The Rebooting Show

On this week’s episode of The Rebooting Show, I spoke to Darren Samuelsohn, a longtime politician reporter who was most recently head of Insider’s ill-fated DC bureau. Darren and I spoke about his new newsletter devoted to journalism, the decision to take an independent path, and the topsy-turvy career that’s journalism.

Bill Bishop likes to make clear he’s not a journalist. Instead, he’s a China analyst who brings his deep understanding of the country to an English-speaking language through his newsletter, Sinocism. In 2017, Bill became the “original Substacker” after teaming up with Substack’s co-founders to be the first newsletter on the platform.

On this week’s episode of The Rebooting Show, Bill and I discuss his independent path, and how a subscription model has created different dynamics as opposed to his experiences in the dot-com era as a co-founder of Marketwatch. What’s telling to me is that Bill is also now considering advertising. The Substack model of “only ads” doesn’t make much sense long term for most writers. Even if they convert 10% of their audience, they’re making no money from 90%. Most businesses don’t operate that way.

The Dispatch is a three-year-old publication focused on bringing fact-based politics news and analysis from a center-right perspective. Steve Hayes, CEO of The Dispatch, joined the podcast to discuss how it's managed to climb to near 40,000 paying subscribers with a healthy 17 percent conversion rate from its free email list. Steve discusses the importance of aligning the editorial mission and business model, occupying the middle ground between the institutional media brands and the so-called creator economy, and its approach to introducing ads to The Dispatch. 

I had a conversation with Krystal Olivieri, global chief innovation officer at GroupM, about whether advertisers would conveniently forget all those promises they made during flush times to support local news. The takeaway: Advertisers will cut here and there, and that’s outside of the control of publishers, but news publishers can help themselves by having better ways of showing the value they’re creating for advertisers. Check out the full conversation on this week’s episode of The Rebooting Show, followed by a discussion of the year ahead with Outbrain co-CEO David Kostman. Thanks again to Oubrain for the support. Appreciate it.

Substack’s Reid DeRamus talks about growing newsletter audiences. Reid and I have spoken for the past two years on this topic, going back to before Substack bought his company Yem, which was focused on building a growth engine for newsletter writers. The thing about growth, at least I’ve found, is it takes a long time for most people. It’s taken me over two years to get 12,700 subscribers. I always tell people to take with a grain of salt the overnight success stories of newsletters that amass 250,000 subscribers in less than a year. They are remarkable because they are unusual, and the people running them are likely experts in marketing while most of us writing are not.

Recommendations is Substack’s No. 1 feature it has rolled out. It needed to provide that distribution function to publishers. Otherwise it would just be a newsletter CMS with Stripe integration. Recommendations are now responsible for 40% of new free subscriptions to Substack-hosted publications. Reid and I discussed that dynamic and other features Substack is rolling out to increase the number of people who covert to paid subscribers.

Scott Brodbeck got into local news a dozen years ago, after working in local broadcast news in Washington DC. “I looked at the direction of the industry and didn't love where local was going and ended up leaving and just on a total impulse to start my own site,” he said. “it was like a one day thing.” After this prototypical shower inspiration, Scott launched a local site to cover Arlington, Virginia.

Since then, Scott has built Local News Now into a clutch of local news sites for the Virginia suburbs near Washington, including ARLNow (Arlington), FFXNow (Fairfax) and ALXNow (Alexandria). The opportunity Scott saw was to make local news products that were different from the typical local news efforts from those coming from the newspaper industry. “The local news outlets that were focused on Arlington were meant for people middle aged and up, living in single -family homes and the more affluent parts of Arlington, Scott said of the time when he was in his 20s. “I wanted to launch something that was gonna speak to people my age.”

In 2016, Max Kabat and Maise Crow moved to Marfa, a small arts town in west Texas, and a couple years later made a bold call. They bought the local newspaper, The Big Bend Sentinel. Ever since, they've been building out their take on a sustainable local news model by pairing the weekly newspaper with a cafe and events space. Max and I discuss the model, the challenges of operating entwined but separate businesses, and whether this could be a blueprint that could work in towns with similar characteristics as Marfa, a tourist town that attracts a flood of visitors every year. After all, most towns in America aren’t featured in Vogue.

There’s the understandable urge to “do something” to fix the difficult situation the news business finds itself in. Government intervention in markets has historically been less common in the U.S., but we’re in a time of aggressive industrial policy becoming the norm with measures like the Chips Act and the climate bill.

Enter the Journalism Competition and Preservation Act, a bill that was attached to the defense bill winding its way through Congress. The JCPA would force big tech platforms to pay local news publishers for the privilege of sending traffic to these publishers.

The measure, which at the moment has been removed from the defense bill although it could always get added back in upcoming the back-and-forth, has proponents who claim that it is a “lifeline” to local publishers by sweeping aside antitrust restrictions to allow them to collectively negotiate terms with big tech platforms like Google and Facebook parent company Meta. Detractors see a cash grab by local news chains that are often run by deep pocketed private equity firms. For its part, Meta has threatened to exit exit news altogether if the measure passes.

On this week’s episode of The Rebooting Show, I spoke to Chris Krewson, executive director of the Local Independent Online News publishers group, to understand the possible unintended consequences to the bill, which Chris sees as mostly benefiting incumbents, many of which continue to cut journalists as a result of bad business decisions. It doesn’t help that many legacy chains are owned by private equity firms that probably shouldn’t need government assistance.

Joshi Herrmann is the founder of The Mill, a newsletter focused on Manchester – England, not New Hampshire, for those who call it “soccer” – as well as sister publications in Sheffield and Liverpool. Joshi started The Mill in June 2020, and across the three newsletters, the company has 45,000 email subscribers and has converted over 7% to paid subscribers. The Sheffield Post has 12,000 email subscribers and has managed to convert an impressive 950 to paid, according to Joshi. The company is near profitability with a small full-time staff augmented with freelancers.

The common knock on the newsletter model applied to local journalism is that it can’t scratch much beyond the surface, and it tends to be mostly aggregation of original reporting still done by local newspapers, however depleted they are. The Mill and its sister titles are leaning on original reporting and in-depth features as opposed to just aggregation or fluff about local events.

The Athletic started in 2015 with a simple proposition: It would produce the highest quality sports journalism with a subscription model that would align incentives with producing quality work vs chasing traffic. The approach wasn't without its flaws -- The Athletic consistently lost money -- but it did produce a differentiated, high quality product.  In January, The New York Times bought The Athletic for $550 million. Nine months later, the Times, which has proven that advertising can co-exist in a subscription-first model, introduced advertising on The Athletic. Sebastian Tomich, chief commercial officer at The Athletic and a Times veteran, joined me to discuss the advantages of building an ad model from scratch and how The Athletic is seeking to align brands with sports affinity.