At a time when most digital publishers are scrambling to amp up the quantity of content to meet ad goals, The Information is taking a different approach: It is producing just two stories a day — focused on issues like valuations for private tech companies and what’s next for Facebook — and charging $399 a year in order to read them.
The two-year-old Silicon Valley news site, founded by former Wall Street Journal reporter Jessica Lessin, now counts what she says are “thousands” of subscribers for its in-depth coverage. Lessin’s bet is many of the assumptions around “scale” in media — in particular the need to rely on advertising and do whatever is needed to expand audience size — are wrong.
“The big idea is to reach lots of people,” she said on this week’s episode of the Digiday Podcast. “We’re just going about it a different way.”
Below are highlights, lightly edited for clarity, from the discussion with Lessin:
“The business model around news is broken”
The spate of venture capital funding in news operations caused some, such as Business Insider CEO Henry Blodget, to declare a “golden age” of journalism. Lessin is a dissenter. She sees an environment in which news organizations are forced by their ad-dependent business models to focus on the wrong things.
“The business model for news is broken,” Lessin said. “We are overwhelmed by this race for traffic and pageviews over focusing on delivering value to an audience. We need to have the right formulas for delivering the next great generation of publications.”
Scale is a red herring
The knock on a subscription site like The Information is it won’t scale. It’s focused on tech and media decision-makers, not a consumer audience, and its $399 price point in a sea of free alternatives means its fate is to be a boutique publication with a decidedly small reach, the argument goes.
“It baffles me,” Lessin said. The Information model “totally scales — and it gives us control over how it scales. What doesn’t scale is high-priced events businesses, where you have to sell these huge one-off deals to be profitable that month. What doesn’t scale is crossing your fingers and hoping you’ll get a big ad deal. What does scale is having a product that people are willing to pay for.”
The secret advantage of a subscription media model: focus
There isn’t one correct media model. Publishers like BuzzFeed and Business Insider are amassing large audiences that can be monetized, for the most part, through advertising. But that business model means the content must follow: It has to be mass. The risk, Lessin said, is an eventual sameness, the perpetual regurgitation of the same viral sensation of the moment. Relying on subscribers means forced focus. The Information’s eight-person edit team, for example, publishes just two stories a day, as opposed to hundreds at many publishers.
“If you look at what a given publication publishes on a given day, a fraction of that is original,” she said. “Even publishers doing incredible original work, more than half — and some days 80 percent — is not original. We want everything we write to be bringing a lot of new information to the table.”
Facebook doesn’t care about publishers’ business models
The weight of the media world has moved inexorably west to Palo Alto, home to Facebook. The Onion captured the current publishing climate well in a piece last May about publishing executives making pilgrimages to Facebook to offer content at the feet of Mark Zuckerberg. Lessin, who has covered Facebook for several years, believes publishers often miss an essential reality: Facebook doesn’t care about their businesses. It just wants ways to get people to stay on its platform, whether that’s gaming or news articles.
“Facebook doesn’t care about the media world, and the media world thinks it does,” she said. “They care about content their users find engaging and valuable. Media is part of that.”
Digiday DealBook: Walmart’s new advertisement deals, Twitch’s change to streamer revenue, Equal Entertainment Acquiring Pride Media, and more
Walmart's new advertisement deals, Twitch's change to streamer revenue, Equal Entertainment Acquiring Pride Media, and more in this week's Digiday DealBook.
Media ERGs foster community among hybrid workforces
Managers at media firms are intent on fostering company culture and connection among their hybrid employees. ERGs are proving to be a valuable channel for achieving those goals.
Member ExclusiveMedia Buying Briefing: From Cannes Lions, wrestling with measurement, fraud and the ‘multiverse’
Ask 10 media buyers their most important issues at Cannes Lions, you’ll get 11 different answers. The one consistent theme expressed: happiness at being able to get together again in person to share ideas, visions, deals and frustrations.
SponsoredFor brands, first-party data is unlocking the cookieless ecosystem
Bill Masterson, President, Publishers Clearing House A dominant factor guiding the industry has been that cookies and mobile app IDs are vanishing and will be replaced by some mixture of new and emergent identity solutions. As a result, the market is alive with new and exciting alternatives to replace the third-party browser cookie and mobile […]
‘The juice is not always worth the squeeze’: Publishers evaluate cost-per-click pricing models in their commerce businesses
Vice Media Group and Hunker see an opportunity for CPC pricing, but Wirecutter doesn't think it's worth the effort.
Why rent-to-own brand Aaron’s tapped Mr. T to enhance brand awareness
Rent-to-own retailer Aaron's is looking to boost brand awareness through bilingual TV spots as well as out-of-home and print ads -- all with a little help from Mr. T.