A new group of media startups are focused on paid readers, not clicking pages

This week, the New York Times paid more than half a billion dollars for launching sports news that was launched five years ago. The paper also lost one of its star writers, Ben Smith, who is trying his luck with his monthly story.

Both movements are a sign of the times in digital media. In a region riddled with failed and hopeless dreams, new hopes add to what some officials say is the most important period of change for many years.

“We’ve gotten into some of the biggest challenges facing the TV industry, from start-ups and startups,” says Enders researcher Douglas McCabe.

This first generation is different from the ones that appear on the mid-2010s pages, which gave readers free access to reach more people. Instead, these companies believe that journalism should be paid for and that, thanks to social networking sites, private writers can form relationships with their readers, just as people do with an audience.

These teams were confirmed this week as The Athletic, a sports page founded five years ago by two former Strava gymnasts, sold for $ 550m. It was the second largest event in Times history.

“I joined [the Times] on betting that if you do the best thing that people can’t find elsewhere, they pay. I think many places confirm this, “Meredith Kopit Levien, chief of the New York Times, told the Financial Times.” There is a real market for people who pay subscriptions. “chasing the scales.”

Jon Kelly, former editor of Vanity Fair who co-founded Puck, a self-published book on business and politics, believes this is the “biggest disruption to the market in 20 years”. Puck raised $ 7m from investors including TPG to recruit a few leading journalists, each with a stake in the company.

Editors, writers and viewers have been discussing the future of journalism for two decades, when the internet disrupted existing systems. Venture capitalists ran new ventures from 2014 to the end of 2016, when investors in Silicon Valley poured in hundreds of millions of dollars by launching online TVs at exorbitant prices.

BuzzFeed, which achieved viral success with stunt videos such as melon blasting and rubber bands, was valued at about $ 1.7bn in 2016. recruitment and dismissal on digital media organizations that rely on digital marketing, such as BuzzFeed and Vice.

BuzzFeed last year wanted to go public through a special targeting company at a cost of $ 1.5bn. However, after writing on Nasdaq in December, its share price plummeted, counting the group at $ 670m on Friday, a mere 1.2 cents a year.

By comparison, Axios, a startup founded by former Politico journalists, was recently priced at $ 430m in revenue, about five times its annual revenue. German publisher Axel Springer last year took Politico $ 1bn, and about five times its annual cost. The New York Times sells for $ 3.6 billion a year.

Vice Media, like BuzzFeed, has also hit the world. At its peak in 2017, Second was worth $ 5.7bn by Investor TPG. Just two years later, another salesman – Disney – wrote all his work for the company. That same year, the Deputy purchased the Women’s Refinery29 pageant in a separate agreement; the companies paid the price of their combined units about four times a year.

Jessica Lessin, who in 2013 co-founded The Information, a Silicon Valley senior management journal, said the project had reached a “good point”.

“There was a time when investors were running as fast as they could away from the issue [companies]. Then we had a section that Andreessen Horowitz sells BuzzFeed . . . tech was a little harder to spend the money in the river, “he added. [investors] they might have been running around the fence or writing big checks. ”

In addition to Puck, some journalists recently want to make their own articles.

Richard Rushfield, who previously worked for the Los Angeles Times with Gawker, last month fired his shots. Hollywood storiesentering a new business; Lessin has donated money.

Some journalists from Politico – founded by former Washington Post journalists – last year quit their jobs to produce Punchbowl News, and paid readers $ 300 a year to find out about “Washington people who make decisions”.

Prominent journalists including Bari Weiss and Andrew Sullivan have resigned from the major media outlets Ingredients , a platform where they can print themselves and charge readers access to their mail. The top 10 subscribers on Substack plus make more than $ 20m a year, beyond regular payments.

But overall there is very little money going on in digital art compared to 2010s. Capital Venture last year invested $ 115m in digital publications, a tenth of the $ 1.1bn it contributed in 2015, according to PitchBook data.

The incompetence of the BuzzFeed market reflects the skepticism of other types of businesses; almost all those who deposited money from his Spac wallet fled the list before last year.

However Justin Smith, former Bloomberg Media CEO, who starting a companyand Ben Smith, told FT that he was “overwhelmed with interest” from investors this week. He declined to name any of them, and offered to pay for the operation, but kept talking about the opportunity.

“Netflix was a real pioneer who recognized these audiences on the content… This global approach. The same people, these audiences, all share the same interest in great entertainment. planets. What did not happen, “he said.

It is too early to say how much space all these registrations are in the consumer budget. Online subscription to Knowledge costs $ 39 per month, more than it could cost to sign up for the fun games of Netflix, Disney Plus and HBO Max plus, even look for those with big wallets. News printing is still a declining business, and even a successful story like The Athletic is wasting money.

Lessin warned: “Creating a media organization is a daunting task. “It’s not a business for the weak.”