The largest creators are battling algorithm fatigue

PLUS: Why media companies like launching consulting businesses

Welcome! I'm Simon Owens and this is my media industry newsletter. If you've received it, then you either subscribed or someone forwarded it to you.

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Let’s jump into it…

Quick hits

This week I’m trying out a slightly different citation format for my quick hits. In addition to citing the name of the publication, I’ve also included the headline. My hope is that this provides additional context for any links you might click on. Let me know if you like this format by replying to this newsletter.

[CREATOR SPOTLIGHT: A newsletter I would email you if we were friends] This is a quirky idea for boosting subscriber retention: “If you buy a paid subscription to [my newsletter] … I will send you a handwritten thank-you note with a sticker. I love it. That's how I was raised, right? You send people thank-you notes. So, I'm just going to keep doing that through this business endeavor.”

It's kind of similar in thinking to my strategy of allowing paid subscribers to book a half-hour into call with me. My hope is that those people who take me up on the offer are far less likely to unsubscribe in the future.

[HOLLYWOOD REPORTER: For Creators, 2024 Is the Best of Times… and the Worst] Creators who already boast large followings claim that they're having a harder time getting their content to go viral. Not only is there way more competition, but it can be difficult to adapt to sudden shifts of algorithmic distribution on the major social platforms.

[CNN: The Atlantic is expanding its print magazine as it surpasses 1 million subscribers] Yet another major magazine reinvests in its print product. It seems clear that these executives have seen data indicating that a print edition somehow enhances the brand and helps it stand out in a highly saturated content ecosystem. Many of these publishers are positioning print as an add-on to a digital subscription.

[BUSINESS INSIDER: PayPal enters the ads game, led by an architect of Uber's $1 billion advertising business] It's pretty much a law of the internet at this point that any sufficiently scaled tech platform will eventually start selling advertising. If the users are showing up anyway to use the product, why not grab the low-hanging fruit and monetize them further?

[GEEKWIRE: Amazon bets big on sports streaming in bid to boost Prime memberships, advertising revenue] Over the long term, I just don't see how ESPN and other Hollywood studios compete with huge tech companies that technically don't need their sports broadcasts to turn a profit. A decade ago, the sports leagues were hesitant to sign away broadcast rights to streamers because they didn't know whether audiences would embrace them. But now that the dam has broken, there's nothing holding the Amazons and Apples of the world from outbidding Hollywood on every sport that matters.

[PRESS GAZETTE: Financial Times exceeds £500m annual revenue for first time] The Financial Times has always impressed me with its 100% focus on just producing indispensable business news. This not only allows it to charge a high amount for a subscription, but also ensures it amalgamates an audience that just about any upscale brand would want to reach with its advertising budget.

[NEW YORKER: Taylor Lorenz’s Plan to Dance on Legacy Media’s Grave] Taylor Lorenz "no longer sees a reason to remain associated with the mainstream media. 'I don’t need it for credibility,' she said. 'I don’t need it to reach an audience. I don’t know what it does other than connote prestige for a shrinking amount of people ... Legacy media sucks, it’s crumbling, and, by the way, I’m going to dance on the grave of a lot of these places.'"

[THE VERGE: X will pay its Premium users to engage with each other] While it's great that Twitter is sharing revenue with its creators, its incentive structures just strike me as being way off. The main benefit of being a paid subscriber is to be able to opt into its revenue sharing program, which means all of its creators are just competing to take more money out of the system that they're paying into it. Feels almost like a pyramid scheme in that regard.

How State House News charges $4,000 for access to its journalism

For much of its 130-year existence, State House News operated as a standard newswire service. Its journalists covered the Massachusetts state government, and it then syndicated their content to regional and national newspapers. 

But in the late 90s, owner Craig Sandler realized that internet distribution would allow him to sell direct digital subscriptions and vastly expand his customer base. Today, the service charges $4,000 a year to any company or organization whose business is directly influenced by the state’s government.

In a recent interview, Craig discussed how he built the direct subscription business, why he decided to sell a majority stake in the company, and whether State House News is shielded from the whims of large tech platforms and AI chatbots:

The elevator pitch is that we are is the Associated Press on steroids – for Massachusetts state government. The government affairs professionals who absolutely live and die on high quality, unbiased, in-depth information about the state government, live and die by the Statehouse News Service.

More quick hits

[SEMAFOR: Crypto media darling Blockworks launches consulting business] Media companies like launching consulting businesses because they can be great for generating cash flow. The problem is they don't scale very well because you usually have to increase head count in order to grow.

[BUSINESS INSIDER: The influencer middle class is feeling the pain as marketers turn toward superstars] My general sense is that marketers would love to work more with micro-influencers because it allows brands to place more bets across a greater number of channels, but at the end of the day those marketers are lazy and so will always default to scaled reach.

[PRESS GAZETTE: The Independent set to double profit and revenue over last five years] The UK newspaper The Independent shuttered its print edition back in 2016. It's since more than doubled its revenue. Its video vertical is now generating 100 million views a month just on its own website.

[ADWEEK: Perplexity Is Referring Modest Traffic to Publishers, Even to Those Who Try Blocking It] It turns out at least some people click on the citations in AI summaries: "Forbes, the news site benefitting from Perplexity’s referral traffic the most, per Similarweb data, received 236,300 visits from Perplexity in August 2024, up from 10,800 in August 2023. The New York Times followed with 96,600 visits, an increase from 11,600 visits year-on-year. The Guardian saw 76,800 visits, a rise from 6,700 visits in August 2023."

[MEDIA VOICES: 7 lessons from a year of paywalled podcasts at The Economist] Most large publishers keep their podcasts 100% free even as they try to grow their subscription revenue. My guess is it's because they're skeptical that people will pay for podcasts. But The Economist moved most of its podcasts behind a paywall a year ago, and they've been a major boon to its subscription growth.

[BUSINESS INSIDER: Zara's website is a confounding headache — but it's also the secret to its success] Zara's website behaves more like a fashion magazine than a retail outlet — prioritizing content over an easy-to-use ecommerce UI. But the strategy seems to be paying off: "Sales were up by 10% in 2023 and have continued to grow in 2024, with its stock up 35% this year."

[PRESS GAZETTE: Why FT, Politico and Racing Post charge big for online news] Subscriptions for Politico PRO, which cost upwards of $12,000 per year, now account for 60% of Politico's overall revenue. A few years ago it was half of revenue.

[FINANCIAL TIMES: London-based The Independent bets on US expansion] It makes sense that nearly every major UK newspaper is expanding its US operations — it represents a much bigger English-speaking market, and there's a lot of upside as long as the expansion doesn't happen too quickly.

Please don’t take my newsletter and podcast for granted

At least once a week, I get contacted by an organization that wants to hire me to work with them on a contract basis to improve some aspect of their content operations. I used to make a living with this type of consulting, but now I turn away almost 100% of these inquiries and refer them to someone else. 

Why? Because even though these types of engagements often pay well, they’re also pretty time consuming, which means they would subtract from the amount of time I spend on my newsletter and podcast.

But here’s the thing: the only way I can financially justify turning down this work is if I generate enough revenue through paid subscriptions. After all, I have an obligation to pay the mortgage and put food on my family’s table.

Which is to say that if you want to ensure that my newsletter and podcast remain an ongoing concern, please consider becoming a paid subscriber. Seriously, it’s only $100 for a full year, and if you’re using insights from my content to improve your own business, then that $100 pays for itself. And if you use the link below, you get 20% off for the first year: