Our Growth Amid Industry Layoffs


Early this week, Time Inc. laid off 300 employees across its properties. On Wednesday, Huffpost laid off 39 employees. Then later that day Vocativ, another digital media site, laid off its entire editorial staff. Huffpost’s layoffs were part of a much larger retrenchment (2,100 layoffs) at Oath, the new company which combines what used to be Yahoo and AOL. Both are now owned by Verizon. Yet, while this is happening, TPM is expanding.

I’ve been doing this for almost 17 years. In that time I’ve seen all the challenges of this very challenging business, digital news publishing. So I want to be crystal clear that this is anything but gloating or taking the remotest pleasure in the challenging transitions that others are having. I’ve been there. My point in raising this is that the difference – why we’re here and they’re there – is no coincidence. And the reason is you.

Allow me to explain.

Six weeks ago I wrote a lengthy post on TPM and the future of digital publishing in general. I discussed a number of trends and how they affect or don’t affect TPM. But the key point was that I see the future of TPM as a significantly subscription funded publication. Beyond that, I think we will see over the coming years that the idea of a digital publication funded solely by advertising is, while by no means impossible or unheard of, no longer the norm. This shouldn’t surprise us. This was the case at almost all points before the advent of the internet.

So what’s driving this wave of layoffs? Obviously each case has reasons unique to the particular companies and their histories. But there are three common and overlapping drivers.

1. Uncertainty and declining revenues from paid advertising: The digital publishing world has always been defined by an over-supply of publications relative to ad dollars. That essential fact has become dramatically more challenging as social networks (Facebook etc.) and networked mega-corporations (Google etc.) have gobbled up a growing number of the advertising dollars. As I noted in that piece from early May, one credible estimates says that 99% of the growth in the digital ad market in the last two years has gone to just two companies: Google and Facebook.

2. That disruption in the advertising industry for publishers has in turn dramatically constricted venture capital and private investment dollars as the viability and perceived potential value of digital publications has declined.

3. Acting in tandem with reduced investment dollars, there’s increasing consolidation to cut duplicative costs to become financially viable in this new reality.

Many of the big behemonth publications you’re familiar with have been trading on future profitability and value or the value they could drive for a larger legacy corporation. These three factors I’ve described have amounted to the music stopping in the game of musical chairs or, to put it differently, companies having to be solvent in the here and now rather than leveraging the future.

Now, one of the secrets TPM has always had as an organization is precisely our smallness. And I should be clear, to be fair, that when I say these other players are contracting while we’re expanding, their contractions are something like an order of magnitude or more greater than our expansion. That’s critical context and I don’t want to suggest otherwise. But one of the benefits of smallness as a digital publication is precisely that you cannot easily indulge the fantasy that you can buck the trends facing the industry. The big operations can stay in denial for some time. Sometimes until it’s too late. But small operations are affected first. So it’s critical to see what’s happening as far ahead as possible and act well ahead of time. This is why as a company we were vigilant and ready to move early to be ready to thrive in a new environment but also temperamentally careful and conservative. We wouldn’t still be here after seventeen years if we weren’t.

That’s why we started Prime back in late 2012. We saw this coming. The critical thing however is, as I said, you. Realizing that the future for many publications will be in having a substantial percentage of revenues coming from subscriptions is great. But that realization means nothing unless you have a loyal, committed audience. Page views, even hundreds of millions of them, aren’t an audience. An audience is a population of individuals who trust you, rely on you and would care if you weren’t there. That is why your trust and reliance on us, being TPM Readers, has been such a godsend. And I’m incredibly happy and grateful that over the last three years especially 2015, 2016 and 2017 you’ve made it possible for us to grow our subscription audience from 3,400 in 2014 to 21,000 today. As I wrote a few weeks ago, our goal is to get that number to 30,000.

We are affected by just the same winds and tides as those other players. But the shift in our business model and overall strategy has allowed us continue to grow, albeit in our slow, deliberate and incremental way, as others are slashing jobs. To be clear, this doesn’t mean we’re getting out of the advertising business. Our goal of 30,000 subscribers should put us near 50% of revenue from subscriptions. So the other 50% is still advertising. But the diversity of revenue streams makes all the difference. You’ve made that possible. That is awesome. I’m writing this post to capture what I know from being the publisher of TPM, but which may not be obvious at all even as a committed reader, which is just how critical your role has been.

Now, before I pitch you to become a subscriber yourself, let me add one more point that may not be obvious. At one level, dollars are dollars. It doesn’t matter where they come from. But in the real business world it doesn’t really work that way. Subscription revenue is highly reliable and highly predictable. So the growth of subscriptions has not only allowed us to thrive as others contract, it also allows us to be much more deliberate and considered as we plan for the future. I mentioned that we just made the first hire for our new Investigations Desk. (We’re hoping to have more hires to announce soon.) Being able to put new plans like that into affect is dramatically assisted by being able to plan things out months or years in advance.

Have I convinced you?

If you’re a subscriber, thank you. If you’re a regular reader who is not yet a subscriber, please consider subscribing right now. Just click right here. Don’t put it off until later. Just go ahead and do it right now. It’s that important. In the coming weeks and months we’ll be announcing new features exclusively for subscribers. But as I’ve explained above, even if those features don’t matter that much to you, please subscribe anyway. This is the future of quality digital news publishing. And I’m so glad you’ve made it possible for our team here at TPM.


Josh Marshall is editor and publisher of TalkingPointsMemo.com.