Widening the aperture

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Summer is nearly here. My sincere hope is for a blanket moratorium on webinars and virtual events as people enjoy a Hot Vax Summer and prepare for a far more normal fall, perhaps even joining their rise-and-grind CEOs in the office. This week, I wrote about the tricky move to start small and focused but then widen the aperture to grow. As always, please email me with ideas and feedback -- and please consider sharing The Rebooting with others. If you haven’t already, please sign up to get The Rebooting delivered to your inbox every Wednesday.

Widening the aperture

With the scale era firmly in the rearview mirror, the age of niches is upon us. The hunt for flimsy connections to an audience has given way to an appreciation for communities of like-minded people, which are often by definition much smaller.

Morning Brew CEO Austin Rief made this point in a recent chat that the opportunities he sees are far narrower than the broad Morning Brew clones you see popping up these days. “There’s too much pattern-matching in newsletters now in trying to replicate what we did,” he said. This strikes me as right. People tend to pattern match, even unconsciously, and end up attempting variations of models that have worked. This is why many newsletters are the Stratechery of X -- and why there are so many Morning Brew of X.

Instead, the biggest opportunities still lie in going narrow and deep. That means, more often than not, having a lens that isn’t all-encompassing. Uber did not start as a super app with a logistics network for rides, groceries, delivery food, etc. It began far narrower in 2009: black cars in San Francisco, where getting a taxi was long a nightmare. Only three years later Uber widen the aperture by launching the more affordable UberX service. What I think is often missing in the paens to starting small is nailing the needed widening of the aperture, both in how to widen and the timing.

At Digiday, we focused initially on publishers because it was an area traditionally neglected by trade publications, weirdly enough. They always started from the view of the marketer and agency -- that’s where the money lies, so I get it -- and even within publishing, we narrowed to what were then niche areas like programmatic advertising. This was intentional. We simply couldn’t compete across the breadth of the industry. It helped that a decade ago areas like programmatic advertising, social and mobile were nascent -- and filled with venture-backed vendors with growing marketing budgets and a short timeframe to gobble up market share.

Over the subsequent years, we widened the coverage aperture within Digiday by adding retail and video (eventually streaming). Geographically, expanding to Europe and Japan widened the aperture further. We incubated fashion coverage within Digiday to launch Glossy, which itself widened its aperture after two years to include beauty and wellness. We spun out retail into its own publication to give it a better shot at expanding into DTC, Amazon and marketplaces. On the format side, we expanded from text and events to include audio. (We mostly sat out the pivot to video; too expensive and hard to pull off for B2B.)

The test for publishing brands is how they widen their apertures. Some examples:

• Axios began as a very Washington DC-focused publication. It has always had the ambition to be more, and it has executed that by widening into media, finance and local.
• Morning Brew is still described as a newsletter company, but it is busily widening that aperture to encompass podcasts and soon an investing show.
• The New York Times has widened from news to include cooking, games and more.
• Barstool began as a sports blog for Boston before adding national coverage, podcasting and personality-driven franchises.

The same process inevitably occurs on the business side. The best approach is to find a lucrative niche set of businesses that aren’t currently well served by the existing set of solutions. For Digiday, that meant ad tech and marketing tech companies that needed leads. The events business was premised on supplying sales leads to these companies. It was  a tough and unglamorous job of getting a publishing exec who makes tech spending decisions in front of an ad tech sales person. Doing that meant putting on events in far-flung locales, lots of travel, tons of hand-to-hand combat to get the buy side there (and captive in a location where they couldn’t scoot off to meetings). That aperture expanded to include other forms of leads to feed clients’ CRMs. That meant starting a content studio to run lead gen campaigns. It was only after several years that we even sold regular brand building digital ad campaigns.

Many successful media entities will start small and stay small, remain focused on their area of expertise and what they do well. I greatly admire that. It reminds me of many businesses in Japan, whether its a restaurant or coffee shop. Back when we could travel, I went to Japan once a year and would inevitably end up at Turret Coffee, near the old fish market,  serving what I think is the best latte in the world. The entire store can fit maybe eight people. It’s so tight they post “the rule of the one cup” to allow others to enjoy their lattes too. A very Western perspective is to make this shop bigger, add new items, etc. But the owners would prefer to keep it focused.

But that won’t be enough for many publishers. There is a natural inclination to growth, if only to mitigate the inevitable risk of stagnation and decline. The trick is getting the direction of growth and the timing right.

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Scenes from the rebundling

Publishing is following in the footsteps of the streaming world, as I noted was likely, with transactions queued up. In the past week, reports have emerged that:

• Axel Springer is in talks to buy Axios, according to The Information (and former colleague Sahil Patel). This is a deal that makes a ton of sense as Springer looks to build its US-focused assets around Insider. It already owns eMarketer and Morning Brew, and Axios will give it the heft in particular in Washington that it doesn’t yet have. Even more critically, Axios bet on newsletters, meaning it would bring over to Insider 1.4 million email subscribers. In theory, combined with the 2.5 million from Morning Brew and Insider’s own newsletters, this will give the company the raw material to cobble together a first-party data offering at a time when ad targeting is changing due to the phase out of the third-party cookie.
• Sara Fischer of Axios has news that The New York Times is looking to buy The Athletic. The Times won’t reach its goal of 10 million subscribers in 2025 on news products alone. I remember pushing Meredith Levien on this when we spoke on the Digiday Podcast back in 2017. The ambition of rivaling Netflix is one thing, but the universe of news subscribers isn’t big enough, particularly as the Times aligned with The Resistance during the Trump era. That led to short term gains, but the fastest growing parts of the NYT’s subs business are products like cooking. (It’s no surprise the Times is looking to expand more into gaming.) The Athletic has 1.2 million paying subscribers for sports coverage. The Times isn’t strong in sports. What’s more, sports is very local, so the Times will have more exposure to markets it isn’t yet dominant in. As Tony Haile has pointed out, the Times is a competitor to local papers and already boasts more subscribers in major markets than the local papers do.

Other things to check out

• Shira Ovide has a smart column about the inevitable conflict of Amazon and Apple’s advertising businesses running up against their professed customer focuses. The reality is advertising is a tradeoff. Very rarely does it improve the customer experience, but as Jeff Bezos calculated the “tax” on the experience could be offset by the extra revenue being fed into new and improved products.
• Time has a goal to hit 10 million subscribers by 2030. It currently says it has 2 million, of which the overwhelming majority are print subscribers, based on figures from the Audit Bureau of Circulation. I’d love to see the math on how the road to 10 million.
• I want to dig into Future in more depth, but the UK-based publisher is an unheralded success story. The home to Games Radar, Tech Radar and Tom’s Hardware has an impressive turnaround story, aided in large part by a healthy and fast growing commerce business. PressGazette has an interview with CEO Zillah Byng-Thorne.
• Surprise, turns out those who are loudest about the ills of sexism and racism are mostly indifferent to ageism. Young people always think older generations have a monopoly on hypocrisy. Turns out to be a human blind spot.

That’s all for this week. Please help me widen the aperture of The Rebooting by sending me a note with areas you’d like to see covered and by sharing this with others who might find it valuable.