Info

A trade journal of a still-emerging field, written by Adam Tinworth.

Posts tagged business models

There’s a new journalism aggregator in town, called Compass – and it’s attempting to be a Netflix for news.

Compass News - the app

Isolde Walters spoke to Matilde Giglio about the subscription-based app:

It’s a bit like your Facebook timeline but instead of that girl you used to go to school with who is in the Caribbean yet again and endless dog videos, it’s all serious quality journalism. Maybe a little too serious. One criticism I would make is the selection of heavy political and economic news did make me feel like I was running through the reading list of a PPE undergrad. I’d recommend a little thoughtful fluff – I’m a big believer in fluff – to add a little glamour and human interest to the mix.

That’s a smart insight. Any product like this that only surfaces serious news will fail, because the market for serious news and only serious news is too damn small. Can you show me any major newspaper or magazine that doesn’t have a lighter element? Chances are if you can, it’s a “need” publication – trade press, scientific journals – rather than a choice publication.

A Netflix for news could work. But a Netflix for only serious news? Never.

A little context here: there have been numerous efforts to build something like this before. They’ve been described, variously, as “an iTunes for news” or a “Spotify for news“. We’re on to “Netflix for news” now. There was News International’s much-rumoured attempt to build an iTunes for news, before abandoning it and going for paywalls. There’s Blendle which is still around. There’s magazine subscription apps like Issuu.

I suspect they struggle because they’re caught between the opposing poles of loyalty to a particular news brand (through political, cultural or geographic affiliation) and the free flow of news through Facebook and Twitter. Best of luck to Compass – they’ll need it.

Talking of Medium, as we were, Matt Locke had a great idea on how Medium could bring a new but familiar business model to the journalism web:

There is another, intriguing possibility – building a business model around publishing episodic series of content. Audiences understand this model – we’ve been brought up on TV seasons for decades. But freed from the schedule, we’re now consuming episodic series in new ways, from bingeing Netflix box sets to subscribing to podcasts and returning to the cinema for the latest episode in our favourite superhero franchise.

What a good idea! Luckily Medium has Bobbie Johnson on board, who between Ghost Boat and Matter has been responsible at least two serialised product that made editorial sense. Matter, in its early days, was very much that. You essentially subscribed to a series of eBooks delivering longform science and tech journalism. It was great, and I missed it when Medium bought and absorbed it. Still, lots of opportunity here, right?

Oh, wait:

Kinda puts lie to the idea that it was mainly people in sales and support that got cut, doesn’t it?

Happily, it looks like Bobbie has something up his sleeve:

Matter didn’t matter to Ev

But what how about Matter itself? It was started as a Kickstarter several years ago, acquired by Medium, and then eventually spun off as its own content studio.

Well, this e-mail arrived during the Trump inauguration:

Medium dead

So, that’s that. Another journalism experiment launched, acquired and killed. Matter RIP. You did reader-support longform right – until you were killed.

Interesting analysis of Medium’s audience from Frederic Filloux, which I missed last month:

This is both good and bad news. On the plus side, Medium mostly addresses the tech elite. This is a premium audience, attracted by quality, more likely to pay for information; on the supply side, publishers on Medium are more likely to go for a revenue sharing coming from subscriptions, as opposed to see their beloved publication infested with toe fungus ads.

On the minus side, as opposed to Buzzfeed, for instance, Medium is not a mass/general public destination, and will never be, even if it claims 60 millions monthly unique readers. This puts a ceiling on its potential for advertising growth — anyway a broken model, according to Ev Williams.

This throws some interesting light on recent moves at Medium.

Ever since Ghost – the lightweight publishing platform – looked like it would actually happen, co-founder John O’Nolan has been talking about it facilitating journalism. And he’s been putting Ghost’s resources where his mouth is – several students of mine have had free Ghost(pro) accounts for the length of their studies, and one group ran a site on it for the (now defunct) online journalism module at City.

Ghost is taking that commitment a whole step further, as they announced today, with Ghost for Journalism:

Journalism by Ghost

We’ve created the very first Ghost Journalism Development program to find and work with three great new publications.

Our goal is to find three fantastic new publishers to work with and help them grow their audiences throughout 2017, as we build out these features (and others) explicitly around their needs. In addition, we’ll be offering up $45,000 in Ghost(Pro) credit, along with access to our internal tools, data, and technology partners.

This is basically an offer to become your hosting and technology team for a year, for free. That’s your second biggest cost – after people – out of the equation for the first year of a journalism startup. That’s huge.

Scaring up some revenue for journalism

What’s the other major problem with a journalism startup? Revenue, of course. That’s why Medium is taking a step back to explore it – and Ghost wants to work with its partners in this scheme to help figure out some useful models. And they’re willing to put development time behind it. The major next step in the platform’s development is around making money from your content.

Ghost has three priorities:

  1. Memberships: Logged-in experiences for visitors & better data for publishers
  2. Subscriptions: Content delivered directly to readers, wherever they are
  3. Payments: Integrations to allow publishers to build new revenue models

All three of these are direct revenue models that could potentially help support niche sites – and the future is niche sites, unless you have truly massive scale. I’ve been planning a switch to Ghost for a while, and this is even more of an incentive for me to just get on with it. I’ve been keen to launch a membership model for this site, providing deeper analysis for busy people in journalism, in a model not unlike that of Ben Thompson’s Stratechery – which i subscribe to and read avidly – and this has the potential to turn Ghost into a one stop shop for those sorts of business models.

Why is Ghost getting itself enmeshing in one of the biggest challenges for journalism in such a public way? I asked John, and this is what he said:

So many reasons. But really it all boils down to one core truth: No amount of features or good design for a platform matter if journalists aren’t getting paid.

Can’t argue with that.

By no means am I suggesting that we have the all in one solution to fixing that problem, but providing a platform which independent journalists can build on top of to easily take payments directly – is solid a prerequisite to anything else.

Being able to build something like TheInformation or Stratechery is something which should be widely available, easy to set up, and free from the impending fear of a VC-backed overlord shutting it down. That’s the goal 🙂

Indeed, the aim of building something new – with new revenue models – pretty much demands that you adopt a really tight approach to costs. And if what you’re selling is content – and the intelligence that underlies it – technology’s main job is to facilitate that, not to be a competitive advantage that you spend huge sums on developing. That’s a mistake we need to stop making.

The sort of journalism Ghost is looking for

If you’re interested, here’s the sorts of startups they’re looking for:

  • Local, political, social, cultural and investigative reporting
  • Scientific, economic and philosophical analysis
  • Journalism about journalism (ooo meta)
  • Memberships, subscriptions & audience engagement
  • New revenue models for journalism
  • Use of emerging tech like chatbots, data, VR & APIs

Don’t hang around though – you’ve got around a month – but it looks like people have been pretty interested in the announcement:

Once you’ve got an idea and team, applications close on February 15th.

Yesterday, the news broke that Medium has shifted direction, and is laying off some people, and bashed out a quick post. With a night’s sleep (but not a good one, thanks to my youngest…) behind me, I have a slightly more nuanced take, partly informed by some Twitter conversations this morning. Anyone in the journalism industry should probably regard this as very good news.

Why? well, on the surface, this is only good news. On one hand, Medium is walking away from the traditional, tired and possibly dried up model of content platforms past:

  • Build a platform
  • Attract creators
  • Creators attract audiences
  • Monetise the audience via ads

That’s been the model of Blogger and Twitter, Ev Williams’s previous two businesses – and pretty much every other free-to-use content platform out there, including Facebook and YouTube. Medium is explicitly rejecting that approach. It’s led us too far down the route of clickbait, to desperately woo the vast traffic numbers needed to make non-niche advertising plays work. And given that Facebook and Google are eating the vast majority of the advertising revenue out there, it really doesn’t leave much for the rest of us.

It’s nice to see a platform backing away from these quality-eroding approaches. As Marketing Land is reporting, Medium has killed its Promoted Stories feature:

Medium introduced Promoted Stories in April as a way for the platform and publishers, like The Awl, The Bold Italic and Pacific Standard, that call Medium home to make money. Advertisers would pay to have their own Medium posts placed at the bottom of those publishers’ Medium posts. Brands like Bose, SoFi and Intel were among the first to buy Medium’s ad product, but it’s unclear how Promoted Stories performed and whether the ad format could lay the foundation for a sustainable revenue stream. Based on Williams’ blog post, it seems to have laid the wrong foundation.

In essence, it has done away with the Taboola and Outbrain-style links at the ends of posts that are steadily turning even the most upmarket site on the web into a funnel to crap content. So far, so good.

A content monetization lab?

On the other hand, Medium is leaning into a new concept for content monetisations. As Nic Newman put it:

The problem, which I focused on in the previous post, is that they don’t seem to know how to do this.

I tend towards the skeptical – if only because Ev William’s two previous ventures have ended up following the ads model for monetization, be it Google ads on Blogger blogs or promoted Tweets infecting your stream. Indeed, he struggled to turn both products into viable businesses. He has a much stronger record in product innovation than business model innovation – and that latter’s what’s needed here.

However, Williams has palatable got better over the years at surrounding himself with bright people who can solve problems. The Ev Williams of 2016 is much more likely to pull this off than his decade-younger self was for Twitter. Newman again:

That’s the nub of this announcement – by shedding sales and support staff that were aligned towards a traditional business model approach, Medium is essentially doing two things:

  1. Opening up the organisation’s mind to new approaches to making money
  2. Extending its funding runway, but dropping its biggest single cost – salaries – by ⅓.

The latter of those two essentially facilitates the former. It’s going to be much harder to get investment for a platform whose entire strategy is based around a brand new monetization approach. Making the most of the money they already have will be critical in taking the time they need to figure out this new model – if they can.

Exploring platform and business innovation

This is just what we need right now – a business run by tech savvy people who are essentially experimenting with both publishing platforms – and Medium is a great one, especially compared to the abominations that pose as CMSes in many publishers – and in business models. Since Medium moved away from its role as a “platisher” – combined publisher and platform – by shedding its content assets and doubling down on being a platform, it’s not longer directly a threat, either.

We should – and I include myself in that – want this to succeed. We need more viable content business models, and a content-neutral, platform-derived one might be very useful indeed.

As I said yesterday, interesting times. But times most certainly worth watching very carefully.

Ev Williams:

I’ll start with the hard part: As of today, we are reducing our team by about one third — eliminating 50 jobs, mostly in sales, support, and other business functions. We are also changing our business model to more directly drive the mission we set out on originally.

That’s a big, big cull. Medium’s whole approach to becoming a business is clearly shifting.

The problem?

Upon further reflection, it’s clear that the broken system is ad-driven media on the internet. It simply doesn’t serve people. In fact, it’s not designed to. The vast majority of articles, videos, and other “content” we all consume on a daily basis is paid for — directly or indirectly — by corporations who are funding it in order to advance their goals. And it is measured, amplified, and rewarded based on its ability to do that. Period. As a result, we get…well, what we get. And it’s getting worse.

Seeking a business solution

Does he have a solution? No. But he clearly doesn’t want Medium to be part of that problem, so he’s chopped sales staff to reduce burn rate while the site seeks a new business model:

So, we are shifting our resources and attention to defining a new model for writers and creators to be rewarded, based on the value they’re creating for people. And toward building a transformational product for curious humans who want to get smarter about the world every day.

The buried implication here seems to be some form of method for committed readers rewarding inspiring creators – but that’s an assumption. All we can say for sure is that Medium is changing direction, seeks a new way of monetising publishing – and will be doing it with one third fewer staff – and an existing workforce who’ve just lost a bunch of colleagues, and who are keenly aware that their (admittedly well-funded) employer doesn’t have a workable business model yet.

Interesting times at Medium.

A press release landed in my in-box this morning:

Pageant Media, the business information specialist, today announces the acquisition of Hedge Fund Intelligence, a series of business information, data and workflow products – including EuroHedge and AsiaHedge – and global events, which provide a 360-degree view of the hedge fund world.

(No link – it arrived via PDF…)

I’ve worked with EuroHedge and AsiaHedge a few years ago, when I did some training for Euromoney Institutional Investor via Econsultancy, and at the time they seemed like a natural part of the wider portfolio. The fact that they – and other of the smaller titles – seems yet another manifestation of B2B brands surviving in smaller niche publishers, who target very specific sectors, while the big publishers only retain the biggest brands. That’s your choice: niche or scale. And one of them’s much easier to play than the other.

Promoted crap content

The clock may be ticking for related content ads like Taboola and Outbrain:

But now, some publishers are wondering about the effect these so-called content ads may be having on their brands and readers. This month, these ads stopped appearing on Slate. And The New Yorker, which restricted placement of such ads to its humor articles, recently removed them from its website altogether.

I thought hard about this, and I cannot remember a single time that I clicked on one of those ads and was glad I did so. The content promoted through them is almost universally shit.

If your business is dependent on revenue from them to sustain itself – it’s time to take a long hard look at its viability, because those things are rotting away your reputation.

Nobody wants to buy Twitter. It made it obvious it was up for sale – but one by one the buys dropped out. The reasons seem numerous – the trolling problem for one. But, at its core, the reluctance seems to be based around the fact that Twitter is out-of-control financially.

John Hampton has a suggestion:

The problem is if you mix this with a Salesforce.com or similar company it will be really hard to take costs out in a disciplined fashion without upsetting the culture of the home company. Instead this should be fixed (with extreme prejudice by a disinterested outsider) before it is sold again to a strategic buyer.

Or – in summary: the best bastards are from Wall Street. And this needs a Wall Street bastard.

It’s unpleasant to think about – especially as I have friends at Twitter – but perhaps what the service need is a brutal paring back of staff and focus to makes it concentrate on improving its core product, rather than odd VR plays.

I badly want Twitter to survive – and thrive – but it really needs an intervention right now.

Richard Horgan:

From north of the border, a rather interesting new revenue experiment. Canada’s largest newspaper, the Toronto Star, this week announced the launch of a new monthly in-house subscription service: Headline Coffee.

Yup, a coffee subscription service from a newspaper much like the wine clubs that many UK newspapers have. Makes good sense: coffee and headlines are just a perfect combination.

Mmm. Coffee. Aeropress time.

(My faourite UK coffee subscription of the moment is Pact Coffee, which has no newspaper links, but excellent beans. Give it a try.)