May 29, 2020
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The Future of Media Is A More Drastic Barbell

It seems as if everyone has the future of media on their minds. It’s to be expected, of course. The past few months have absolutely gutted many of the well known names, so it’s only human nature to look to the future.

But I have bad news for everyone that thinks the future is going to be look drastically different than today. It’s not. Yes, there will be some changes, but in five years, as we look at where media stands, what you’ll find is that things have stayed pretty constant.

Some of the players may be different, of course. That’s to be expected. However, the composition will have stayed the same.

Over the next couple of years, we’re going to see the center of the media barbell get even more compressed. On one side, you’re going to see The New York Times, The Wall Street Journal and The Washington Post—at least in the news business—get larger. On the other side, you’re going to see plenty of niche publications go even deeper than they already are. Some of them will be solo operations—like what I do here—but the majority of them will be traditional media companies.

In the middle, getting compressed further and further, will be media companies with no discernible audience. I know the audience of big players. I know the audience of the focused, niche publications. But the companies in the middle—these generalist publications without clearly defined audiences (and they know who they are)—will still be struggling, saying things like, “we’re almost profitable.”

It’s interesting because many of them raised hundreds of millions of dollars and were supposed to be the future of media. A decade ago, we were watching these rising stars. Some even said that BuzzFeed would beat The New York Times. And yet, look where we are… The New York Times is still the prettiest girl at the party.

That doesn’t mean there won’t be changes, of course. Let’s look at them.

Substack is not the future of media

Before we jump into it, though, I want to touch on something that I’ve seen too many people suggesting over the past few days. I think Substack is a remarkable tool and it it has facilitated turning AMO into a business more quickly than I could ever have imagined.

That doesn’t mean Substack is the future of media. It is part of the future and it will absolutely play a part in many of the small, niche players that are going to pop up over the coming years. But it’s not the sole future.

The first reason is because it is antithetical to a cardinal rule of media: diversification. While it wouldn’t work for A Media Operator, there are hundreds of other niches where I’d want to sell ads, building out a diversified business that generates more revenue than any single source.

The other reason is because of its closed nature. The only things I can do on this site are what Substack says I can do. For example, I’ve always wanted to have a referral system here. I thought it’d be cool if people referred 10 people to the free list, they’d get an “I Am A Media Operator” t-shirt. But I can’t track that on Substack. There’s no API that I could hook into.

Noah Chestnut, the Director of Product management at Bleacher Report, had this really incredibly comparative point to make in the comment section of Divinations (paid):

What’s Substack’s mission 5 years from now? 20 years from now? Is Substack more like Shopify where its a platform for folks or is it more like Etsy where it’s the platform but also the ~brand~ aggregating audience and helping shape discovery?

I believe that Substack will ultimately become an Etsy-like platform, which is no knock on them. Substack is not a silent partner of creators. Its brand is very much front and center—from customer service to the little CTA at the bottom to most people not having a custom domain name. And that’s fine! For many of us, this is what we need.

Nevertheless, I believe that someone is going to come along and build the tools to actually become the silent partner of creators. It won’t focus on audience development—to start—but instead, the focus will be on giving creators the tools they need to build their unique media companies. Want a referral system? Want to have a self-serve ad business? Want to collect more than just email on your users? The software will be open enough to let you do that.

Before I leave this point, I want to be clear… Both types of companies can exist together. While Substack is currently a “closed” ecosystem, that doesn’t mean it won’t grow significantly and play a big role in helping solo creators build subscription businesses. It’s very much part of the future.

The future is the audience

And whoever has the audience owns the future. There’s a reason I write two pieces of content a week. I want one piece to only go to paying subscribers, so you get value. But I also need an extra piece of content that is open to everyone so that it can be shared.

Building audience is the name of the game. It always has been, but it seems that media companies forgot that for a while. To be clear, building audience isn’t about getting people to just land on your site. Building audience is about actually owning an audience.

This also happens to be the hardest part. Sean Griffey, CEO of Industry Dive, tweeted this today (perfect timing for me to reference in this piece):

It’s so true. Since I went paid, A Media Operator’s growth has slowed down. Let me break it down.

I launched A Media Operator on August 9th, 2019. It took me until January 26, 2020 to hit 1,000 people on my email list (thank you everyone who shared my early pieces of writing). That’s 170 days of content, which means I was getting 5.88 new people to sign up per day on average.

From January 27, 2020 to May 29, 2020 is another 123 days. In that time, I have added another 536 people to the email list. That means I am now getting 4.36 new people signing up per day.

No one should be surprised here… I went from distributing two pieces of free content per week to one. In the process, I turned on subscriptions and over 8% of people now pay. So, thank you to every single one of you.

The reality is, audience development is a ton of work. And no one is really thinking about this. In many conversations I have with people about building their newsletters, they talk about more content. Smarter content. Better written content. In reality, what we should all be thinking about is better distribution. What can we do to get our content in front of more people? That’s hard. That’s a lot harder than writing this essay.

What does this have to do with my point about the future of media?

One of the early themes of this newsletter is that media companies need to look at their all star talent and find ways to partner with them. Jarrod Dicker puts it more eloquently in a piece he published yesterday:

Putting talent at the center of its business opens up entirely new opportunities for media companies when the core asset and value is attributed to the individual. The new line of business now becomes somewhat inverted: instead of everything being limited to under a brand halo where advertisers buy on the brand and consumers subscribe to the brand, the company and its customers now look at the individual as their business. This presents a business opportunity that’s so often seen in the media industry tied to talent which is interoperability (see: Kara Swisher, Andrew Ross Sorkin).

A recent example of this is the Call Her Daddy podcast on Barstool Sports. Blake Robbins took notes when Dave Portnoy explained the situation. Have a look:

The way it wrapped up? Alexandra has the show again, she probably owns a solid chunk of the IP, Barstool gets to keep the talent and everyone but Sofia is happy.

Why stay with Barstool? Because they came with such a large, baked in infrastructure that the podcast is able to grow so much faster than it would have on its own. Their audience development chops are next level.

There is no doubt many will go out on their own. But for many more, the possibility of partnering with a media company that already has a large audience just makes more sense. The best part? The creators can focus on what they do best and the media companies can focus on what they do best with everyone’s incentives aligned.

The future is gleefully niche

Sometimes I think that I should have found a way to include the word “niche” in the title of this newsletter. I love niche media.

One thing Substack has done is made it abundantly clear that niche media can be very profitable. Here are a few of their top 15 publications:

  • Sinocism by Bill Bishop, a publication all about China
  • Petition by Anonymous, a publication about distressed investing and bankruptcy
  • HEATED by Emily Atkin, a publication all about climate change

Heated has already generated $175,000 in revenue and is #11, so imagine how much Petition and Sinocism are making. We’ve been saying it for a long time, but hopefully people can see, building a niche is where the focus needs to be.

And that’s my message to anyone on this email list that is not yet running their media company. Figure out your audience, report the hell out of the niche and opportunities to monetize will present themselves.

But before I close, I want to touch on one final point… I’ve heard some people question whether even niche media can survive with The New York Times expanding into verticals. It now has cooking, parenting and in the fall, it was hiring an entrepreneur in residence to focus on new opportunities. A job listing at one time said:

We’ve identified several domains that we intend to explore next, and we are looking for talented, entrepreneurial leaders to identify, define and build the essential products to meet the market opportunity.

Rightfully so, The Times has determined that if it can perfect its audience flow and build a subscription business, it should try to do it again with other verticals.

While that’s possible, there’s no way that The Times can attack every single niche on the planet. It may identify a few, but that doesn’t mean we’re going to see every niche publication go up against the Gray Lady.

This is especially true if you pick a business niche. Just look at this tweet and then sigh.

The reality is, The New York Times is in the scale business. It’s not going to go after many of the same niches that we spend our time talking about. It’ll dip its toes, put one or two people against a topic, but the reality is, it can’t do it all.

Let me wrap up…

It’s very easy to say that the future of media is going to drastically change. I’ve had people mention Clayton Christensen’s innovator’s dilemma anytime this conversation comes up.

But the reality is, the future of media looks a lot like it does today with the exception of two fundamental changes.

First, the big are going to get bigger and the niche are going to get deeper. Both are going to be successful and profitable. Those in the middle that have a poorly defined audience are going to find themselves slowly shrinking and struggling.

Second, media companies will be the ones to partner with their star talent. It just makes sense because audience development takes work. Once incentives are aligned and media companies look at their newsrooms and creators as an asset rather than a liability, the possibilities really get exciting.

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