The rich niche

One of the more cringeworthy cliches is “riches in niches.” I agree with the sentiment, of course, since focusing on specific areas and going narrow and deep generally gives you a good shot at sustainable success. We’re seeing this flight to focus across publishing, which is a change from the last cycle when much focus went to venture capital-funded publications that were built to reach large audiences and therefore typically had a generalist approach. It’s hard to be all things to all people.

An aftereffect of the flight to focus and popularity of niche communities is that the path of least resistance is to focus on elites. After all, we live at a time of unprecedented income inequality, when the top 10 percent own 70 percent of the wealth in America. The Great Resignation and antiwork movements are, in their own ways, a reaction against this imbalance between the capital-holding and worker classes. The days of “making it” by steadily progressing along your career path have passed; no wonder people are taking flyers on ape JPEGs and shitcoins.

We are seeing the development of many new publications, from individual brands to new collectives to regular institutional brands, but one valid criticism often leveled at them is that they are catering to rich and influential people. As Jay Rosen put it, “Literate and affluent people will be well served in the emerging economy for news.” And that’s because you can make money when you have an audience – sorry, community – of rich people.

Jack Schafer poked fun at the sameness of many new publications’ descriptions of their missions and tendency to lapse into cliche land. Perhaps more worrying is many of these publications are after the same type of rich person. Puck, where I’m a contributor, is focused on “insiders” (rich people). Protocol, the Politico spinoff, is also focused on insiders. Punchbowl News, also insiders. Of course, the Smiths are going to snare those English-speaking, college-educated people all over the world, most of whom qualify as rich. Air Mail, well, it’s selling an Air Mail x Anderson & Shepherd “work jacket” for $1,850. Air Mail is funded to the tune of $32 million. Grid News at least stands out for its description of its audience as “anyone who wants or needs greater clarity on the most important stories.” We’ll see if that translates into catering to rich people – and I’ll ask Grid’s CRO Brad Bosserman this later today when we record an episode of The Rebooting Show.)

This is nothing new. Glossy magazines have long focused on the rich. B2B media, by its very orientation, focused mostly on those at the top of those industries rather than the rank and file. Most publications hang their hat on being read by “decisionmakers.” That means the Boss Class.

It doesn’t help that the publishing business has long attracted products of the upper class. There’s irony to the fact that Forbes, home to no less than a dozen lists slobbering over the world’s richest people, has $50,000 starting salaries for some editorial roles. Fashion magazines long banked on stuffing its ranks with kids on trust funds. I can remember early in my career interviewing for an assistant editor role in Washington DC at a foreign affairs journal. I was told the starting salary was $14,000 and “that’s not negotiable.” I asked how exactly anyone could live on that, and I was told “people get roommates, make it work.” I already had a roommate in a basement apartment in a sketchy part of Capitol Hill too close to the bus station, so I’d heard enough. The opportunity to mow lawns on the weekend was tempting, but I passed on consideration. I have little doubt someone whose parents paid their rent snapped up the job.

Publishing has developed sturdier business models over the past several years, thanks in large part to subscriptions. The New York Times has become the shining example of a publishing success story, thanks to its 8 million subscriptions. News entrepreneurs cannot miss that The Times bought The Athletic for $550 million despite The Athletic having lost $55 million on $65 million in revenue in 2021. The promise of recurring revenue is too great. (In fact, one of The Athletic’s backers thinks it sold for too little.) If you’re peddling a news startup to investors in 2022, you’d better have subscriptions as a key plank.

That exacerbates the elitism problem. The people paying hundreds of dollars a year for subscriptions are on the high end of the socio-economic scale. It’s no surprise that news publishers tend to cater to them. Anyone reading the Times can see this upper-class sensibility. The biggest challenges facing societies in the future – climate change, inequality, migration – all disproportionately affect the non-rich. It’s hard to see how trust in news can be reversed if much of it is directed towards and caters to the rich.

So while it’s great to see a new crop of publishers spring up, some with backing and some bootstrapped, there’s clearly gaping holes in providing credible, unbiased information to broader audiences, ie, the 70% of American households who have under $100,000 in annual income, a common threshold for determining “affluence.”

Like Derek Thompson, I believe in an abundance agenda, particularly for publishing. Too often people decry the new and treat anyone’s success as coming at the expense of [insert worthy cause]. But a realistic view is that invention in media cannot only be for newsletters targeting insiders, elites and people with third homes. Jonah Peretti was right in 2017 when he warned that paywalls are “bad for democracy.” Credible information shouldn’t be a luxury good.

My hope is that new monetization models emerge that strike the balance between broad access and sustainable economics. It is important for any publisher to match its editorial mission with its business model. Non-profit models, like those being pioneered at Capital B and The 19th, will help, but there needs to also be more for-profit paths to building sustainable publishing businesses that cater to more than just those at the very top.

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5 things to check out

Axios has hit its five-year birthday. It’s been one of the most successful digital publishing starts in recent times. And it’s taking big swings with its local push and enterprise software business. The real test will be how well Axios Pro does as a high-priced subscription product along the lines of Politico Pro.

The entire Reuters Institute report is worth reading, but in particular the section on subscriptions and memberships stands out. What’s quite remarkable is how many publishers (79%) ranks memberships/subscriptions as their top priority. Like the streaming market, I expect a big shakeout because of the sheer number of subscriptions people have.

Speaking of streaming, Derek Thompson and Rich Greenfield discuss the fallout from the streaming wars. I like Derek’s formula of media: 1. Business models always change; 2. The industry goes through periods of bundling, unbundling and rebundling. The latter phase is starting now in streaming – the world probably doesn’t need Sundance Now – and a similar phase should take place in publishing.

The Atlantic detailed how it spent two years listening to its readers and what it found. Amazingly, people spend a lot of time guessing what people want instead of letting the people say it themselves. Of the list of five reader needs, ranging from “give me deeper clarity and context” to “introduce me to writers at the top of their craft” – lies an interesting one: “challenge my assumptions.” My hunch is the pivot to paid has led most news organizations to avoid this entirely. There’s a big opportunity in this, beyond the reflexive contrarianism that used to be embodied by the “Slate take.”

Mr. Beast is the embodiment, in many ways, of the next phase of digital media. He’s built a powerful brand around himself, allowing him to clear $54 million with a 50-person company. What will be fascinating is to see the staying power of these brands built around individuals. There’s a tradeoff to everything.

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