It’s been hard not to detect, over the past two years or so, a renewed optimism within the journalism community. After a half decade of media companies hemorrhaging jobs, we’ve seen a rash of new hires, both at traditional news outlets and new venture-backed upstarts. Though there are still pessimists in our midst, it’s hard not to look at Vice’s $2.5 billion valuation and conclude that the industry has turned a corner.
That’s why it’s somewhat surprising that a new journalism venture being launched by former New York Times editor Jill Abramson and journalist Steven Brill is being met with such disdain and mockery. Though it’s still in its early planning stages, Brill recently shed some light on the duo’s initial plans. The publication will be built on a subscription model and publish approximately one piece per month. The stories will be long — about 20,000 words each. They plan to market the stories by breaking them down into shorter standalone articles and publishing those on major media platforms (possibly Huffington Post). Subscribers would pay $3 or $4 a month to gain access to the stories. And here’s the kicker: They’re going to pay $100,000 per story.
Brill’s words were met with almost instant derision. “In other news, I’m also seeking investors so that I can pay myself an average of $100K per story,” tweeted Gigaom’s Mathew Ingram. “This has no chance but good luck,” wrote another. Late last year, Ingram did some back-of-the-envelope calculations as to how many subscribers the venture would need in order for it to work. He then noted the difficulties other media entities have had charging for online subscriptions. “To get an idea of what kind of challenge Brill and Abramson are facing,” he wrote, “we only have to consider that a well-established writer like Andrew Sullivan of The Daily Dish — who has one of the most successful personal paywalls in the industry — spent a year and barely managed to get to $1 million in revenue.”
But I don’t think these are apples-to-apples comparisons. Yes, within the context of short and medium length journalism, Brill and Abramson’s goals seem far-fetched. But those who criticize it are comparing its payouts to what’s typically paid for your average article in a newspaper or magazine. But given the length of the promised works, it’s much more accurate to analyze the venture within the context of the book industry, where $100,000 advances are quite common.
For $100,000 and the pedigree of the editors running it, they could lure top-tier journalists with already-established followings — think Malcolm Gladwell-level writers. As Brill hinted, they could also break the books up into standalone articles that would have viral marketing potential. The book industry has been doing this for years, generating genuine viral buzz around new releases by running excerpts in major magazines. For instance, Nicholas Carlson’s book was excerpted to much fanfare in the New York Times Magazine and Michael Lewis’s Flash Boys was excerpted in the same publication. Both likely contributed to word-of-mouth sales for these books.
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Based on back-of-the-envelope calculations, this venture would need to generate $1.2 million just to meet its editorial budget. If they’re charging the reported $3 a month subscription then they only need 33,000 paying subscribers to reach that. Let’s say they each want to pay themselves a $150,000 salary to start — that’s just 8,333 more subscribers, or about 41,000 subscribers total.
These are not unattainable numbers. We’ve seen numerous cases where journalists with significant followings have convinced a sizable number of their fans to pay for content access. As Ingram mentioned, there’s Andrew Sullivan, who amassed more than 30,000 subscribers. Ingram has also profiled Ben Thompson, a blogger who was a relative unknown just a little over a year ago and so far has gathered a little over a thousand “true fans” who pay about $100 a year to read a daily email Thompson writes. Brill and Abramson only want subscribers to pay $36 a year, about half the price of a subscription for a weekly magazine.
Now let’s say they reach 100,000 subscribers, the equivalent of a mid-level magazine (the New Yorker has a circulation of 1 million). Then that would generate $3.6 million a year, or $2.4 million when you subtract editorial costs. As long as they keep their editorial staff relatively lean, then that would be a hefty profit.
If I had one piece of advice for the two, it would be to recognize that these pieces can be marketed as standalone books, and so they should capitalize on publishing platforms offered by Amazon’s Kindle, Barnes and Noble’s Nook, and Apple’s iBooks. They can charge a slightly higher premium for buying a single title — say, $5 — and could even utilize POD options to offer a print version (especially handy if you want to send the author on a book tour where he can do signings).
You might recognize Brill as the author of America’s Bitter Pill, a recent hardcover book investigating America’s exorbitant healthcare costs. The book reached the New York Times bestseller list and will likely sell several hundred thousand copies. So if you’re skeptical about Brill and Abramson’s ability to launch a viable business selling high-quality journalism, ask yourself this: If Brill can get over 100,000 people to pay between $10 and $20 for his book, why can’t he get 100,000 people to pay only $3 for a book-length piece of journalism?
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Image via Reuters/The Nation