Pretty Much Everything I Know About the News Business


Last month, venture capitalist Marc Andreessen posted what, in his view, was the future of the news business. Reactions were varied, but everyone had one. I joked that my entire Twitter stream was people replying to Andreessen as he has very publicly thrown himself into the future of news conversation.

We need new voices in this discussion like Andreessen, but his post was too… nice. I’d bet he left his more candid insights out. After the post, I found myself wishing someone would share more actionable observations from the industry.

So, here’s my take. Each one of these could be their own essay. Please argue with me.

Audience

Respect your audience: The first function of any news site is to respect its audience, to treat it as an equal partner. We should never publish anything we wouldn’t feel comfortable sharing with friends. We should never publish any “hot takes” just meant to get a rise out of people just for the sake of it.

Pageview grabs like lists, pagenation, and slideshows work in the short-term. However, the long-term trend is toward quality over quantity and authenticity over sensationalization. Audiences eventually wise up and know when you see them as a “1" in the pageview column of your stat sheet. Then they move on. There’s a reason ViralNova is for sale.

Have a point of view: but make it smart. News is a commodity. Cut through it and tell me what I need to know. Offer me fresh views and opinions that I didn’t consider. You know your niche or vertical better than anybody else. You are aware of context, historical connections, and can see the larger picture for your audience, who just drops in every now and then. Share these insights. Nick Denton spoke to this in his recent interview with Playboy:

Whenever you work at a newspaper, particularly a newspaper with high standards, you’re struck by the gap between the story that appears in the paper the next day and what the journalist who wrote that story will tell you about it after deadline. The version they tell over a drink is much more interesting—legally riskier, sometimes more trivial, and sometimes it fits less neatly into the institution’s narrative. Usually it’s a lot truer.

Remember, no one ever got excited about hanging out with this guy.

Own a niche: The best revenue models and most interesting content come from publications that carve out a niche. In his post, Andreessen writes:

The market size is dramatically expanding—many more people consume news now vs. 10 or 20 years ago. Many more still will consume news in the next 10 to 20 years. Volume is being driven up, and that is a big, big deal.

If more people are reading news, there are more communities to be built, more niches to reach. You won’t beat the tech news site on the latest gadget release. You wont beat ESPN on sports. Carve out your piece of the national (or local) discourse and do it better than anybody else.

News is marketing: Building a community is the primary function of editorial. Except in very few circumstances, the news/content isn’t independently profitable. It’s meant to gather an audience to then do something. The “something” depends on your revenue model (see below).

Understand stock and flow: One of the smartest things ever written about content was the “Stock and Flow” essay by Robin Sloan. In short you need a mix of “Flow” stuff meant for social and “Stock” still meant to last (think Atlantic Wire vs The Atlantic). Which brings me to…

Master all reader states: Think of your day: You’re on the subway. Then you’re at your desk. Then you’re killing time before a meeting. Then you’re sitting back at home. At each of these moments you desire a different length and tone of content. Your job as member of the media is to meet your reader in as many of these places as possible. Hook your reader at somewhere along this scale and move them up the chain. Start with a tweet and maybe they eventually attend a conference. I wrote more about this concept in my post last year: The Universe.

Evergreen content: It is much easier to build a business on service journalism and evergreen content. The longer the shelf life of your content, the easier your life will be. It will also give you a traffic and revenue foundation to build on day after day rather than starting from scratch every day with news content. Chartbeat CEO Tony Haile agrees with this approach in his recent article in TIME:

Editors might say that as long as those topics are generating clicks, they are doing their job, but that’s if the only value we see in content is the traffic, any traffic, that lands on that page. Editors who think like that are missing the long game. Research across the Chartbeat network has shown that if you can hold a visitor’s attention for just three minutes they are twice as likely to return than if you only hold them for one minute.

If you can keep a small staff, keep a small staff: Narrow niches don’t need huge staffs. The margins work on the business side better as well with a small team of reporters covering one subject. Even larger non-traditional sites like Gawker and Vox split their publications into subjects rather than have one mega site. Traditional media like the Boston Globe are catching on as well. In his excellent series on content economics, Felix Salmon shares the logistics behind growing a huge staff:

If you look at the media world as a snapshot, instead of a single site over time, it turns out that editorial costs rise steadily as sites get bigger and more professional. They rise in absolute terms, of course. But they also rise in per-editorial-employee terms, and they tend to rise even in terms of editorial costs per pageview.

Email: Building a solid base of email subscribers is more valuable than building a Twitter following.

Facebook: Building up a Facebook fan page is a waste of time. You are at the total mercy of Facebook. Making sure your content spreads on Facebook, however, is not.

SEO: Your “stock” should be optimized for SEO, as its meant to be useful for a long time. Your “flow” should be primed for social.

Revenue

Custom Content: As best I can tell, the “agency” model is the best way forward for news sites. Buzzfeed, Vox Media, The Atlantic, Vice, and Gawker all have in-house agency arm that creates content for their advertisers. It’s often glossed over in “future of news” discussions, but the most profitable and fastest growing sites are creating content for advertisers, sometimes using the same staff as the normal editorial content. This gets messy:

Advertising: In his post, Andreessen saves his harshest words for advertising on news site:

There is no excuse for crappy network-served teeth whitening come-ons and one weird trick ads served against high quality content. Disastrous.

The problem here is not the ads themselves. It’s the model. If sites could wave a magic wand and get high-quality, well-paying ads, they would. But the economics are against them. Inventory is increasing, effectiveness is decreasing. That’s a race that every single publisher is going to lose. But you know that.

Another oft-overlooked problem with the ad model: you have to start form scratch every time a campaign is up. You have to sell that sponsor again. Most sites can make the economics of content work with a small staff. But it’s a waste of time and mental capacity to have those small staff members chasing ad deals. There are higher margin items to tackle. The only time I’ve seen this work is if you have a deep penetration within your niche and products that touch multiple reader states you can typically charge a high premium that may make this worth your while. In other words: ads are a throw-in to some larger deal, and never the deal itself.

Data/exclusive content: Give away the horse-race, day-to-day stuff for free, up-sell on deeper analytics, research, and reports. The strategy has been pulled off expertly by Skift, GigaOm and ArsTechnica. Jury is still out on Business insider (I hope someone proves me wrong, but I think there’s a reason Business Insider only made $2k of profit on $4.8 million (!) in revenue in 2011 and hasn’t disclosed financial data since, not even in this 2013 “all access” presentation AND it has been looking feverishly for a buyer with allegedly $20 million in revenue. Update: maybe I am wrong.)

Resource building : Build a rock-solid well of reference-able evergreen content and then use affiliate links or subscription revenue. Executed masterfully by Wirecutter. It looks like Vox.com will dabble with this model, though I suspect they will sell premium advertising.

Syndication: Create content that larger players would kill for. Football Outsiders does this with ESPN. This is the way forward for writers who can become “brands” like Nate Silver. This is one of the hardest revenue models to pull off and is often more the result of luck.

Events: If your editorial is building a community, you should allow that community to get together. National publications often have huge yearly conferences. Local publications can do lots of meetups and smaller events.

Events make money on ticket sales, sponsorships, and other event integrations. The event model has been increasingly popular which has flooded the market a bit with subpar events. I’ve personally seen a rise of events where the organizers took the path of least resistance with lots of boring panels, and some unabashedly sell speaking slots. The good news? As more players enter the event space, a high-quality event can stand out.

Philanthropy: Some publications want to rid themselves of the pressures of revenue all together and focus on receiving grants and donations. In my experience, chasing donations and grants is far more time-consuming than running a for-profit business. Additionally, foundations typically have specific demands as to the use of the money they give you. Then, your publication is serving two masters: the readers and the grant-giver.


The above is based on my limited experience, but hopefully spurs conversation as to where I’m wrong and what I left out.