Thinking About The News Business and TPM in 2019

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Over the last week I’ve seen a handful of those ‘predictions for 2019’ articles by people who write about journalism and the journalism business. So I thought I’d add my own take, with a special emphasis on our own plans for 2019 and how the two things relate to each other.

The Dismal Landscape of Digital Publishing

The news business is vast and variegated. But if we’re talking about the world of digital news, the trends are clear and relentless. All the movement is toward smaller publications, more focused on particular subject areas and niches and based (if at all possible) on dedicated and engaged relationships with an audience. Journalism trade writing is full of discussions about ‘audience’ and ‘engagement’ and lots of related mumbojumbo. But this is real, concrete and specific: only a robust and dedicated relationship with a group of readers (i.e., a real audience) creates any chance that those readers can become a direct source of revenue. Usually that means subscription revenues but there are a few other ways of going about it.

To make sense of this, it’s important to go back to the beginning of digital news publishing 25 years ago to understand some basic dynamics. Because barriers to entry are so relatively low in digital publishing, there have perennially been more publications than there are ad dollars to support them. So almost any publication that tries to draw a line against declining ad rates or resist intrusive ads or anything else can be replaced by the next publication that is willing to play ball. The investor Warren Buffet talks about a company’s ability to build ‘moats’ around itself and its business model – basically ways to lock in or perpetuate its competitive advantages against competitors. What is unstated in most discussions of the news business is that prior to the advent of the Internet the great bulk of the news business was based on daily print publications (i.e., newspapers) that exercised de facto monopolies over commercial speech in defined geographical areas. Virtually everything about the business and the profession flowed from this fact.

Moats have been extremely difficult to build online. Scale seemed like it might be a moat. But it wasn’t. Verizon’s announcement that it was writing down half the value of ‘Oath’, the division that includes what used to be AOL and Yahoo, tells the story. So does the collapse of Mic two weeks earlier. Downward pressure on ad rates became more severe as scaled social platforms took over more and more advertising with dramatically lower costs. And the final whammy came when investors became fully aware of these structural challenges to news publication, which lead them to cut off the funding that had been sustaining many of the big high-flying digital publications.

The exception in digital publishing has long been the subset of trade or specialty publications that have some specific and valuable kind of information that people really want and can’t easily get elsewhere. Unsurprisingly, they generally charge a subscription fee for access to the information. For these publications, some mix of scarcity and uniqueness is the moat.

This gets at the most irreducible foundation of digital publishing. A publication is only really valuable to people if they cannot easily replace it with something else. If it’s not easily replaceable, a publication can probably have at least some success selling subscriptions, even though there is an almost limitless supply of free things to read online. And here you see the direction a big chunk of digital media is going in. Rather than fighting for an ever diminishing slice of the advertising pie, smaller publications which are distinct (not just like every new entrant that pops up) and have a real relationship with an audience are trying to build businesses around that audience relationship. In most cases that means subscriptions.

TPM’s Membership Model

The changes I’ve described above haven’t helped us. In fact, they’ve hurt us a lot. Over the three years from 2015 through 2018 our total ad revenues dropped more than 50%. But there is a saving grace. The direction that almost all digital publishers are being forced to go in today are, as you can probably see, ones that play a lot more to our strengths (size, focus, audience dedication) than the old one (which put a premium on scale and access to investment capital).

Think of us as one of the small proto-mammals scraping our way in the late Cretaceous period. The meteor extinction event cataclysm was no great shakes for us either. But we turned out to be more suited to surviving in the aftermath than most of the bigger players. Another point of good news is that we’ve been moving aggressively in this direction for several years and we were a decent way in this direction when the latest industry crisis hit.

In 2019, subscription revenues of various sorts should account for just over 60% of our total revenues. I talk a lot about the individual parts. But let me explain the full picture.

We want all our regular readers to subscribe and become members of our community. We have three membership offerings with which we try to balance members’ different interests, priorities and ability to pay.

Prime is our core membership. Members get access to everything we publish, reduced ads and a variety of other features. It costs $4.99 monthly and $50 annually.

Prime Ad Free includes everything in Prime with all ads removed on every version of the site: desktop, smartphone, tablet, etc. Prime Ad Free will go on sale in early January. It costs $9.99 a month and $100 a year.

Inside includes everything in Prime and Prime Ad Free plus weekly Inside Briefings, TPM Events, the TPM Quarterly Report and other features. (Details here.) Inside costs $50 a month and $500 a year. Annual memberships are currently on sale for Launch Members and monthly subscriptions will go on sale next month.

You can purchase or upgrade to any of the above here. (Again, Prime Ad Free and monthly Inside memberships go on sale next month.)

Our Goals for 2019

Our relationship with our audience has always been central to our operations. That long predated TPM having any kind of business model or generating any revenue. From the first day TPM was focused on leveraging tips, feedback, reader comments and interaction with readers as the fuel for what we publish, how we get new information and how we navigate the news. In many ways we remain delightfully old school in using our main site email address – talk (at) talkingpointsmemo dot com – as the chief way we want to communicate with readers and get new information. This bred an audience relationship that has been priceless, enduring and something that never could have been created by design or for a business purpose. It’s why we exist, why we’ve been able to slowly build a subscription business over the last handful of years.

For many years though we simply didn’t have the resources or the time to make the site live up to the intensity and dedication of our readers. That has become increasingly important to us as our audience has become not only central to our editorial focus but central to our business focus as well. Paradoxically that has been especially the case over the last three years or so, even as our business has focused increasingly on subscriptions, because shifting our business model on the fly has been such an intense, all-consuming and relentless task that we just haven’t had time or the resources to do so.

So a key goal for TPM for 2019 is remaking the site to live up to our readers dedication to it. Some things are very concrete and mundane. The sign up and subscription settings features should be crystal clear, always work and be simple to use. We know that hasn’t always been the case. We hope to remedy that. The first sign you’ll see is a revamped sign up and account system that will debut early next year.

There’s also The Hive, our member discussion area. Over more than five years The Hive has built up a thriving set of discussions and its own unique culture. But it’s been a long time since we’ve been able to upgrade the software, add features that support the discussions and integrate it more into the rest of the site. That is another major agenda item for us in 2019.

Beyond this we simply want to make the site easier to use and improve it so that its design supports its substance.

That concretely means two things.

The heart of what we do as a news site is always been hunting for a handful of core stories we throw all our resources at and dog until there’s nothing left to dog in them. If you’re a regular reader you know that’s what we do. But the site needs to be better at visualizing those stories, organizing them, making them possible to track, catch up on, take stock of. Again, we want the site to better at supporting what we’ve always done as an editorial team. Would you like to see the site purely newest to oldest? Get updates via email when we publish something new on a given story. Different people have different ways they prefer to consume news. We want to make those options available to members.

TPM has also always been as much a community as it is a news site. (Most publications say this; for us it has the virtue of being true.) For us the two are really two sides of the same coin. Our readers like a certain kind of take on the news, a certain strategy for covering it and a certain relentless hunger for it. This has always been clear to me, vibrantly, because I read the emails you send. You get a sense of it when I publish a reader email or when you visit The Hive. But this should be built into the site in a way that is more continuous and visible. That too is a major goal of ours in 2019.

As you can see, each of these points fit together. Successful digital publications today are ones with real audiences. That means not just distribution systems or strategies for pumping your articles out on social networks but a group of readers who find your work important, not easily replaceable and make conscious daily decisions to be your readers. We were blessed to have this long before it became central to business viability. We plan to do everything we can to nurture it and cultivate it. Fundamentally that means remaining true to our mission to cover the news in the way do and expand our capacity to do so. But it also means making membership as seamless, painless and hard to do without as possible.

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