![]() Moreover, the advertising business, at least according to New York Times CEO Meredith Kopit Levien, is compelling precisely because it’s attached to a subscription business from a Stratechery Interview: New York Times: I shouldn’t have been so quick in that 2015 Article to dismiss the New York Times: last year the company had $2.3 billion in revenue $1.6 billion from subscriptions, and $523 million from advertising (the rest was from “Other”, including licensing, affiliate referrals, live events, etc.). Three companies have helped convince me that “both” is the best business model for content businesses. I think my position today is more of an evolution than a refutation, because I do still think it is essential for an content entity to understand if it is in the niche or scale game the refutation is twofold: first, everything is a niche, and second, nearly all content businesses should have both subscriptions and advertising. However, unless you’re the New York Times (and even then it’s questionable), trying to do everything is a recipe for failing at everything these two strategies require different revenue models, different journalistic focuses, and even different presentation styles. The truth is most publications are trying to do a little bit of everything: gain more revenue per user here, reach more users over there. Scale businesses make money by maximizing the number of users they reach.Niche businesses make money by maximizing revenue per user on a (relatively) small user base.First and foremost that means publishers need to answer the most fundamental question required of any enterprise: are they a niche or scale business? In fact, publishers going forward need to have the exact opposite attitude from publishers in the past: instead of focusing on journalism and getting the business model for free, publishers need to start with a sustainable business model and focus on journalism that works hand-in-hand with the business model they have chosen. The problem, though, was the assumption that advertising money would always be there, resulting in a “build it and they will come” mentality that focused almost exclusively on content production and far too little on sustainable business models. It is easy to feel sorry for publishers: before the Internet most were swimming in money, and for the first few years online it looked like online publications with lower costs of production would be profitable as well. This is, of course, a return to form for content production it’s also both an evolution and refutation of a point I argued in 2015’s Popping the Publishing Bubble: The question going forward should not be advertising or subscriptions the answer, in meme form: The Athletic had a happier ending, even if there are arguments that the New York Times overpaid, given that the sports publication had never made a profit it’s also the case that neither BuzzFeed News nor The Athletic were running the proper business model for content on the Internet. Today in 2023 BuzzFeed has shuttered its News team and The Athletic has been acquired by the New York Times the latter’s top priority was adding advertising.īuzzFeed’s bet on news was a bet on Facebook and Google’s willingness to subsidize free news, a bet that didn’t pay off. In 2017 BuzzFeed CEO Jonah Peretti declared that “if you’re thinking about an electorate and you’re thinking about the public and you’re thinking about people being informed, the subscription model in media does not help inform the broad public” in 2017 The Athletic CEO Alex Mather went in the opposite direction, telling me in a Stratechery Interview that his publication would be differentiated by “less clickbait, no ads, no game recaps, no hot takes, really focusing in on the deeper stories, the insider stuff, the minutiae for the really diehard fan.”
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