January 31, 2020

The Benefits Of A Media Company

Over the past couple of weeks, I’ve had many conversations with people discussing the merits of media companies—some in favor and some not.

A big driver of this discussion has been the rise of the entrepreneurial journalist. Substack and self-hosted tools have made it possible for writers to take their expertise and launch their own solo publications.

It makes perfect sense.

In the past, if you were a journalist, it was really hard to be on your own, so you naturally gravitated toward a well respected publication. But with the rise of blogging in the 2000s and then the past few years with these new platforms, it’s never been easier to go it alone.

Naturally, this begs the question: if I can operate independently, why would I go work for a media company versus being my own boss and keeping all my money?

Earlier this week, The New York Times announced that Ben Smith, editor in chief at BuzzFeed News, would be joining to take over the column that David Carr used to run before he passed away in 2015.

Ben Smith is the kind of guy who, if he wanted, could build a great business here on Substack. And I’m not the only one who thinks that.

But instead, he decided that he wanted to go join The Gray Lady. Although there might be more money running your own product, there are things that The New York Times—or any media company—can offer that you can’t get otherwise.

Let’s break that down…

Brand and the work

Smith gave an interview to The New Yorker about his decision to go to The New York Times and alluded to the impact of the brand. He said:

When I was trying to hire [the Times reporter] Nicholas Confessore once, he said to me that the thing about working for the Times is that you never have to explain yourself. [Laughs.] I don’t know. I have always enjoyed competing against the Times.

That makes sense to me. Whenever I hear that someone works at The New York Times, I perk up a little. I’m not sure if that’s because I’ve always loved The Times or because I expect the best people to work there.

Ben Smith has a brand and he’s a great editor/journalist. But The New York Times has a greater brand. Its brand is built on the backs of 1,600 journalists.

That’s what a media company can bring that you can’t get on your own.

A journalist can leverage that brand into getting better sources. The brand isn’t everything, of course, but it opens a few doors. That then compounds. As the journalist reports on better stories, other sources come forward with information as well.

You can focus + there are resources

I’m in Washington D.C. this week and I stopped by the Industry Dive office—I wrote about them a while ago—and got the grand tour of the operation. It’s insanely impressive. 19+ publications; 150+ employees.

As I was getting the tour, we stopped at a pod with an editorial ops person, the editor in chief and a visual designer. Three different people who are responsible for different parts of the editorial operation, all of which are meant to help amplify the journalist’s work.

Let’s not forget the value of an editor. I’m fortunate my girlfriend is, for some reason, willing to edit each and every one of these pieces. Imagine what the copy looked like before she got her hands on it. As a solo writer, though, you’re the editor.

It doesn’t stop there. As the owner of a solo newsletter, you have to do everything. You’re writing, doing audience development, sales, finance and the list goes on. But at a media company, you get to focus on one thing specifically.

Not to mention, you also have to be responsible for consistent production. At a company with a larger team, a journalist can take some time to dig into a story. Here at A Media Operator, I have a few deep-dives I would love to write, but they take time and I’ve got a production schedule that says I need to publish twice a week.

The benefits don’t stop here. Lawsuits are a way that wealthy people/companies attempt to influence coverage. Libel lawsuits can bankrupt an individual. A company, on the other hand, more likely has the resource to fight back and protect the people on its team.

That’s not to say solo operations can’t do great work, of course, but there are limits to what a single person can do.

Wider audiences

I was having a conversation with an entrepreneur who is looking at launching a subscription publication with a group of well known journalists. His argument is that, by getting multiple journalists together, they each brings their own fans, which can help the project grow larger and faster than if any of them operated on their own.

This is what The Athletic identified and have aggressively built. If one journalist covers the Knicks and another covers Tottenham Hotspur, a single reader might find both interesting. Along the way, that same reader might realize they also like The Yankees and there’s a third journalist for that. This provides a much larger audience than a journalist might get otherwise with their solo operation.

This is the bundle effect. It’s why we have subscription to Netflix, Baby Yoda+ and The New York Times. As a consumer, we want to minimize how many different things we have to manage. A publisher can offer that to consumers.

Media companies need to respect journalists more

And yet… I completely understand why there has been this interest in journalists leaving their jobs and running their own publications. On Substack, there are many such journalists.

The one I’ve been most impressed with is Emily Atkin from Heated.World. She left a long-term job at The New Republic to launch a newsletter and she, in quick time, earned a six figure income. She’s probably making more than she ever did working for a publication.

Media companies look at journalists like cost centers rather than looking at them as the product and life of the business. At a tech company, you never see the engineers getting treated like cost centers. Instead, these companies hire the brightest engineers, pay them really well and ensure they have what they need.

But at so many media companies, senior management only thinks about how to get the most out of journalists while paying them the least amount of money.

Back in October, I wrote that the newsroom is your greatest asset. Here’s a part that’s worth reading:

Your newsroom is not a liability. It is the biggest asset of your business; the fuel of the entire operation No other department matters as much as the newsroom.

Think about it this way…

If you’re trying to save money, do you stop buying gas for the car you need to get to your job? Of course not. You would then lose your job and have even less money.

And yet in media, so many operators look at the newsroom and go, “yeah… I don’t need this fuel…”

At a tech company, the engineer is the most highly paid because they create the goods. At a media company, the journalist is one of the lowest paid people even though they create the goods.

Not to mention, the incentives are all off. If a journalist does a great job, they may get a pat on the back and possibly a mini-bonus. But the publication really reaps the benefits.

That’s why I believe in the journalists getting a piece of the business. The incentives are then all aligned. Each department works as hard as they can to make the business successful. If the business grows, everyone benefits from it.

I know… It’s not a typical approach in media to give equity. But there are incredibly bright journalists that are going to ultimately decide to launch their own thing because their upside is greater. Why make the choice so easy?

Another way would be to support the most entrepreneurial journalists on your team and go into business with them. In my 2020 predictions, I wrote:

The second path, which I would love to see, is established publishers starting to incubate these newsletters. If your top journalist comes to you and says she’s going to leave because she want to launch a paid newsletter on Substack, wouldn’t it be better to try and keep her and her newsletter?

Essentially, you’d be going into business with an employee. The newsletter becomes almost co-owned by the media company and the journalist. The journalist provides the expertise and the writing; the publisher provides the operational support and a far larger audience. You split the revenue.

This is another example where incentives would be aligned. The media company keeps their great journalist; the journalist has more upside. Both sides do what they’re best at and everyone is left happy.

Media companies matter

While I love these individual newsletters, I do believe that there is inherent value in the infrastructure that a media company offers. The brand can open doors; the resources allow the journalist to focus on their beat; and it’s possible to build a broader audience because of it.

On the other hand, media companies need to evolve and recognize that their newsrooms are the real product. It’s easy for us business side media workers to see how much is being spent on journalism and think about saving money. But this is the beginning of the end.

Embrace the mantra that your newsroom is the product. This is how you succeed.