Welcome! I'm Simon Owens and this is my tech and media newsletter. You can subscribe by clicking on this handy little button:
Why Wirecutter might go behind The New York Times’s paywall
Axios reported the curious news that Wirecutter, the product review site operated by The New York Times, is hiring for a position focused on paid subscriptions -- an indication that Wirecutter might end up behind The New York Times’s paywall, either as part of its main subscription bundle or as a standalone product (similar to its Crosswords and Recipes verticals).
The announcement left many scratching their heads. “The idea of putting it behind a paywall just seems bizarre,” tweeted Industry Dive’s Sean Griffey. “Doesn't that defeat the point? Do they want to recreate Consumer Reports?”
Indeed, installing a paywall would seemingly undermine Wirecutter’s core business model: embedding affiliate links within their reviews and taking a cut of whatever sales are made when readers click on those links. The company has been so singularly focused on that business model that it doesn’t even allow advertising on the Wirecutter site, lest it be perceived that advertisers can influence the reviews. So why would it seek to decrease the number of readers who are exposed to its affiliate links, especially given that, per Axios, the Times has seen a “surge in affiliate revenue thanks to people looking for new things for their homes during COVID, like office and cleaning supplies”?
I don’t have any special insights into the company’s strategy here, but I can think of a few reasons that such an approach would make sense.
First, there’s a way to design the subscription product so it doesn’t suppress traffic to the site. The Times’s paywall, after all, is metered, and my guess is that most casual Wirecutter readers don’t visit more than once a month -- its main utility, remember, only kicks in when you’re looking to make a large purchase. It could even optimize the meter so it doesn’t count toward users visiting via Google searches, thereby ensuring that the site remains free for the vast majority who use it.
Second, I think this strategy is possibly aimed at reducing Wirecutter’s reliance on Amazon. Earlier this year, Amazon announced that it had reduced affiliate fees it paid out to publishers, and while The New York Times received a carved-out exception to the cut, its executives are aware of how much power Amazon wields in online retail, especially as more and more consumers are starting their product searches directly on Amazon’s site, bypassing the rest of the web completely.
Wirecutter is especially vulnerable to Amazon’s whims because of how it approaches affiliate links. While some publishers could simply swap out links to a different retailer with higher affiliate commissions, Wirecutter’s revenue team told me back in 2018 that they choose retailer links based on convenience to the reader, regardless of whether that retailer even offers up affiliate revenue. Because Amazon often features the lowest price and the best deliverability options, Wirecutter is ethics bound to showcase it regardless of the affiliate payout.
My bet also is that Wirecutter misses out on a significant amount of affiliate revenue simply because there’s often a months-long gap between when someone first researches a product on Wirecutter and when they actually buy it; in those cases, Wirecutter doesn’t receive any credit for the purchase it helped drive.
My guess, based on reading interviews with various Wirecutter staffers over the years, is that the site has a base of extremely loyal readers, and its analytics team has spotted an opportunity to sell subscriptions to those readers without cutting into affiliate sales.
I’ve written recently about how the Times is one of the few publishers in a position to flex its muscle against the major tech platforms, and I think that’s what we’re seeing here. By launching a subscription product, it’ll be limiting its exposure to Amazon while creating yet another revenue stream in the process.
How this barbecue website built a thriving ecommerce business
AmazingRibs.com has the kind of diversified business model that most media companies would envy. It runs a membership program with over 15,000 paying subscribers. It sells programmatic display ads. It even published a bestselling book about the “science of barbecue and grilling” that continues to move copies years after it hit the market.
And it also runs a thriving ecommerce business, one for which its staffers submit grilling equipment to thorough testing before publishing reviews. Those reviews contain affiliate links for readers to buy the equipment, and those links drive a lot of purchases. According to Meathead Goldwyn, the site’s founder, affiliate ads were, until relatively recently, the site’s biggest revenue driver.
I recently interviewed Meathead about how he designed his product review process, who seeks out the site’s reviews, and why his affiliate revenue has decreased in recent years.
To access this case study and others like it, you need to become a paying subscriber to this newsletter. By doing so, you’ll not only receive these case studies in your inbox, but you’ll also be supporting the production of the free newsletter and podcast. You get awesome content that’ll help you in your career and you’ll be supporting an independent creator. Subscribe at this link and get 10% off for the first year:
Will we see more and more newsletter writers team up to drive subscriptions?
Longtime readers of this newsletter know I run a private Facebook group where I regularly interact with my readers. Recently I put out an open call on the group for people to ask me questions I can answer in this newsletter, and I hope to make it a regular feature. The first question comes from my friend Ben Cohen:
Can newsletter publishers band together to increase revenue/get benefits/provide referral traffic etc?
The short answer is yes. For years now, newsletters have engaged in mutually beneficial relationships where they agree to recommend each other to their subscribers. From what I’ve heard, this can be a quick way to scale your email list. I’ve never entered into any of these agreements myself, but I’ve noticed a higher-than-average signup rate when other popular newsletters link to mine. Which makes sense; someone who already subscribes to and reads newsletters is more likely to sign up for another one compared to the average internet user.
Now that we’re firmly in the era of paid newsletter subscriptions, we’re seeing some individual creators experiment with bundled subscriptions. Substack hasn’t built this functionality into its platform yet, but a group of four business newsletter writers built a workaround by establishing a separate Substack account that bundles all their publications together into a single digest. This bundled subscription costs $20 per month, which is less than what it would cost to subscribe to all four separately.
The idea is that the reduced price coupled with their combined marketing powers will generate more revenue in the long run than they’d see operating just on their own. Based on some of their tweets, the experiment seems to be working.
I think this is certainly a viable way for smaller creators to scale up their subscriptions more quickly than they’d be able to on their own. But I also think it can be a tricky arrangement; presumably you’ll be splitting the bundle revenue down the middle, so you’ll have to find someone who not only writes on a similar topic as you, but also has roughly the same sized audience. I can’t imagine that a newsletter writer with 20,000 subscribers would want to launch a bundle with someone who only has 1,000 signups and still split the revenue 50/50.
And what happens if you enter into an agreement with someone, drive subscribers to the bundle, and then your partner starts slacking off. Will the other writer still get 50% of all revenue into perpetuity even though they’re no longer producing new content?
So yes, while I think we’re going to see more and more bundles launched over the next year, I’d be extremely careful about who you partner with. Make sure to hammer out all the details for what’s expected of each party and what happens if someone doesn’t live up to their agreement.
3 unexpected impacts the pandemic will have on media
Larry Bruce asks:
What 3 unexpected impacts will the pandemic have on media, 5 years on?
So one thing I think will happen is we’ll see many publishers continue to leverage virtual events long after the pandemic is over. Most media companies weren’t all that focused on online events prior to Covid, but being forced to embrace them has opened their eyes to the opportunities they’ve missed out on by relying solely on in-person conferences.
Media companies will be much more diversified post-Covid. Yes, they were already trying to expand beyond online advertising prior to the pandemic, but the sudden drop in advertising revenue caused by the recession has accelerated that trend.
What else? Well, my hope is that you’ll see many more thriving independent creators than you otherwise would have. The pandemic has caused a lot of layoffs in the media industry, and many of those journalists have used these layoffs as an excuse to experiment with platforms like Patreon and Substack. While not all of them will be successful, I’m sure that some portion will see some traction and emerge from the recession as fully funded independent creators.
Will we ever see the death of print newspapers?
Kat Arney asks:
Will we see the complete death of print newspapers? If so, when? If not, why not?
I feel like we’ve been debating this question for at least 12 years. I remember when it was major news that then-NYT-editor Bill Keller admitted that some day the print version of the paper would no longer exist. Now it’s accepted as fact that print newspapers will one day go away, but nobody agrees on when.
Print newspapers have always felt like an anachronism to me for my entire adult life. I could probably count on one hand the number of print papers I’ve purchased, and I’ve certainly never subscribed to the print edition to a newspaper (I subscribe to the digital editions of several).
The thing is, I don’t know who does read print newspapers. You’d think it was my parents’ generation, but whenever I’m in public places like airports or train stations it’s not like I see a bunch of middle aged people thumbing through broadsheets. I have a few Millennial friends who subscribe to the print editions of newspapers, but most will admit they let the issues pile up unread each week.
My hunch is that very few people spend much time with print newspapers, and they continue to subscribe for the same reason some people still subscribe to AOL internet: out of inertia.
Want to ask me a question I can answer in this newsletter?
I have a secret Facebook group that’s only promoted to subscribers of this newsletter. I try to post exclusive commentary to it sometimes and have regular discussions with its members about the tech/media space. Go here to join. [link]
Amazon will compete directly with Spotify in the podcast wars
A few months ago I tackled the news that Amazon was commissioning original, exclusive podcasts for both Amazon Music and Audible. My assessment at the time was that Amazon wouldn’t be competing directly with Spotify for podcast dominance; rather it would stick to its stable of exclusive podcasts and offer them as an add-on benefit to its audiobook and music services.
To be fair, there was some precedent behind this analysis. In years past, Audible had commissioned original podcasts and placed them in a tab called Channels, and at the time it showed no interest in becoming an all-in-one podcast consumption app. If you wanted to listen to an episode of This American Life or Joe Rogan, you still had to fire up Apple Podcasts or Stitcher or Overcast. My educated guess was that Amazon didn’t want the headache of managing 1 million+ podcasts on its platform.
Well, turns out I was wrong in my prediction, because this week lots of podcasters received an email from Amazon inviting them to submit their podcasts to both Amazon Music and Audible.
From reading the email, it’s clear that Amazon seeks to avoid most of the mistakes made by Luminary with its launch. For one, it requires you to manually submit your podcast, wheres Luminary simply started pulling shows from their public RSS feeds without seeking permission first. This way it can avoid the inevitable bad PR when some podcasters publicly post cease-and-desist letters demanding their shows be pulled from the platform.
Also, Amazon’s email states that “both Amazon Music and Audible will stream your content directly from wherever you host it; we will not rehost your content.” If you’ll remember, Luminary landed in hot water when podcasters found out that it was hosting cached versions of episodes, depriving them of crucial listening data.
So yeah, Amazon’s attempting to become a full-fledged participant in the podcast wars! And with 50 million+ Amazon Music subscribers and millions of Audible users (not to mention the tens of millions of Alexa listening devices), it has the clout and the money to push pretty aggressively into the space.
Which is to say that you should definitely submit your podcast to Amazon’s index! There’s always that chance that you could benefit from a first-mover advantage as Amazon brings millions of new listeners into the podcast fold. Just as it was much easier to grow your channel on YouTube if you started it 10 years ago, you might see similar benefits to jumping into Amazon’s podcast listings before it gets too crowded.
“We believe in a song a month every month if you can — no more than six weeks without a new song coming out. The attention span on a song has shortened down so much." [link]
It's amazing that GaryVee has built an entire media empire by offering little more than repackaged inspirational platitudes. The guy has produced thousands of videos that are just variations on two or three themes. [link]
A good profile of the person behind Spotify's podcast acquisitions. [link]
Publishers are basically taking a page from Amazon's Prime Day and applying it to their own ecommerce operations. They're negotiating discounts with retailers and then promoting them via their own media properties. [link]
"We’re living in the golden age of the single-operator food letter." [link]
Do you like this newsletter?
Then you should subscribe here: