A Media Operator is a media company for those building digital media companies.

The Creator to Publication Pipeline

There’s a lot of doom and gloom in media these days, what with the rise of generative AI and the demise of the 3rd-party cookie. But I’ll be honest… I’m feeling pretty excited about the future. It’s going to be different and probably harder, but I can’t help feeling like people are always going to need great content. And if that’s the case, the future’s looking fine. And the topic of today’s newsletter is just another example of that.

The secret to growing a publication is figuring out how you can convert all of that flyby traffic into a loyal audience that wants to stick around. But how do you that?

Deliver personalized content recommendations based on first-party data.

BlueConic has a great guide that digs into how publishers can use personalized content to get users flowing through the site, seeing more ads, and hopefully, signing up for a subscription. In the guide, there are three effective strategies to increase reader engagement.

If you want to learn more, download the guide today.

Casey Newton’s Platformer turned three years old last week. In 2020, Newton left The Verge to go independent, building “a tiny media company dedicated to covering social networks and their relationships with the world.” He started out on his own, but a lot has changed in those three years.

But what I’m interested in is what’s going to continue to change. There are a couple of big things I see happening at Platformer that I suspect will happen at other creator newsletters over the coming years, which is the creator to publication pipeline. I don’t mean creators shutting down their newsletters and getting jobs again. Instead, I look at it as the evolution of a creator business to an actual publication. Platformer has done that.

Newton had already hired a managing editor, and in the three year anniversary piece, he announced that he had brought on another person in a part-time role—which I suspect will evolve into a full-time role as time goes on. And he’s planning on hiring another reporter at some point this year. We’ve got a team forming. The creator economy is starting to look like the media industry if you ask me.

Another thing that’s changing? Platformer is becoming a diversified business. According to Newton:

Over the next year, Platformer is going to experiment with putting ads in the newsletter. Platformer was designed so that most people never have to pay us in order to benefit from our journalism. But at the moment, around 95 percent of our audience falls into this category. And while the generosity of our paid readers has allowed us to grow revenue well beyond my expectations, the limits of the subscription model mean that at our current rate we would likely never be able to bring on another journalist.

Let’s do some math. Newton says that he has 155,355 total subscribers in the database. If only 5% of the audience pay, that would be 7,767. His subscription is $100/year or $10/month. That’s at minimum a run rate of $777,000 in subscription revenue. It’s a healthy business and has doubled year-over-year, but it’s still a sub-$1 million business.

And so, to unlock additional resources, Platformer is doing what every good media business does. It’s diversifying. This is the right thing to do. I don’t know the audience makeup of Platformer, but I suspect that there is money there. And if there is, advertisers are going to follow. Let’s do some basic math. 200,000 subscribers by end of year, 50% open rate, and a $40 CPM (which could be low depending on the audience). If it sells out, that’s over $200,000. That’s growing the business by 25% just because of ads.

I recognize that many independents are afraid to take advertising dollars; especially those that drank the kool-aid on Substack. But the platform is dogmatically opposed to advertising for no reason. They’ll say you’re not serving your audience because of the ads. That’s garbage. A newsletter subscriber won’t stay engaged if you stop delivering great content, so you have to serve your audience, even with ads. I would argue that giving content away to 95% of your audience completely un-monetized is just bad business.

It’s exciting to see this evolution of Platformer. The creator to publication pipeline is the natural next step for a lot of these creators. And those that recognize that they can bring on people and that they need to be diversified will be the ones that not only survive, but thrive. The future of media is going to be thousands of these smaller publications. This is why I am so confident about the future.

On October 9th, former NYT CEO, Mark Thompson, steps into a big role as the CEO of CNN. And there’s going to be a ton for him to figure out. CNBC has done a full breakdown of where Thompson is going to spend his energy when he starts, but I think this one paragraph is worth exploring:

One idea being discussed is to build several subscription products on specific topics within CNN.com, which would remain without a paywall, said the people. For customers who want all access, CNN could offer a bundle for a discount. Paying a monthly fee could unlock on-demand or live CNN programming on certain subjects, give users access to particular pieces of in-depth or focused journalism and provide other benefits.

Rather than creating one super CNN subscription, it seems that the goal is to instead create a number of niche subscriptions, with the option to bundle them together and get access to everything.

This makes sense for a number of reasons.

First, it’s easier to focus your messaging and investment when there is a clear understanding of who the customer should be. A broad, generalist subscription, which CNN would have to support with its scale, is just not all that compelling in 2023. They’d be going up against other generalist subscription products. As I’ve said numerous times, The New York Times has already won there.

Second, people also want to only pay for the content they care about. Forcing a user to pay a higher subscription for everything when they might only one want one feature or type of content is going to add friction to the subscription.

Third, it gives bundle flexibility. A single subscription might cost $5 a month. There might be four products, which would total $20 a month. But CNN could charge $15 for all four. There’s a perceived savings here. This is the exact strategy that The New York Times has been doing with its core news product, games, cooking, and The Athletic. If it can increase ARPU, it wins and that’s exactly what I would expect CNN to do as well.

So, what does this look like for other media companies?

This strategy is what I would have hoped Business Insider would do when it launched its subscription (disclosure: Insider and Morning Brew are both owned by Axel Springer). Rather than trying to create a single super subscription, I suspect it would have been much stronger if it rolled out vertical subscriptions. For example, it has an Advertising section. Why not turn that into its own subscription and have it go head-to-head with Adweek? By going with a broad subscription offering, it’s messaging could never zero in on exactly what its niche audiences cared about.

Suffice it to say, subscription businesses are hard. As Platformer shows, only 5% of the audience is willing to pay. And that team is running a niche publication. For CNN, it’s going to be much lower. So, the tighter the offering can get, the stronger its chances will be. Niche wins every single time.

Thanks for reading today’s AMO. If you have thoughts, hit reply and tell me. Are you exploring bundled subscription products? Are you a creator that’s looking to grow? I’d love to hear from you.

A couple of quick CTAs for you:

Thanks for reading and have a great rest of your week!