November 6, 2020
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A Post Trump Slump Or Has the Paradigm Shifted?

For all intents and purposes, it appears as if Vice President Joe Biden will be the 46th President of the United States. If I had to wager, this will bring about a calmer White House that likely doesn’t generate much controversial buzz.

It’s interesting to see, but the media environment has evolved quite a bit throughout the duration of Donald Trump’s presidency. Four years ago, the most-talked about media companies were Vice, BuzzFeed, Vox, etc. It was still very much a scale for scale’s sake type of environment.

A lot has changed in these four years… The New York Times is the undisputed leader in subscription news. The Atlantic has added hundreds of thousands of paying customers to a subscription product that didn’t even exist when Trump was inaugurated in January 2017.

But what now? Now that it appears calmer folks will be entering the White House, does that mean we should expect a post Trump slump?

Some seem to think so. Ben Smith over at The New York Times wrote a piece about the end of an era for media. This part jumped out to me:

MSNBC and other outlets that thrived on resistance to Mr. Trump may see their audiences fade, said Ken Lerer, a veteran investor and adviser to old media and new, who also predicted that The New York Times would “cool off” as you, dear reader, find other things to do.

And the people who continue to pay attention to the news will stay online.

“The pandemic has advanced digital by four or five years and it will not go back to what it was,” Mr. Lerer said.

It’s a comfortable opinion to have. Trump’s constant controversy clearly contributed to media seeing a huge influx of paying subscribers. The Trump Bump was very much a thing. He generated so much news, people wanted to know what was going on.

That said, I don’t agree with the notion that we are going to have a carte blanche cool off. The paradigm has shifted.

We are smarter

Four years ago, programmatic advertising reigned supreme. The pivot to video was still in full swing. Few were talking about subscriptions. Like I said above, a lot has changed in four years.

The big change that has occurred is that we actually got smarter as operators. It may not have always been because we wanted to and some of us went kicking and screaming. But I do see more intelligent discourse around media companies today than I did four years ago.

A good example is how we look at the subscription business. Even over the past six months, I am seeing publishers recognize the importance of a smart subscription strategy.

I was having a conversation with a senior product executive recently and she said that they don’t just track net new subscribers, but rather, the number of active subscribers. By looking at active subscribers, this particular brand is looking at new and churning subscribers and finding the true health of the publication.

Any intelligent operator would tell you this makes sense, but media has been drunk on top line numbers for a long time. It was never “how profitable I am,” but rather “how big am I today.”

An example of this can be found in a piece I wrote about the DNA of a company:

But a light bulb went off for me when I was attending a Digiday event last March in Vail. The Atlantic’s President, Michael Finnegan, got up on stage and talked about how his branded content business was competing with other VC-backed media companies.

I am paraphrasing here, but the gist was simple… His sales team was running into resistance from some advertisers who would say that The Atlantic’s competitors could offer similar packages for much cheaper. As Finnegan explained, those businesses were ignoring the cost of business when selling those deals because they cared more about showing top line growth.

This fundamentally changed my perception of these media businesses. Revenue, not profit, is what powered their ultimate business goal: raising additional rounds of venture capital. Therefore, the DNA of those businesses was top line growth no matter the cost.

Now counter that with The Athletic. “If we have to, we let them [advertisers] walk away,” Finnegan said at the event. His company’s DNA was about selling profitable advertising campaigns. If they couldn’t do that, they wouldn’t sacrifice.

That’s the difference between a brand that runs like a business and one that is addicted to drugs. Over the past four years, we’ve seen fewer of these addicted media companies sprout up. In their place, we’ve got legitimate media companies that are profitable and grow through that flywheel.

I get it, I join them on Monday, but Morning Brew is a great example of this. They were small when Trump won the Presidency. They never got addicted to the fundraising drug. They built a media company the way it should be built: showing up every day and delivering a product.

Fast forward and look at them now. $20 million in revenue this year and quite profitable. The company is now part of Business Insider. And the best is likely still to come (obviously, since I’m joining. Also, this is the last time I will be writing about them since, you know, conflict of interest and stuff.).

Current audience is activated

The other major reason why I don’t predict a major slump is because audience is now activated in a way that it wasn’t before Trump. This isn’t about Trump vs. Non-Trump. Rather, it’s this notion of fact vs. fiction.

The audience of many of the media companies that would see a cooling off are the same people who fundamentally believe that the press is important. The vilification over the past four years has resulted in an audience that feels as if it has to defend journalists.

At an event in February, Axios’ Sara Fischer said something very interesting:

That’s why a lot of media companies are starting to realize when it comes to diversifying revenue, we’re sitting on something more valuable that’s becoming more and more valuable every day, which is true IP. In a sense, fandom. The reason The New York Times, The Washington Post are making so much money on subscriptions is not because people think they’re going to get some sort of white house coverage they can’t get anywhere else, they can, of course, but I think they’re doing it because they’re fans of that brand. They want to support that brand.

Just because Trump is out of the White House doesn’t mean that this audience suddenly stops being a fan of the brand. Fandom tends to be long lasting. I don’t anticipate much churn for the publications that have built a subscription business over the past few years because people aren’t just paying for news; they’re paying for the brand.

Politics is entertainment

What about a new audience, though? Even if the current audience is activated, will we see new growth slow for these publications that have benefited so handsomely from Trump?

Sadly, no.

I know, I said sad, which doesn’t make sense in a newsletter about building media companies. Shouldn’t I want growth?

I am, personally, exhausted with what politics has become. It’s not about reporting on policy decisions. Rather, politics has turned into entertainment. Everything is a horse race. Look at CNN’s John King. The guy has apparently averaged 3 hours of sleep every night since the election. Why? He has to zoom into the same counties five hundred times to keep the American people entertained.

I’m a Knicks fan. I root for the Knicks to win (and they often don’t). The season starts in a month and a half. I’ll be soaking up all there is to know about the trade rumors, free agency, etc, etc. But that’s sports.

I don’t believe politics should be the same way. I’d like to see a bit more discussion about policies that are being debated rather than whether we should inject disinfectant into our veins.

But the same way that I will be tracking the Knicks over the next 6 weeks, the American people will do the same thing, but for their political party of choice. We’re exhausted, but we’re addicted. And with politics becoming entertainment, it’s not going to go away.

In my dream world, we’d see far fewer publications focused on politics. I didn’t always think this way. Even just a few months ago, I believed more was better. But honestly, how many stories do I need saying the same thing?

This is obviously not the case for every publication, of course. I fundamentally believe a big reason Trump did lose in 2020 is because of the constant reporting on his abuses of power. That was only possible because of the newsrooms across the country. But if you’re thinking about supporting another publication dedicated to politics, please, just don’t. Please.

I’m tired of the constant barrage of stories about a bunch of old lunatics in Washington D.C.

This is why I love niche

Unlike most mainstream political media that all write the same stories, for most of these niche publications, the context of politics is why it matters to a specific group of people.

The Juggernaut has stories like “Why Many Indian American Christians Support Trump” and “We Talked 2020 Election Results with Brown Americans — Here’s What They Said.”

Banking Dive has a story “Why a Biden Win Could Be Good for Fintech.” CIO Dive has “5 State Ballot Initiatives to Watch in 2020.” And Cybersecurity Dive has “No Major Cyber Incidents Reported on Election Day — but the Security Challenge Is Just Beginning.”

These are just a couple examples, but this is why I spend so much time talking about niche media. I don’t really care about any of those stories! And I shouldn’t because I don’t work in banking, I am not a CIO and I’m not from any South Asian country.

And this is the real crux of it… Whether mainstream media slumps after Trump is gone is, frankly, irrelevant. Because over the past four years, we have seen niche media step up as a real alternative opportunity in the media landscape. And I predict over the coming years, we’ll see even more.

Again, maybe I am in a bubble, but damn, I’ve never been more excited about the prospects for the media business. Because when you put things into context for a very specific audience, it has a lasting impact.

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