February 20, 2024

Most Media Companies Want Great Newsletters Without Investing

Occasionally, I find that there isn’t much news to write about. It’s a function of the fact that so few reporters are left covering the media industry (though I intend to fix that). And so, I thought I’d do what I usually do for Friday pieces and dig in more on tactical issues in today’s piece. But first, take a look at my brand new sponsor, Sovrn.

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NY Times vs. Others

Years ago, I worked for someone who vehemently opposed content personalization. In his opinion, we had homepage editors—or A1 editors, in the case of a newspaper—to be that curator for you. We trusted people to have that discerning taste in what belongs where. As search and social gained prominence, things like the homepage became less relevant. “The story page is the new homepage,” executives would say.

What is so fascinating is that, as the big brand name newsletters continue to gain prominence—Morning Brew, The Hustle, 1440, The Daily Upside, The Skimm, etc.—we are right back where we started. Millions of people trust very few for insight into the most important news stories of the day.

And so it should come as no surprise that Vanity Fair did an entire story on The New York Times’ attempt at creating a product like the above with its main newsletter. According to the story, reporters who once cared about getting on the homepage are now desperate to get into the newsletter. Why? It hits 5 million inboxes daily, making it one of the larger media company newsletters out there. And who is in charge of it?

The perspective of “The Morning,” unsurprisingly, tends to align with [David] Leonhardt’s, which can be a source of tension in the newsroom. “It’s like putting him on the top of A1 every day,” said a second Times staffer, noting that “the idea of this conversational newsletter is a great idea, but the concept of it being the flagship” has been hard for some people to square. Through the flagship newsletter, Leonhardt has effectively served as the voice of the institution.

Readers’ relationship with Leonhardt has contributed to a “healthy conversion rate” from the newsletter to overall subscribers, according to the Times, particularly following the occasional appeals he’s made to explain why the Times is worth paying for. (The Times recently hit 10 million total subscribers.) The newsletter gives “people a sense of the full New York Times,” says chief product officer Alex Hardiman, which is “news first, but we do have all of these lifestyle value propositions.”

“Readers’ relationship with Leonhardt…” People are directly connecting with an individual versus connecting with the brand. There is an inherent voice that people are resonating with, even though that voice is different than “The Gray Lady’s.” In the Vanity Fair piece, the author writes, “It’s a different tone than reporters typically use in the news pages—more conversational and straightforward and perspective-driven—that Dolnick and Kahn hope will filter back through the traditional paper.”

One final part from the Vanity Fair story is worth looking at:

Throughout the meeting he [Leonhardt] chimed in to connect a decision or finding to their broader mission, such as when an editor noted that of the 20 most-clicked links in last week’s newsletters, only three were from the news section. “I love that finding, right?” Leonhardt commented, “because we are deliberately writing our news bullets in ways to make them as information-full and clear as possible.”

Compare this to a conversation with another big media company in New York. They asked me one day how they could make their newsletters better. Naturally, I asked: “What kind of resources would you put toward the newsletter?” Their reply? “Maybe half a person’s time…”

Since leaving Morning Brew, this conversation has come up more often than ever. Everyone wants a Morning Brew-like newsletter. They want those engagement numbers. They want the tens of millions in very profitable revenue. But the idea flatlines when I ask them how many people they’re willing to put into the product.

Which is more likely to work? The half a person trying to get out a quality product or the team focused on putting out a great product? Having worked with great newsletter teams, I can tell you that focus matters. Knowing what job you will do day in and day out matters.

And that resource allocation trickles down to the actual product. When you dedicate resources to creating the product, you can spend more time creating something outstanding. As readers reply to the emails, the writers can evolve and iterate into building something that resonates with the reader.

And it’s not just The New York Times. Politico has a newsletter called Playbook. It used to be written by Axios’ co-founder, Mike Allen. When he stopped, he handed the reins to Anna Palmer and Jake Sherman, who both went on to launch Punchbowl News, and Daniel Lippman. Now, it’s written by Eugene Daniels, Rachel Bade, and Ryan Lizza. That’s three people to create one newsletter.

Is it any wonder that this newsletter likely generates eight figures a year in revenue? Because Politico has put the resources into creating this product, it can, in turn, reap the benefits. You might say, “But it’s easy to put multiple people on the product when it generates that much revenue.” Unfortunately, you’re looking at it backward. Without investing in it, you’ll never create a good enough product to generate that much revenue.

If you want a newsletter with as much influence and commercial power as any of the ones I’ve listed above, you need to give it two things:

  1. The freedom to push a voice that connects with the audience, even if it might run counter to the overall style guide
  2. The resources to put out a truly great product, even if it might cost more in the beginning

Great newsletters take time to build. But the direct revenue—not to mention the indirect promotional opportunities—often makes it worth it.

Dotdash Meredith, Dow Jones, and NYT Financial Analysis (Pro)

On Friday, I dug into the financials of three public media companies: Dotdash Meredith (through its parent company, IAC), Dow Jones (through its parent company, News Corp), and The New York Times. It’s a part of AMO that I’ve been wanting to bring back for AMO Pro members.

As you can imagine, Q4 (or Q2 in the case of Dow Jones) was interesting for all three brands. Here is one key point for each of them:

  1. Dotdash Meredith is making its ad business work in an era when so many publishers’ ad businesses are struggling. And D/Cipher is becoming a more significant part of the business.
  2. Dow Jones continues to see significant growth from its B2B business, with that segment leading much of the growth.
  3. The New York Times is sacrificing short-term ARPU to acquire more subscribers on its multi-product bundles. But it’s working.

It’s very much a tale of two cities with the media industry. All three are doing pretty well in stark comparison to many other media companies out there.

If you want to dive deeper into all three financials, become an AMO Pro member and then read the full analysis here.

Thanks for reading. If you have thoughts, hit reply or become an AMO Pro member to join the AMO Slack. Have a great rest of your week.