October 12, 2021

Media Companies Looking To Bring Newsletter Writers In-House

In 1999, Blogger was released, making it easier for people to publish on the internet. Four years later, Google bought the platform. It was also around this time that Weblogs and Gawker first started, making a big push into the “blog-style” of publishing.

But while this was the institutionalization of blogging, there were thousands of independent bloggers all trying to get known out there. The reason I learned SEO is that I was blogging regularly in high school and college, but no one was finding my site.

As time went on, some of these independent bloggers got scooped up by larger media companies. A good example is Bloomberg’s Joe Weisenthal. Back in 2012, The New York Times published a story on him:

When the play was rejected, he took the analyst position instead. And when that began to sour, he and a friend started a blog cataloging their thoughts about markets. They called it TheStalwart.com.

“We wanted a name that sounded serious,” he said. “I think I just blurted it out.”

The site gradually built an audience, and about a year later, in 2005, Weisenthal parlayed that success into a job at Techdirt.com. In 2008, after a couple of more stops along the way, he was hired by Blodget, who wanted to expand the site’s coverage of Wall Street.

Blogging, unfortunately, died out as social media took off. Why write a short blog post when you can just tweet your thoughts? Fortunately, the recent rise in newsletters has returned us to an era that looks similar to blogging. Independent writers are publishing information that they want without any sort of gatekeeper preventing it.

But just as the bloggers were swallowed up by bigger media in the 2000s, many of these newsletter writers will be absorbed by larger media companies. According to Recode, The Atlantic is “launching a newsletter offering that wants to bring writers under the Atlantic’s umbrella (and paywall) while letting them stay semi-independent.”

The Atlantic isn’t hiring the writers as full-time employees, but will offer them some sort of base payment with the ability to make additional money if they hit certain subscriber goals.

If the writers are already selling paid subscriptions to their letters, the Atlantic wants to turn those subscriptions into Atlantic subscriptions. That is: If you’re currently paying Provocative But Thinky Takes Guy $5 a month for his work, now that same money will get you that letter, plus any other newsletters the Atlantic publishes, plus the Atlantic itself, which currently sells a digital-only subscription for $50 a year.

Newsletter writers who join the Atlantic’s program get to keep their existing list of subscribers. So if they decide to bail on the Atlantic, they could start up their business again.

So, it’s not quite the same as leaving your blog for a job, but the point is still pretty straight forward. Rather than trying to build the newsletter entirely on your own, instead, partner with The Atlantic, give them control of the business model, and both parties can make more money.

In theory, this is very interesting. When many started their newsletters, they envisioned getting to write about whatever they wanted. And they have been able to do that. They’ve also had to run a business. They went from just being a creator to being a creator/operator. It’s more work. The hardest part about building these newsletters is getting an audience. And the Substacks of the world do absolutely nothing to help.

On the other hand, a media company brings an audience to the table. And that is incredibly compelling if you really think about it. The newsletter writer can continue focusing on creating while the media company can help push people to the product, which should result in faster growth compared to if the writer was on their own.

In practice, though, this is a bit more complicated. The paid subscription relationships changes. Rather than a consumer subscribing to a newsletter, they are now subscribing to the media company. How does that translate into a revenue share? If we use the example in the quote, if I am a creator making $5 per month per subscriber and then I join The Atlantic, how much will I make there? It’s not possible for it to be $5 per subscriber, especially if a subscriber also gets The Atlantic and other newsletters.

This is different, by the way, than how Forbes has pitched its newsletter offering. Essentially, it was trying to spin up a variety of paid newsletters. It would put writers on the payroll, give them editing support, plus a variety of other services in exchange for 50% of the revenue the newsletter earned. As I wrote in January:

Let’s assume a writer can grow 10% a month on their own and starts with 100 paid subscribers. After twelve months, that newsletter will have grown to 285 people. After the 10% fee and a $10/m subscription cost, the writer is left earning approximately $2,560 per month.

Let’s take a different hypothetical now. Forbes markets the newsletters to its various audiences either with onsite advertising, targeted email campaigns, or whatever other opportunities exist within the network. Instead of 10% growth, it can achieve 20% monthly growth. For the first seven months, the deal is bad for the writer. Even though the writer has over 100 additional paying subscribers compared to the 10% monthly growth, the 50% cut eats into that.

But by the end of the year, there are 743 people paying for the newsletter and after the 50% fee, the writer is earning $3,715 per month. That’s a sizeable difference. Extrapolate that monthly revenue to a full year and the individual is earning $44,580 versus $30,720 on their own.

The Forbes model is much cleaner, but supporting dozens of independent subscriptions is more work than just bundling these newsletters into a single subscription to The Atlantic. But it will also make figuring out the revenue shares more complicated.

The other issue that contributes to the complication is company attention. The Atlantic is incentivized to grow its core business. How much attention and focus can it give these offshoot newsletters? Perhaps because this is part of the core offering, newsletter writers will get more audience development support versus the Forbes model where it has to pick and choose which to promote?

The ultimate “if” that decides whether these models work is if the media company will actually support the growth of these newsletters. If the answer is no, why give up your freedom? On the other hand, if they’re going to help a newsletter grow, which should result in a larger pie, then it becomes a very interesting opportunity.

Unfortunately, what will likely happen is that these creators will get absorbed into these media companies—like they did in previous eras—and then, when the product doesn’t work, pivot to working on something else at said company.

Dotdash Meredith prepares for post cookie life

The deal happened. Dotdash agreed to acquire Meredith for $2.7 billion. This brings over 40 brands into the Dotdash ecosystem, which would make Dotdash Meredith one of the largest publishers in the world.

I think there’s an underlying theme to this deal that really stands out because of something IAC CEO Joey Levin said.

[Dotdash will be able to] “offer uniquely engaged audiences to advertisers and partners—based not on a reliance on private information or personal history but on relevancy to the content they’re consuming and a deep understanding of their needs.”

That’s a critical point. All of these publications that were acquired fit squarely into the Dotdash strategy. It’s service journalism through and through. By adding these publications, it can offer tighter segments of audiences with sufficient scale to keep advertisers excited.

While Google delayed getting rid of the 3rd party cookie in Chrome, it’s clear that publishers are still preparing for the day when ad targeting becomes more contextual rather than personal. And frankly, this is the right type of move to take. If I am reading a story about a BBQ recipe, showing me an ad for BBQ sauce is probably a safe bet. Context counts.

In July, I wrote about Dotdash and how it was IAC’s growth machine. With this deal closing, it seems as if the stage has been set. At some point in the future, Dotdash Meredith will be IAC’s 12th spin-off. It’s a fun time to be in media.

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