“If you’re still pursuing an online business strategy aimed at building impressions, you’re not going to make enough money,” says Dallas Morning News publisher and CEO Jim Moroney. That’s why the paper started a digital paywall.
And it’s why the NY Times is limiting non-subscribers to 20 free articles at its site each month and rolling out digital subscriptions for those who want unlimited access.
That follows News International’s move last year to charge for access to the online sites for Britain’s The Times and Sunday Times. Rebekah Brooks of News International said the decision to charge came “at a defining moment for journalism… We are proud of our journalism and unashamed to say that we believe it has value.”
Different paths to profit
Even if you’re not in the media game, its fascinating to watch these companies put a value on their efforts and move away from relying on ad sales. After all, getting customers to put money where their eyes are is the challenge for many tech companies too.
There are different – and sometimes conflicting – paths to success for publications. Cook’s Illustrated is doing great by taking no ads, charging for access to its recipes online, and staying away from food fashion. Consumer Reports gets taken seriously because of its clearly defined mission, extensive lab testing, and trustworthiness. By offering specialized business content, the Wall Street Journal has one of the most successful paid-for sites with about 407,000 electronic subscribers.
The New Yorker puts investigations of national security on the cover instead of celebs, yet it has the highest subscription renewal rate of any magazine in the country. A privately owned company, it is thought to be turning a profit of around $10m. Editorial decisions there are never made by focus groups.
If you wrote a plan for a magazine and said you thought you could make a profit by publishing 8,000-word pieces on the future of various African nations, hefty analyses of the pension system and a three-part series on global warming, hordes of people would laugh in your face…
No focus group is ever involved in an editorial decision. As [editor David Remnick] puts it, it doesn’t take a genius to work out that one hundred per cent of his readers are not going to get home from work, put their keys down and say: You know, honey, what I need to do now is read 10,000 words on Congo. ‘So you throw it out there, and you hope that there are some things that people will immediately read – cartoons, shorter things, Anthony Lane, Talk of the Town. And then, eventually, the next morning on the train, somebody sees this piece, and despite its seeming formidableness, they read it.’
A stripped down formula brings profits to The Week
And then there’s the success of The Week. Its inspiration: Time magazine’s first issue in 1923 which called for 100 articles – each one less than 400 words – in each week’s issue. That is just one of the many approaches The Week is taking that are completely different than other magazines…
Most weekly news magazines: Hundreds of employees.
The Week: 18 employees at the magazine, 15 at the site.
Competitors: Heavy essays.
The Week: 100 word news bites in simple language.
Competitors: Artful photo spreads.
The Week: Small photographs and minimalist graphics.
Competitors: Expand or reduce editorial content based on ad sales each week.
The Week: Limits the number of ad pages it sells to 20.
Competitors: Expensive reporting and guest columnists.
The Week: No bylines, content is synopses of reporting by other news organizations.
Competitors: Rely on both newsstand sales and subscribers.
The Week: Relies on subscribers for all but a tiny sliver of circulation revenue.
With this approach, The Week is profitable and growing steadily. It’s on track to make $6.3 million this year and its total circulation has grown by 5x since it launched in 2001. (It’s not doing any original reporting though, so you could make a case that it’s just piggybacking on the efforts of others.)
What’s funny is how those numbers aren’t big enough for others in the industry. Mark Edmiston, a former Newsweek president and founder of Nomad Editions, is quoted as saying, “This is not a multimillion-circulation publication, and that’s where you’re going to hit the profits…It doesn’t have a mass market appeal, nor do I ever think it will. It’s very difficult to generate a $30 million, $40 million profit when you’re that small.”
Newsflash: When you’re that small, you don’t NEED to generate $40 million in profit. That’s the nice thing about being small. 300 employees generating $30 million in profit – the multimillion-circulation publication model – is $100,000 per employee. With 32 employees generating $6.3 million, The Week is generating nearly $200,000 per employee. If you’re making twice as much per staffer as your competition, that ain’t too shabby.