The Media Today

Politico, Vice, and the circular digital-news story

August 27, 2021 By Jon Allsop
 

In 2019, Andrew Curry profiled Axel Springer, a private-equity-backed German media titan, for CJR. Founded in the 1940s as a newspaper publisher, Axel Springer had, since the mid-2000s, achieved a successful transition to the web that, as Curry wrote, “few other media companies have managed”—scaling back its print output while launching or acquiring a range of digital properties. Those included classifieds and established media brands such as Insider, a US news site, and a fifty-percent stake in Politico’s European edition. Ulf Poschardt, the editor of Die Welt, an Axel Springer paper, told Curry that the company’s mantra wasn’t “digital first” but something “even firster. More first. What’s even more first than first? Super first. Hyper first.” Julian Reichelt, the editor of Bild, Welt’s tabloid sister, said his paper was pushing into video, producing live broadcasts and slick documentaries. He described the pivot as “Project Netflix.”

Since Curry wrote, Axel Springer has expanded further into the US market. Late last year, it acquired Morning Brew, a newsletter company. In recent weeks, speculation swelled that Axel Springer was in talks to acquire one or another agenda-setting DC news site. It was said to be in talks with Axios, but those broke down. Then the Wall Street Journal’s Benjamin Mullin reported that Axel Springer was preparing to acquire all or part of Politico from Robert Allbritton, the current owner. Yesterday, that deal was finalized: Axel Springer will buy Politico’s entire operation—including Protocol, a tech site that Allbritton founded last year—and the remaining half of Politico Europe. Mathias Döpfner, Axel Springer’s CEO, called Politico a “true North Star” of digital journalism; Allbritton, who is staying on as publisher of Politico and Protocol, said he’d realized that a global media behemoth would be better able than his family business to grow the sites. The deal was reportedly worth more than a billion dollars—a figure equivalent to five times Politico’s annual revenue. When a reader asked Mullin how that amount compares to other recent media sales, Mullin replied with a Larry David GIF: “Pretty, pretty, pretty, pretty good.” 

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Politico’s price—and Axel Springer’s interest—reflects its reputation as a success story for digital media. (In business terms, anyway; many peers loathe its journalism.) Since Politico’s debut, in 2007, the site has consistently been profitable, thanks in no small part to the high-end subscription products it markets to lobbyists and other close watchers of the DC political and policy scene. (Much of Politico’s output is free, and will apparently remain so after the acquisition; when a staffer asked yesterday whether Axel Springer plans to institute a broader paywall, Döpfner reportedly responded, “We’re from Berlin. We don’t like the concept of walls.”) Politico “recognized early on something airlines have known for a long time: It’s a lot easier to make a lot of money from a few of your customers than a little from everyone,” Nieman Lab’s Joshua Benton wrote yesterday; he also credited the site with pioneering email newsletters and scoopy, fast-paced online political reporting. This model, though, can’t work for everyone—and in many ways, Politico’s enduring digital success has been an exception rather than the norm.  “We ought to tap the brakes on all the ‘what journalism can learn from Politico’ stuff I’m seeing. The answer is, not much,” Aron Pilhofer, a professor of journalism innovation at Temple, tweeted yesterday. “Comparing it to your local newspaper.com is apples to oranges.”

As Edmund Lee and Lauren Hirsch wrote recently in the New York Times, sites like Politico and Axios, with their relatively niche but loyal audiences, sit at one end of a media-industry “barbell.” Legacy national newspapers with strong print and digital subscriber bases sit at the other end; ad-supported digital publishers are balanced precariously in the middle. With Google and Facebook hoovering up online ad revenue, it’s been tough for the likes of BuzzFeed, Vice Media, and Group Nine, which have all consolidated to remain competitive. Each has acquired competitors—HuffPost, Refinery29, and PopSugar, respectively—and each has recently explored, with varying degrees of finality, the prospect of going public via special-purpose acquisition companies, or SPACs. These arrangements, Lee and Hirsch write, come with fewer “regulatory hassles” than initial public offerings—but BuzzFeed, for one, cut its valuation as part of the process, setting a “bad precedent” for its rivals.

These maneuvers have often come with turbulence for staff, including rounds of steep layoffs. Yesterday, Vice Media let go seventeen staffers across Vice and Refinery29. The cuts followed an announcement that the company planned to reduce its written content by as much as half and invest more heavily in video. (Cory Haik, the chief digital officer, announced the layoffs in the third-to-final paragraph of a long email extolling positive performance stats on platforms like YouTube and TikTok.) Media-watchers groaned at the hellish circularity of Vice’s strategy—digital media companies have tried pivoting to video before, without finding a pot of gold at the end of the livestream. Vice also repeated a well-worn fallacy: that bosses are nimble at adapting to new formats but their employees aren’t, and need to be replaced. In a statement, the Vice union described the layoffs as a “macabre annual ritual” at the company. “We have worked in this industry long enough to know today’s metrics are tomorrow’s punch lines, and yesterday’s pivot is today’s clumsy tumble.”

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Yesterday, Kim Kelly, a journalist who was laid off from Vice in 2019, noted that the “only thing that got me through” was the support of the site’s union reps at the Writers Guild of America, East. It’s ironic, then, that the latest Vice layoffs came on the same day elections to the WGAE’s council opened for voting—elections of vital consequence to digital-media members. One slate has made the case that the pace of digital-media organizing in recent years has overwhelmed the union’s resources, presenting a conflict with its traditional goal of representing TV and movie screenwriters; an opposing campaign has vigorously disputed this—noting, among other arguments, the increasingly porous boundaries between digital media and old-school screenwriting. Kelly is a candidate on the latter platform, as is Sara David, a Vice employee; yesterday, David argued that Vice’s latest pivot to video should serve as a reminder that it’s an “increasingly common media strategy” to have staffers “write less for digital and more for other platforms,” and that all workers affected deserve union representation. 

Axel Springer has pledged to put Politico in a “hiring, not firing mode” once the takeover is complete. But management promises are never a guarantee, and—in the digital media industry, in particular—past growth is no guarantee of future success. Recently, staffers at Politico moved to form a union; Allbritton said that the decision was down to the newsroom, but also sent out a lengthy email detailing his opposition, arguing that unionization would be unfair to workers who don’t want it, introduce an adversarial dynamic, and make decision making “less creative and less fun.” Yesterday, a staffer asked what the takeover would mean for the union push. Allbritton reportedly replied that Axel Springer’s ownership wouldn’t affect the process—and he reiterated his stance: that a union would mean troublesome workplace bureaucracy.

Below, more on the media business:

  • We’ve seen this movie before: In 2017, Heidi N. Moore wrote for CJR that pivoting to video is a terrible idea. “Hundreds of journalists have lost their jobs while shiny-object-chasing publishers are no closer to creating cohesive video strategies to replace the traffic those writers were producing,” Moore wrote. “Publishers who pivoted to video have forfeited the majority of their hard-won native audiences in only a year of churning out undifferentiated, bland chunks of largely aggregated ‘snackable’ video. That’s no one’s idea of success.” Yesterday, Moore posted the article on Twitter with the message: “I literally cannot believe that pivoting to video is a thing again.”
  • Return of the SPAC: Yesterday, Forbes announced that it plans to go public through a SPAC deal. “The venerable business publication, owned by Integrated Whale Media and the Forbes family, said in a news release that it had reached an agreement to merge with Magnum Opus Acquisition, a publicly traded blank-check firm,” Katie Robertson writes, for the Times. “The deal, which values the combined company at $630 million, is expected to close by the end of the year or early 2022.”
  • Some bad local-news news: In 2019, CJR’s Andrew McCormick profiled Bklyner, a scrappy hyperlocal news site in Brooklyn, New York, that prized print as a means to sell ads and reach members of the community. Yesterday, Liena Zagare, Bklyner’s editor, announced that the site will go on hiatus early next month, with no set plans to return. Zagare cited a combination of financial struggles and personal burnout. “Since I never figured out how to get paid regularly for the many hats I still wear,” she wrote, “I cannot hire someone to fill in while I take the time off that I need to make sure that I, too, can be sustainable.”
  • Some good local-news news: Poynter’s Kristen Hare checked in with the Spokesman-Review, in Spokane, Washington, which recently revived its evening edition as an electronic paper for subscribers. So far, Hare reports, the endeavor has proven popular; the Spokesman-Review says that it’s seen significant growth in total pageviews and users of its e-edition, as well as a two-percent increase in digital subscriptions. “It wasn’t about How are we going to make this a bigger pie,” Rob Curley, the paper’s editor, said. “It was How are we going to hang on to the pie that we have when we know we’re going to continue to push subscription prices?”


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Jon Allsop is a freelance journalist whose work has appeared in the New York Review of Books, Foreign Policy, and The Nation, among other outlets. He writes CJR’s newsletter The Media Today. Find him on Twitter @Jon_Allsop.