The news startup, The Messenger, announced today that it is closing, effective immediately. This comes only a few weeks after a round of layoffs that made it seem that the site’s days were numbered. It does not come as a surprise. The first thing to say about this is the obvious one which is that a lot of journalists lost their jobs today. And, in addition to the personal shock and hardship entailed in anyone losing their jobs, journalists play a unique and important role in the civic and news infrastructure of society. So it sucks.
The Messenger was also a specific kind of failure. There is an uncanniness to it since it was perhaps uniquely predictable. In fact, it was so predictable it’s still a real mystery why the site was able to come into existence in the first place. This isn’t snark or crocodile tears. It’s a very strange story. This requires some explanation.
A decade ago the media story was scale. You build up a really big audience and then you run ads against that audience and the pageviews they consume. To a great degree it didn’t terribly matter how you got the audience. The bigness was the ticket to success. It didn’t entirely not matter. But mostly it didn’t.
Some sites like Huffington Post, somewhat notoriously, used all the gimmicks and bells and whistles and cat slideshows to get those big numbers. But for the most premium advertisers that wasn’t enough. So while a Huffington might be something like a boiler-room content farm, for most of its traffic it would invest real money in a comparatively small group of talented journalists to produce real journalism. That’s not where the traffic came from. But it was the brand face that made it possible to bring in premium advertising. Like a mullet, the joke used to go, all business in the front, party in the back.
The bulk of undifferentiated pageviews got monetized by programmatic advertising using third-party data for targeting. How you found that traffic came down to what became a quite specialized and fairly technical manipulation of social media sites to drive traffic.
So let’s review. Scale. Programmatic advertising. Social media distribution to build traffic.
The founder of The Messenger, Jimmy Finkelstein, used this basic framework very, very successfully when he took over The Hill. If it moved and had even the slightest chance of any kind of traction on social media, The Hill published a story on it. A clip of video, a story. A quote, a story. A bullshit viral narrative, a story. It was a true boiler-room operation and was mainly made up of dreck. They had a few real journalists for the mullet noted above. But this operation was pure boiler room. Ask no question, cash on the barrel. They made tons of money.
Since The Hill operated in the DC space, they also were able to make lots of money in the DC events business notwithstanding their iffy brand reputation. The Hill under Finkelstein’s management executed this model very, very successfully and made a ton of money and cashed out at just the right time. He sold The Hill to Nexstar for $130 million three years ago.
In fact, it wasn’t at just the right time. I was actually a bit past the right time. I get the sense the buyer realized the events business still had some choice. That business, largely built on what are in fact corporate lobbying budgets, was still worth a lot. Jimmy cashed out and made a bundle.
The problem is that that model I’ve described to you is dead.
Like completely, positively dead.
Social media companies no longer care about news. If anything it’s a brand risk. They’re not a big source of traffic. Nothing remotely like the glory days of a decade ago. The digital advertising market has also totally collapsed for news publishers. To speak very, very generally, the social media behemoths cut publishers out of the action. If you’re an advertiser and you want women in their 30s who are into crosswords and prestige TV you just go to Meta and advertise there. The problem has been compounded by changes in the ways sites are allowed to track people. The big point is that on every front, the business model of big sites with massive audience publishing nothing in particular but having a lot of eyeballs is totally dead. Obviously advertising still plays a role for publications. But a publication has to have a real purchase on a particular demo to be able to sell ads with any success and they almost certainly need to be selling subscriptions too.
I have written about these trends numerous times. And you have seen these trends in the evolution of TPM itself. I have a bit of pride that I saw a number of these trends before others in the industry did — really the only reason TPM still exists. But by 2023 all of this was totally known, totally conventional wisdom, what everyone with even a passing grasp of the news business knew. And yet The Messenger was launched, built and run entirely on that old premise and model. It was like watching someone jump out of an airplane with no parachute totally confident they had some new angle on controlled descent no one knew about.
Clearly, Finkelstein didn’t. The site launched with $50 million, hired 300 people and in less than a year it’s gone.
Everyone sympathizes with the journalists, many of whom left really good jobs to take a chance on The Messenger. They all got burned badly. They trusted Finkelstein and he abused that trust horribly. But given the sheer amount of arrogance and stupidity Finkelstein and perhaps even more his investors brought to the effort a degree of schadenfreude on the part of onlookers is perhaps inevitable. But for myself and I suspect most others in the media business it’s not really schadenfreude so much as shock and amazement and just standing back aghast that the thing ever happened. To extend my metaphor from above, it really is like if you were on a parachute jump and some cocky idiot just jumped out of the plane with no chute saying he had it covered and, obviously, plummeted to the ground died. You wouldn’t feel schadenfreude, though obviously dying is a lot more serious than lighting $50 million on fire. You’d just be slack jawed and amazed and feel sad about how needless and stupid the whole thing was. And that’s pretty much the story with and the appropriate epitaph for The Messenger.
