How the Atlantic Went from Broke to Profitable in Three Years
wsj.com
wsj.com
I like The Atlantic well enough, and am glad it's not circling the drain like so many others. However, nothing in this article makes me believe they did more than reduce costs (aka lay off people) and extract more money from their existing pool of committed subscribers. That may not be the case, but I see nothing here that argues against that hypothesis. And I think it's safe to say that that would not be a good long-term strategy.
(I assume 'subscription growth' is subscription revenue growth, not necessarily the number of subscriptions, based on its use in the article)
Sure, what he did might not have been novel or revolutionary, but someone had to do it. And you only get one shot!
He sounds like his doing his best to lessen that burden.
I worked with a guy who moved up from an entry level job to director pretty fast. I trained him when he started, and when he made director I was working adjacent to his team, not under him (we had the same boss). The first time he had to lay someone off he asked me if I wanted to go to the bar afterward. It was not a celebration, it was depressed drinking. He occasionally said some things between long stretches of silence. Even though the decision wasn’t his, he felt a heavy burden of responsibility for those people’s lives, he was gutted having to lay someone off, and felt like he failed them… even when there was nothing he could have done, it was how the company operated. He never showed this at work, and always tried to appear objective and detached to some degree, but every layoff was like this, and he felt like I was the only person he could talk to. If I wasn’t there I’m sure he’d just drink alone and spiral as the guilt ate him alive. But to his employees, he was the jerk boss who laid off their co-worker and didn’t care.
I think you're right; jacking up prices on your existing subscribers can raise revenue, but if it means you never get any new subscribers, your company is even more doomed than it used to be.
This is something a lot of companies are learning. A lot of your current customers will pay a ton more, so better to dump the less committed customers and focus on the willing to pay niche.
Explains the decline of customer service in many ways. Unless you pay a lot of money, you probably are not worth serving well, as you weren't committed to the product in the first place.
By and large, people _will not_ pay if they don't have to and don't have to show their face. I could write about this ad nauseam, even the most ostensibly wealthy and honest communities, you still get something silly like 95% free 5% paying.
It's not even necessarily malicious, it's just that people have this deeply embedded feeling that they are entitled to digital content, without ever really thinking about monetization.
Why is this not a good long-term strategy? What is a better strategy? It seems like the alternative may well have been to go bankrupt and go out of business, and that definitely isn't a great long-term strategy.
I'm sure they know this, and want it to happen, but the bit about charging more and making it harder to read for free would seem to make it harder to get new subscribers on board. So, there's a reading that says their short term profitability is hurting their long term profitability.
I think the hypothesis is even harder to doubt if looked at from another angle. Namely that Thompson had guessed, correctly, that the services the Atlantic provides have been mispriced for a long time.
National- and international-focused journalism is relatively healthy. It’s also the least important part of the news media. Doing great? No. Still kickin’? Yes.
2nd-tier and lower city papers, and small town local papers (and tv journalism, too)… those are mostly dead already. Slowly strangled to death by technology, bought by private equity and gutted, or scooped up into giant propagandist media empires that don’t care about local issues and journalism, but about laundering their national agenda through “neutral” local outlets as a kind of astroturfing-adjacent activity.
Those were way more important, they’re already all but extinct, and there doesn’t seem to be a way to reverse the damage.
Laurene Powell Jobs buying Atlantic, Jeff Bezos buying Washington Post, Elon Musk buying Twitter.
At least with billionaire owners it's taken as read there is going to be some nuance.
Indeed, in the US many of the newspapers were started by political parties who used the papers to push their candidates.
Then the telecommunication act of 1996 happened and jettisoned a bunch of those rules “to foster competition”, which in fact predictably reduced competition. Later action prompted by the act (2003) made it even worse.
It has always been the case that rich & powerful folks tend to own media, but for a while we had pretty effective rules preventing any one entity from controlling too much of a given media market, which tempered that tendency. We got rid of much of that, with predictable results.
https://www.nytimes.com/2012/04/09/business/media/the-return...
A newspaper that read more like analytical research would be more appealing. The media would benefit as a whole, and prosper, if they strove to remove the personal opinions and beliefs from their reporting.
Going with Socratic method:
Did anything else happen the last 2-3 decades? Anything that would cause tree pulp, that could charge for ads and subscribers, and thus afford to pay more and subsidize longer research, less popular?
Or is it just that the media/journalism/etc., these large faceless groups, all just universally started making opinionated content 20-30 years ago?
I'm curious: what did media/journalism looked like 50, 70, 100 years ago. Maybe I could look up newspaper front pages from back then. Was it less opinionated?
Most people want their news in the form of stories, and especially stories about people they can relate to.
For similar perspectives but more even coverage I've been preferring The Nation, New Republic, and, to a lesser degree, Jacobin.
Atlantic annual revenue: $100 Million
For comparison..
NYT & WSJ: ~$2.4 Billion
I read revenue figure for Atlantic, was curious about how does it compare to NYT, WSJ, found those, got some sense of the publishing landscape, so shared that.
People are becoming too aggressive here.
> A core part of Thompson’s strategy was to figure out how much readers would be willing to pay for a subscription. He ended up raising subscription prices by more than 50%, and made it harder for people to read stories without paying
In my experience as a reader, their strategy change happened after the Biden election, because they lost a major source of demand gen.