A decade ago, aspiring journalists could just think about journalism and leave the financial side to others. Now, to be a successful journalist you have to think like an entrepreneur and understand something about the business you’re in. You have to build your own audience, as distinct from that of your publication. You have to think about what kind of organization can support the work you want to do, with integrity and staying power.
Developing a new business model to support high-quality journalism was an essential part of the Slate experiment when we launched it in 1996. We wanted to see if the internet could help us break out of the pattern where serious magazines perennially lost money.
There have been some ups and downs, to say the least. In the early days, we had the lonely thrill of being “Web pioneers.” Back then, we developed some of the key forms and hallmarks of digital media: news aggregation, blogs, slideshows, the more personal, conversational tone of Web writing and headlines. In 1998, we were the first news site to try a paywall. In 1999, we were the first to get rid of one.
A land rush doesn’t mean serious journalism has turned into a great business. But talent and money flocking to our trade is preferable to a wholesale exodus.
Back then people weren’t even pessimistic about digital-only media—they were totally dismissive. Old media patted us on the head but didn’t take us seriously. In 1999, financial markets became irrationally exuberant about the Web. Huge sums were poured into preposterous projects. Microsoft had 35 Web magazines in addition to Slate, all long gone. Slate survived the boom-bust cycle because we had Microsoft’s backing, which insulated us from the grow-until-you-explode pressure of venture capital. We also had a healthy resistance to magical thinking. When people told Michael Kinsley, Slate’s founder, that we could do an IPO at a valuation of $100 million, he didn’t take it seriously. We had taken on the much longer-term project of building a viable business.
After the tech bubble popped, people became gloomier than ever about digital content, and about the business of serious journalism in general. By 2009, The New York Times, The Washington Post, The Wall Street Journal, Financial Times, The Guardian, The New Yorker, The Atlantic, Time, Newsweek, and The New Republic all faced eroding print audiences and rapidly shrinking revenue bases. It was around that time that, after a career as a writer and editor, I found I had the greatest sense of mission about fixing the broken financial model of journalism, or at least trying to enlarge the space where great editorial content could succeed as a business.
Five years later, the picture has brightened considerably. Nearly all of those legacy publications have found models that seem to support their continued existence. The New York Times’ solution involves weak content restriction. The FT’s is strict restriction. The Guardian’s is a charitable trust. At The Washington Post and The New Republic, it’s new, wealthy owners. The Atlantic has an events business. At The New Yorker, it’s dramatically higher subscription pricing.
Lately, tech investors who used to want nothing to do with content creation have stopped regarding “editor” and “writer” as dirty words. The breakthrough was The Huffington Post’s $315 million sale to AOL in 2011. Since then, BuzzFeed, Vox, Vice, Business Insider, and Upworthy have all attracted rounds of investment. David Bradley has created The Atlantic Wire and Quartz. Instead of bailing on The Daily Beast post-Tina Brown, Barry Diller is putting more money into it, and has also invested in the Atavist, one of new several sites devoted to publishing long-form journalism. Investment has been flowing lately to digital media ventures on the mere promise of explosive growth: Medium, which is backed by two of the co-founders of Twitter, raised $25 million; ESPN is funding Nate Silver’s FiveThirtyEight; Vox Media has made an “eight figure” commitment to Vox, Ezra Klein’s new project.
There has been an efflorescence of not-for-profit start-ups as well, in categories of journalism that probably aren’t independently viable—state and local reporting, where the Texas Tribune has broken ground, and investigative reporting, where ProPublica and the Center for Public Integrity have created a new model. Also in the investigative category is Pierre Omidyar, the founder of eBay, who is putting $250 million into First Look Media, his venture starring Glenn Greenwald. This is an insane amount of money; chances of success would be 10 times greater with one-tenth the cash.
Marc Andreessen, Silicon Valley’s most influential venture capitalist, now thinks the news business has the potential to grow “10x-100x” over the next 20 years. Journalism school was an expensive ticket into a dead-end profession five years ago. J-schools weren’t graduating people with strong digital skills. Now they are, and getting professional journalism training is probably more valuable now than at any point in the past.
There are still two distinct views of what’s going on here. Felix Salmon recently made the optimistic case in Politico Magazine (another excellent launch). Salmon argues that the boom in data-based journalism exemplified by Ezra Klein, Nate Silver, and David Leonhardt’s Upshot Project at The New York Times holds real promise. He points out that this kind of substantive, non-ideological “wonk” journalism creates an appealing environment for corporate advertisers. Rather than too much competition in too small a niche, Salmon sees the supply of high-quality journalism creating its own demand.
The pessimistic view comes from USA Today columnist and curmudgeon Michael Wolff, who sees a chronic oversupply of digital content. Falling CPMS, he argues, won’t pay the costs of real journalism. Wolff thinks we’re in a kind of race to the bottom, in which more and more traffic becomes less and less valuable. Take The Huffington Post. It’s the biggest news site in the US, it doesn’t pay most of its contributors, and it continues to lose money for AOL.
I’m somewhere in between these views, but closer to Salmon’s. A land rush doesn’t mean that serious journalism has suddenly turned into a great business. But talent and money flocking to our trade is surely preferable to a wholesale exodus. On balance, I think that the better of the new sites will find niches that are habitable over a longer term, just as many of the legacy businesses now have.
Slate is a funny in-between place—like legacy media in some ways, like a start-up in others. The past several years have seen steady expansion in the size of our audience, our editorial ambitions, and our revenues. Today, Slate supports a staff of nearly 100 people. I think we’ve shown what the newer, buzzier sites have yet to do: that high-quality content can work as a business.
But how can a mature site like ours compete against start-ups that are more technology-centric than we are, flush with cash, and that don’t need to turn a near-term profit? It sometimes seems unfair to me that we need to actually make money while all our competitors need to do is get bigger. But profitability has imposed valuable discipline on us and keeps us focused on the larger societal problem of paying for high-quality journalism.
Slate also has some distinct advantages I wouldn’t trade for those of a startup: We have a stronger voice, a culture that lets individual contributors shine, and ownership that supports our journalistic values. Our head of technology has a nice way of putting it. He says that we have an editorial culture that’s adapted to the needs of the business without being subsumed by it.
HuffPo, BuzzFeed, Vice, and others are investing in news coverage. The problem is that journalism isn’t the ultimate value and purpose of what they do, the way it for us. The owners of those businesses haven’t shown that they value independent journalism the way the Graham family, which owned The Washington Post until it sold to Jeff Bezos last year, always has (The Graham Holdings Company still owns Slate). They’re also too founder dependent. There’s no HuffPo without Arianna, no BuzzFeed without Jonah Peretti, no Gawker without Nick Denton, no Business Insider without Henry Blodget.
In almost every area I can think of, competition from digital newcomers has been good for Slate. In broad terms, they’ve prompted us to develop a culture around data, analytics, and testing. You can see this reflected in Slate’s traffic growth, which is the fastest we’ve had since our earliest days. We had 31.6 million unique users in March, up from half that in September 2013. To benefit from generational and behavioral changes, we’ve had to think like a tech company, with a redesign geared to mobile reading and sharing. Unlike at most legacy media companies, Slate’s journalists are engaged in the project of building a sustainable business.
Our business model, like those of our competitors, continues to evolve. Historically, the most durable publications have had multiple revenue streams—advertisers and readers. Slate is too dependent on advertising. So we’re trying to figure out how to get money from our readers, but without a paywall, because we like having a massive audience and fully participating in the digital conversation.
Our latest experiment is a membership program called Slate Plus. Though we’re for-profit, it’s partly an NPR-style pitch: support the journalism you love. But it’s also like Amazon Prime: We’re thinking every day about what new benefits we can provide to our most loyal customers. The goal is to be thriving for another 18 years and beyond. The challenge is to think like a start-up while building an institution.