Back to the future

Tonight, we’re kicking off The Rebooting Dinner Series with a gathering of top revenue-side publishing executives in New York. We have several more lined up this fall, capped at 20 people. Send me your information if you’re interested in invitations.

This week, Bustle Digital Group Bryan Goldberg joined me, Alex and Troy on the People vs Algorithms podcast for a very open discussion of the legacy of the scale era and what comes next, which sounds a lot like pre-digital media. In Recommendations: $1m revenue per employee at Punchbowl; tight labor markets; Hollywood’s middle-class crunch; and brand dilution at the NYT.

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Recommendations

Revenue per employee is the new uniques: The more with less era means publications need to make more money with fewer people. Punchbowl has had a sterling first couple of years, nearing $20 million in revenue – and maintaining a tech company like $1 million per employee. That’s night and day from what publishers in the scale era were doing. (Axios)

Labor crunch: There will be fewer workers. The more with less era will be driven by macroeconomic factors. Labor markets are projected to remain tight for years to come, as boomers retire and more people choose independent paths. “It is a talent supply chain and you have to think about it that way, except in this case, talent has a choice.” (WSJ)

The middle-class crunch: Those at the top of their fields will have more options than ever, but the middle is getting squeezed in most areas. After the smoke clears from the Hollywood strike, despite the solidarity vibes, the divide between the haves and have not much’s will expand. “Middle-class writers on a show who might have been rewarded with overalls might not get them, and the studios, in canceling a number of shows that had previously been renewed, have shown they may be a little more willing to make cuts to guild members that just waged a five month war. The divide between working writers/showrunners and the bottom of the guild is already vast, and post-strike it will likely get wider.” (Puck - sponsored)

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Brand dilution: Even the mighty New York Times has to make tradeoffs. It has achieved escape velocity from its peers but possibly at the expense of what makes The New York Times unique. “Many reporters who work there now are dismayed that New York Times seems to be vanishing as it morphs into a far more mass-market enterprise, with many more readers than before, half-following the live updates on their phones and chewing over the vastly expanded “Opinion” pages while Wordling daily. It’s all about the bundle.” (New York)

The pivot to events: Bloomberg Media’s events business is up 48% while the overall business is up only 3%. (Adweek)

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Bustle Digital Group CEO Bryan Goldberg joined PvA for a wide-ranging conversation that covered lessons of the scale era, “the golden era of brands,” why Google sees affiliate content as an invasive species, whether Gawker 2.0 was always doomed and what makes a great party. (Somehow, we didn’t discuss the Napoleon hat. Next time.) Listen on Apple, Spotify or other podcast platforms.

Fleets of town cars no longer idle outside gleaming magazine headquarter towers. The Condé cafeteria is no longer a mythical place, even if Ritz staff still scurries to get Anna her preferred seat for a food-free lunch. The top perches at magazines are a far cry from the cushy sinecures they were. The $5 intro offers for magazine brand subscriptions have a whiff of desperation, especially when they have to throw in stickers.

But in many ways, Condé, Hearst and its magazine brethren have “won,” in that lifestyle publishing is moving beyond the scale era to embrace a familiar playbook for magazines: Use what Troy calls the “packaging power” of the brands as a fulcrum for activations. In this model, quality and cachet trump growth-hacked distribution. Even print matters. The name of the game is again scarcity. It’s back to the future.

Bryan Goldberg has been a Main Character in two waves of digital media. The first wave, as a founder of Bleacher Report, was marked by upstarts like The Huffington Post mastering search distribution and low-cost content models to outflank lumbering legacy publishers burdened with high costs and strategic drift. (This was a time when The New York Times was less juggernaut, more an object of concern.) Then, as founder of Bustle, Bryan was at the forefront of what Troy calls the “fast and furious” wave, where the playbook was “get a lot of eyeballs and sell them however you can.”

On the face of it, the leaders of that era have not just returned to earth but crashed into it. BuzzFeed is a penny stock, valued at under $50 million, despite owning both Complex and HuffPost. Vice is looking to a post-bankruptcy revival.

Bryan, who joined a new episode of People vs Algorithms podcast, notes, “The perception was better, but does that mean the reality was better?” In Bryan’s assessment, the critical error of that era, fueled by ZIRP funny money from gung ho VCs and scared shitless legacy media companies, was believing the right path was “super brands” that could be all things to all people. The world didn’t need Refinery29 to cover congressional races and the first Russian invasion of Ukraine? Mashable’s move into foreign affairs and politics left it a “jack of all trades, master of none.” Business Insider wanted to mop up B2B verticals while dominating Facebook with gooey cheese videos.

“VCs were throwing cash at these companies,” Bryan said. “That doesn’t mean things were better or healthy.”

If there’s a winner from the scale era, it’s TikTok and Instagram. They’ve proven that what used to be dismissed as user-generated content can be packaged, turbocharged with algorithmic distribution and suck up a ton of time that would otherwise go to professional media. Compared to when Bustle was founded in 2013, there’s 1,000 times more content being produced – and, crucially, the quality has risen. Creators are eating most publishing brands’ lunch.

The answer for Bryan is to adopt the playbook of many of the media companies Bustle was founded to displace. The new playbook: Lean on strong brands like Nylon in Bustle’s case, focus on high-value niches, amplify the brands beyond the page and win on services.

“You can’t fight the platforms,” Bryan said, quite a different tune from back in 2015 when Bustle and its peers were riding the Facebook distribution wave. Now, big numbers don’t matter: “We’re no longer focused on reaching 100 million or 50 million people,” he said. “We’d rather reach the right 30 million.”

The question for publishers in a platform world is whether they “play by the rules,” and hope not to become collateral damage in some intergalactic platform fight, or de-risk by doing things platforms will not. The safest areas are usually services, like putting on parties at Art Basel and Coachella that are too cool for a hard–working newsletterer, even if his wife is a client.

In the case of Nylon, Bustle is even bringing back its print edition, although not as a primarily distribution vehicle. Instead, the magazine can serve to give a brand heft – people still give a shit about being on the cover of magazines – and serve as something akin to a souvenir. The real money is in “brand activations” that are measured mostly on their PR impressions, not selling ad slots, a shrinking portion of Bustle’s business.

One of the telling parts of this very enjoyable conversation was when I asked Bryan to assess the new crop of digital media companies, from Puck to Semafor to Punchbowl, and he demurred by saying he’s more interested in legacy brands. And that’s in large part because Bustle’s new playbook is geared to those kind of brands like Dwell, which Bryan rues not acquiring. (Recurrent bought Dwell last year.)

“I don’t think anyone won,” Bryan said of the scale era. “As the world changed, our plans changed.”

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