ago?

BT: 1. Costs. Doesn’t cost me anything to do what I do
2. Open Source. Almost everything I need is widely avaialble
3. Infrastructure. Stripe manages all the payment stuff for me. I didn’t need to roll my own
4. Distribution. Twitter is an unbelievable tool for me
5. Audience. Far more people online and online more per person (thanks to mobile)

FS: Right. Even 5 years ago, much of that didn’t exist, and people like you gravitated to places like Seeking Alpha to find their audience

BT: There were far fewer people online for far fewer hours with far fewer ways to reach them and far fewer ways to monetize them 10 years ago

FS: But ultimately I think that you’re in the newsletter business, which is an age-old business model

BT: Yes, I am in a lot of ways
But the big difference is that the Internet allows for far more narrow niches
I had 386 Twitter followers when I started Stratechery in March, 2013
Today I have 1,500 people paying me $10/month
That wasn’t possible before

FS: Interestingly there’s a company which is basically a collection of newsletters
It’s called TheStreet.com
And while it has good cashflow, it hasn’t seen its business grow in recent years

BT: I’m familiar with them

FS: Do you think they’re missing the boat somewhere?
Should they be able to ride the same wave that you’ve found?

BT: It’s all a question of differentiation. It’s hard to do.
That’s why I think this model is all about individuals
People subscribe to people

FS: Right. I think that when people like you and Rafat push back against what I’m saying, you’re in a way doing yourselves a disservice. There will always be exceptional individuals who do exceptional things. And in Rafat’s case, this isn’t even the first exceptional thing that he’s done. But I’m hesitant to extrapolate from exceptions.

BT: I get what you’re saying, and I’ve thought about it a lot
But at the same time, the fact remains that I would not be doing what I do under the old order

FS: It seems to me that the number of star individual voices who gained traction in say 2001–2004 is significantly greater than the number of star individual voices who gained traction in 2011–2014.

BT: I disagree
I think that’s maybe the case in tech and politics
Because blogs were emerging, and that’s always the case with an emerging tech
So you got your Ezras, your Matthew Yglesias, your Grubers, etc

FS: Not to mention your Arringtons, Sullivans, etc

BT: However, when you look at other mediums and other parts of culture, there has been an explosion
YouTube fashion folks, or Snapchat, or Vine
There has been an explosion of individual voices

FS: That’s a very good point. BUT… they’re all on someone else’s platform! So, it’s kinda my point, too!

BT: haha, that’s a fair point
Interestingly, they’re making far more money than the bloggers ever did

FS: The Instagram stars make crazy money, in often dubiously ethical ways
And especially Pinterest

BT: Yep
Same with the youtube folks

FS: The whole idea of journalistic ethics hasn’t really filtered down to these people, partly because they’re not journalists

BT: One other thing
I do feel like I’m on the edge of the wave, if that wave does indeed exist
I can program a little bit, so I could put stratechery together myself
But the tools are improving so rapidly
Particularly stripe. That was a total game changer

FS: Of course the one thing that doesn’t scale is YOU

BT: On the revenue side, I can scale indefinitely
There’s no real difference between having 1,000 or 10,000 customers

FS: But on the Feeding The Blog Every Day side…

BT: On the content side, I can’t
I have a job that requires I write something regularly

FS: Stratechery is young, it can go for many more years
But I had that job for 8 years and then eventually I had to say “enough”

BT: Right, but that doesn’t make the model a bad one, just perhaps not a permanent one
I have no illusions about building a lasting company here
It’s very much a “lifestyle” business if you will
But it’s one that is on track to pay very well, and leave me in an excellent position for whatever is next

FS: Shh don’t say that! First you need to sell Stratechery to TheStreet for a few million bucks… THEN you can quit!

BT: lol
In all seriousness, I’ve given thought about where I go in the long run.
I thought there was both a hole in the market and a business model that would work, and it turned out there was

FS: But still, Email Is Not The Web
And I still maintain that the web is dying
Web publishing, as a business, is something only for the very big and well capitalized
Rather than using a website basically as an ad for something else
Like a newsletter or a consulting service

BT: No, I think you can make it as an individual with ads
Native, highly targeted ads, not display
Gruber again is the best example, but there are others

FS: There must be like two advertisers who support all of them
It’s like podcasting. The really hard bit is finding the sponsors

BT: I think that, once you dig, there turn out to be a lot of little, under the radar success stories
People who keep costs low, do everything themselves, and build up a niche following
They don’t really register in the big picture
But they are very viable and very valuable to the people who follow them
Buzzfeed and Vox etc are making a play for the big brand advertisers
Their dream customer is P&G
They’re not even playing the same game
The problem is the people in the middle
They don’t have the scale or product to attract the big players
So they’re basically competing with yahoo on undifferentiated page views
Which has an inevitable price of zero
But, for now anyway, I’m fighting against declarations that the web is dead and that individuals don’t have a chance ☺

Here’s what I think: the world is gray and there are very few hard and fast rules
The truth is a lot of the publishers that we’re talking about aren’t really relevant to anyone — they’re dying for a reason
But the big thing about the Internet is that it makes possible business models that weren’t even thinkable before, just because marginal costs are zero
I think there are two ways going forward: essential, and scale
Scale gets you traffic from all kinds of sources, especially social
Essential gets you direct traffic, which is more valuable to niche advertisers (or to yourself if you have a subscription business)

FS: I suspect that insofar as individual nanopublishing is going to be a Thing going forwards, it’s going to be on Vine and Instagram and Pinterest and YouTube, rather than on the web, or even on podcasts.
But I genuinely admire your noble fight! And I also genuinely hope that you’re right. I don’t want the web to die!

Felix Salmon is a senior editor at Fusion

Bull Market

A collection of finance and business writing by @alexisgoldstein, @delong, @dsquareddigest, @DuncanWeldon, @felixsalmon, @jamesykwak, @Mark__Buchanan, @WhelanKarl

felix salmon

Written by

Felix Salmon was a senior editor at Fusion

Bull Market

A collection of finance and business writing by @alexisgoldstein, @delong, @dsquareddigest, @DuncanWeldon, @felixsalmon, @jamesykwak, @Mark__Buchanan, @WhelanKarl

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