The Atlantic’s winding path to profitability

Its massive investment in expanding its journalism led to a surge in subscriptions, but it's still $35 million in the hole.

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The Atlantic’s winding path to profitability

The Atlantic’s paywall strategy has been a resounding success story these past few years, with the magazine announcing massive subscriber growth whenever it published blockbuster stories about Donald Trump. Its exemplary coronavirus coverage, despite being placed in front of the paywall, was also a big subscription driver.

But despite these impressive gains, it’s still not profitable, according to NBC:

The Atlantic brought in just under $75 million in revenue in both 2019 and 2020, according to Thompson’s presentation. Roughly $50 million, or two-thirds, came from advertising, events and other business-to-business revenue streams. But Thompson anticipated only incremental increases in this area over time, up to about $60 million in 2023. The bulk of new revenue will have to come from subscriptions, he said.

At present, The Atlantic has about 750,000 subscribers: Roughly 450,000 digital subscribers who signed up after the magazine launched its $50 paywall in 2019, and another 300,000 legacy print subscribers who pay $35 to $40 annually on average, according to Thompson. (The Atlantic is working to convert these legacy subscribers to full-paying digital subscribers.)

All told, annual subscription revenue in 2020 was less than $25 million, according to Thompson’s presentation. Buoyed by 2020, the company hopes to get that number to somewhere above $35 million this year.

Some important context here: after Laurene Powell Jobs bought a majority stake in The Atlantic, the magazine went on a massive hiring spree. It was actually generating $10 million in profit when she bought it, and the executives there made a calculated bet that they’d need to drastically expand their journalism ambitions if they wanted to build a successful subscription product. Think of it as The Atlantic’s Netflix strategy.

The Atlantic has a pretty solid history of media innovation. For decades it was a money-losing operation, but in the late aughts it was among the first legacy outlets to adopt a digital-first strategy (this was the Andrew Sullivan and Atlantic Wire era). The bet paid off when it reached profitability in only a few years — I remember it being a pretty big deal when it achieved its first profitable quarter in decades.

I’m pretty confident that it’ll achieve profitability again. Its brand is stronger than ever, and with Nicholas Thompson at the helm — he helped build successful subscription products at Wired and The New Yorker — it has the leadership it needs to see the new strategy through.

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Insider continues to grow

Axios reports that Insider Intelligence, which absorbed eMarketer a few years ago, is now a $60 million business. Add that in with with Insider’s advertising and subscription revenue, and the company is now pretty well diversified. It employs 500 journalists.

Private equity isn’t always bad for media

Adweek profiles Recurrent Ventures, which just purchased Mel Magazine. This is a private equity firm that seems to be actually investing in its media properties instead of taking every opportunity to slash headcount. From the article:

While private equity has become somewhat of a four-letter word in the media world, the field is not monolithic. Recurrent Ventures, in particular, has a track record of investing in its media acquisitions, expanding their headcount and using its custom technology to better support them.

Of its 14 acquisitions, only five have been under Recurrent Ventures management for close to a year: The Drive, Car Bibles,, Kitchenistic and Task & Purpose. Once the firm acquires a property, it migrates its content to Empire, a process that can take up to six months, meaning it requires time for newly acquired publishers to begin showing results.

Once a publication has been migrated, Recurrent’s custom ad network helps it boost margins, generating revenue more effectively in order to reinvest those funds into its sites. Of the four publications mature enough to track, The Drive and have seen the biggest gains.

Venture capitalists have homed in on the creator economy

The New York Times reports: "Venture capital firms have invested $2 billion into 50 creator-focused start-ups so far this year."

Unsexy content on YouTube thrives

CNBC profiles YouTubers who have built huge followings by vlogging about Microsoft software:

On the video service owned by arch-rival Google, a former Microsoft employee named Kevin Stratvert published a video on Presenter Mode to his more than 800,000 subscribers, garnering more than 180,000 views and hundreds of comments. Microsoft itself had not published a video on the topic.

“I’ve built a Microsoft audience,” Stratvert said in an interview with CNBC. “Microsoft content drives a lot more viewership than non-Microsoft content. I’ve done Gmail and a few others, but they haven’t done quite as well.”

You can build a huge following on YouTube with extremely unsexy content. In fact, the lack of sexiness probably gives you an edge, since there will be fewer competitors.

Podcast apps are still trying to develop an exclusives strategy

Could you ever imagine a Netflix original series being made available on Amazon Prime? Of course not. In fact, most major TV networks are now attempting to claw back their IP so they can distribute it exclusively on their own streaming apps; hence why Netflix lost the rights to The Office, Friends, and virtually every Disney movie. Hollywood reached the conclusion several years ago that growing a streaming app requires lots of exclusive content.

When Spotify acquired Gimlet Media for $230 million, I assumed the podcast industry was headed in a similar direction. Over the past two years, companies like Spotify, Apple, Amazon, and SiriusXM have collectively spent over $1 billion on both acquiring and licensing podcast IP. It seems only natural that they would use this IP to lock in users to their respective apps.

Except the strategy has been more muddled. Most podcasts from Gimlet, The Ringer, and Spotify’s other acquisitions are still made available on all podcast apps. While The Joe Rogan experience is exclusive, others like Michelle Obama’s podcast were openly distributed after a brief windowing period.

Spotify isn’t the only platform that seems to have mixed feelings about exclusives. A few weeks ago, Amazon acquired the rights to distribute a celebrity-led podcast for $80 million. In the announcement, it revealed its plans to window the episodes on Amazon Music for one week before distributing them on other apps. Then this week, it announced that Wondery, the podcast network Amazon acquired for $300 million, will sell paid subscriptions on the Apple Podcast app.

What’s the thinking behind this approach? Well, it could speak to dual priorities. On the one hand, these companies want to entice users into downloading and listening to their apps. On the other hand, they’re still mostly monetizing these podcasts with advertising, and that incentivizes them toward wider distribution. Amazon Music, for instance, still has a tiny podcast listening audience. Most of the platforms have also acquired podcast hosting and ad tech companies, so it’s clear their ambitions are to operate beyond their own podcast players.

In the long run, though, I think they’ll begin pulling more and more IP back behind their walled gardens. The podcast market is still pretty small, and there will be more incentive to lock users in once billions of dollars are at stake.

For now, though, we can continue to enjoy a podcast ecosystem that’s still mostly open. I don’t look forward to the day when I need to consume my favorite podcasts across multiple apps.

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Simon Owens is a tech and media journalist living in Washington, DC. Follow him on TwitterFacebook, or LinkedIn. Email him at For a full bio, go here.