Welcome back to The Rebooting. Thanks to everyone who has shared this newsletter and podcast with colleagues. The Rebooting now has nearly 10,000 subscribers, all through word of mouth and referrals. If you haven’t subscribed, please do to receive new issues every Tuesday and Thursday.
- I’m closing out the summer on The Rebooting Show by talking to some people building new publishing businesses from scratch. (Part of this is absolutely to get ideas.) Trapital’s Dan Runcie and I discuss how he’s building Trapital into an essential resource for anyone interested in the intersection of hip hop and business.
- Thoughts on productivity and play
- More on Apple’s brazenness, Axios Local and more.
Outside of tech, pharma, fast food and arms, popular culture is America’s greatest export, a product that’s mostly unrivaled in the global economy. And at the heart of American culture is hip hop.
Yet the business of hip hop is often overlooked. Dan Runcie saw this as an opportunity, starting Trapital in 2018. I wanted to talk to Dan about his approach to building an independent media brand. He’s already established himself and Trapital as an authority on the hip hop business, such as his recent appearance on NPR to break down Beyonce’s new album.
Trapital now has over 16,000 subscribers, with the publication supported almost entirely through sponsorships. Dan had earlier done a paid model, but pivoted to free when realizing he could reach far more people without the friction of a paywall – and a value proposition that appeals to sponsors like Moonpay, Convertkit and Alts.
Some takeaways from our conversation:
Hip hop punches above its weight. There’s a school of thought that niche business publications are best in “unsexy” areas, as Industry Dive showed in its focus on big nuts-and-bolts business sectors. But cultural industries have influence beyond their size. “Hip hop is our biggest export that we have, especially from a culture perspective,” Dan said. “You see the artists everywhere in just the reach they have, but you're also seeing how so many things from hip hop culture are repeated in other places.”
Trapital isn’t about news. Dan has made a point of saying what he does is not journalism but business analysis. Part of that is to be clear the product isn’t a tool for keeping up to date on the ins and outs of the industry. Instead of the play-by-play, Trapital focuses on the context with Stratchery-like essays on topics like “how The Weeknd mastered his brand” and “Beyonce’s streaming strategy, explained.”
The pivot from subscriptions. For the past couple years, all roads have led to subscriptions in publishing as the travails of the big digital publishers have cast a pall on the ad model. But as Industry Dive, Axios and others have shown, advertising can be the great focal point of a publishing business model – if the audience is a group that’s hard to reach and valuable. In 2018, Trapital scrapped its initial paid model. Often subscriptions are painted as a set-it-and-forget-it option, but making money is hard no matter the model, and subscriptions require constant selling and marketing. Dan saw as a one-person operation this was cutting into his focus. Instead, Trapital focused on an “influence” model that initially treated the newsletter and podcast as lead gen for consulting, while adding in advertising and moving into investing.
Going beyond solo. Trapital is working as a one–person business, but Dan wants to expand beyond just himself. The challenge, as I discussed last week with Litquidity, is how to do this without losing the personal touch since Trapital’s brand is very tied into Dan’s perspective. “As great as the economics may seem to be as the sole person, and especially when you can double down on the type of influence that you have, the burnout rate is so high, and over time it can it can be tough stay relevant and stay timely,” Dan said.
On productivity and play
The leaders of tech companies are sounding the alarm on decreased productivity, which is a critical issue at at time of rising labor costs. Naturally, this is done as an indictment of “lazy” workers, not on poor management by these MBA types, or more awkwardly driven by the market concentration typified by the tech sector. Leaving that aside, I’m sure we’ll enter into a new phase of financialization of human resources, as spreadsheet goons come up with new “productivity scores” that distill labor into a neat number that can be used to squeeze more out of unit of input, or person. This kind of algorithmic approach is too neat by half. Labor is a creative endeavor, even the most manual jobs that many of the laptop class dismiss like New York City mayor Eric Adams. The real productivity leaps, and innovations in general, tend to be a bottom-up process driven by cultures that gives people the license and space to tinker, or to “play.” Most forms of work need more space for such play rather than being scored by some system for the amount of time a cursor is moving. If you want people to be automatons, treat them as automatons. No wonder Gen Z is “quiet quitting.”
Apple just wants to wet its beak. For all the histrionics – mostly deserved, to be fair – over the unchecked power of Google and Facebook over the digital advertising system, Apple is proving to be breathtakingly brazen in its move to “reform” digital advertising in a way that just so happens to kneecap its rivals and jumpstart its ad business. Meet the new boss, etc. The arguments over Google’s ad tech system are often arcane and easy to obfuscate under the typical torrent of ad tech gibberish, but the reports on Apple’s conversations with Facebook are familiar to anyone who has watched mob movies or followed Donald Trump. Most platform business models are more akin to highway toll booths than anything else.
Cox Enterprises deal for Axios should mean Axios going deeper on its bet on local. I understand the eye rolls that a one-or-two-reporter operation is not going to “save local,” but Axios has seemingly proven out a minimally viable product in many markets, with four clawing past the 100,000 subscriber mark and 24 cities in operation, including new launches in Miami and Houston. The test will ultimately be Axios adding in more original reporting, since that’s the big need as former local giants like Gannet continue to bleed out.
And now, the pricing pivot. Many subscription services have chosen to go all-in on cheap introductory deals to build distribution before raising prices to reflect the economics of providing the services. Inflation and investors wanting to see profits – imagine that – have accelerated this trend, as everyone from Peloton to streaming services like Disney, Hulu and Warner Bros Discovery institute price hikes or preparing for them. The issue with this approach is that the spreadsheet doesn’t capture the customers who feel duped by a sweetheart deal that’s then hiked dramatically.
The essential challenge of how the digital publishing industry has been structured is aligning incentives. There are too many incentives for publishers to focus on quantity over quality by playing growth-hacking games. Ryan Barwick has a great look at how big-name publishers are buying incentivized traffic from mobile games. Like everything in this industry, the practice operates firmly a gray area of “it depends.” The tell that this is an illegitimate practice is how publishers make a point that the traffic they’re buying is a small percentage of their overall traffic. Ok, but if you’re doing this, what else are you doing? This is a big cause of the trust problem in digital media. There’s too much corner cutting and walking up to the line of fraud.
Publishers used to have BuzzFeed envy, but these days they typically have New York Times envy. The publisher has opened a gaping lead as the top U.S. digital news publisher. There was a brief period in which The Washington Post presented as a credible competitor, but those hopes have faded. The Times has resources most publishers can only dream of having, like an “algorithmic testing” team to take a far more sophisticated approach to its dynamic paywall when most publishers struggle to recognize a logged-in subscriber.
Thanks for reading. Hope your August is going well. Send me a note with feedback, questions and whatever else is on your mind: firstname.lastname@example.org. If you’re looking to reach the most influential people in publishing, get in touch about partnering on a sponsorship program.