The future of news is a personalized voice-activated AI that operates in a mixed-reality environment built completely on the blockchain.
Just kidding, it’s email.
Well, actually, it’s email with payments. But honestly, that’s about it.
If this doesn’t immediately strike you as a $100 billion idea, we forgive you. After all, no one makes money from media anymore, right? The VCs have learned their lesson. Facebook controls the news now, and there’s no turning back.
Even the best digital media startups have ultimately floundered at the feet of Zuckerberg. BuzzFeed, backed by $496 million dollar of venture capital, missed its targets last year and laid off six percent of its staff. Mashable sold to Ziff Davis for $50 million, a pittance compared to the rumored $250 million valuation it had a few years ago. Vice, which has raised $1.4 billion, has been missing its revenue goals, too. Do you remember Upworthy ($12 million raised)? Mic ($60 million)? Tronc? (Okay, okay, that last one’s not a startup—just a meme.)
What these struggles tell us, however, is not that the media is dead. People still read stuff. They just tell us that building for scale, pouring hundreds of millions of dollars of venture capital in to the mix, and praying that, in the face of the obvious logic that any sensible marketer is better off spending their money on Facebook or Google, some small piece of the advertising market can be funneled towards digital news sites, if only a headline can be perfectly bait-tweaked, if only enough pork-pie-hat-wearing hipsters point a camera at a gunfight in Kabul, if only a black-and-gold dress can magic up enough pageviews to pay for Woodward and Bernstein’s comp packages.
They also tell us that tech and media have, on the whole, not mixed well. If using tech to reach huge audiences doesn’t work, what does? If using a beautiful content management system doesn’t miraculously solve a media company’s cash flow problems, what will? If short videos, or elaborate commenting systems, or mobile storytelling, or interactive graphics, or Snapchat Stories, or Instagram hashtags, or Instant Articles, or Google AMP, or programmatic advertising, or native advertising, or branded content, or affiliate links, or press conferences in Second Life can’t save the media, why would any right-thinking investor ever send another dollar in the direction of anyone who dared to presume that the written word has value?
What Silicon Valley gets wrong is that tech has never been the answer to the media’s problems. Tech can be helpful, but overall everyone is much better off if it just gets out of the way. Silicon Valley is dripping with well-meaning people who genuinely want to help solve the media crisis, but the results haven’t even been mixed—they’ve just been sad. Flipboard didn’t save the news. Rockmelt didn’t save the news. Medium didn’t save the news. Twitter isn’t saving the news. No matter how many tweaks it makes to its News Feed, Facebook can’t help but do the opposite of saving the news—its business model practically demands it. In all these cases, the tech companies’ grand solution to the media’s problems has been inserting themselves between reader and writer as an unwelcome distribution layer to redirect ad dollars.
We can’t put all the blame on Silicon Valley’s shoulders, though. The media industry itself is guilty. It has proven to be hidebound, slow to adapt, and bad in all the areas where Silicon Valley is good: radical reinvention; scrappiness; acceptance of failure; making bold bets; starting lean; and proving new models with “minimum viable products” before they’re fully implemented, to name a few. In fact, the media industry has placed too much faith in Silicon Valley’s products and not enough in its way of building those products. That it took Jeff Bezos to come into the Washington Post and suggest simple things like licensing its content management system and being more aggressive with subscriptions is fair evidence that, just when it needs help the most, the media industry is incapable of helping itself.
The best way for media and tech to interact in the current climate is for media companies to turn away from the assumptions that have been dominating their business models for the last two centuries—namely, that content must be molded around blocks of advertising—and for tech companies to fade into the background, providing infrastructure and support without glory-hunting and thrusting themselves into experience itself.
Finally, after many years of panicked flailing, many rounds of buy-outs, and the bodies of many thousands of journalist-refugees washing up on the shores of PR-istan, we are seeing some glimpses of progress. Patreon, for one, has made it easy for creators to accept payments from their fans. That’s kind of groundbreaking. Last year, Patreon paid out more than $150 million to creators. 2017 was also a breakout year for The Athletic, a start-up that has vacuumed up the talent cast off from ESPN and Sports Illustrated to create a network of local sports news sites that are thriving on the support of subscriptions. And The Information, now in its fifth year, has committed to doubling its editorial staff in 2018 thanks to strong subscriber growth. It has even started an accelerator to help other media startups follow its path (which they definitely should).
But the example we like the most is Ben Thompson’s Stratechery, a one-man publication that sends its subscribers four emails a week that carry high-quality tech business analysis. Thompson’s coverage respects people’s time and intelligence because his business’s primary loyalty is to readers, not advertisers. He charges subscribers $10 a month or $100 a year.
Stratechery is an example of tech and media meeting perfectly in the middle. Thompson has taken a Silicon Valley approach to building the publication while taking advantage of online payments infrastructure and simple publishing tools to keeping overheads to a minimum. At the same time, he has not compromised any of the values that are important to good journalism, such as editorial independence, quality writing, and rigorous analysis. The tech gets out of the way while the writing shines.
Since revealing three years ago that he had two thousand subscribers, Thompson has been cagey about his subscriber numbers, saying only that Stratechery is “more than a business” because that $10 a month scales very well. But it is clear that, as well as becoming influential in Silicon Valley, Thompson has built an exceptionally profitable media business on a simple foundation: email plus payments.
No need for ads. No need for scale. No need for the middle man. The model is so stripped back. So simple. So beautiful. And Thompson has been telling anyone who will listen that they should copy it.
The question is, has anyone actually been listening?