The Equity team dedicated this week’s discussion to three separate reports concerning privately held companies and their achievements. Recent reporting in The Wall Street Journal detailed Axios’s substantial growth and approaching profitability. The publication also revealed that Morning Brew could be acquired by Business Insider in a deal potentially worth $75 million. Simultaneously, we examined the announcement that The Juggernaut secured $2 million in funding for its subscription-based publication concentrating on news relevant to the South Asian community.

Consequently, the discussion proved to be quite enjoyable and detailed. It is consistently rewarding to acknowledge the accomplishments of fellow journalists pursuing success through diverse strategies, and this week felt like a significant moment for media industry news. Given our close connection to this subject matter, we’ve compiled our wider perspectives into this article addressing the evolving future of media.

Natasha Mascarenhas, a member of our team, explores the issues of disparity within the media landscape and who is positioned to thrive. Danny Crichton shared his strong opinions regarding digital advertising, and Alex Wilhelm commented on the encouraging nature of the diverse approaches to recent media successes.

Therefore, let’s take a moment this weekend to consider the emerging media environment, an area where private investment and media financial models have frequently been at odds.

Natasha Mascarenhas

Recent developments suggest that advertising remains a viable revenue stream for media organizations. Reports indicate Axios is projected to achieve profitability this year, and Morning Brew, a business-focused newsletter offered at no charge, is potentially facing acquisition by Business Insider in a deal valued between $50 million and $75 million. Both of these companies generate income through their newsletter offerings. This demonstrates that news isn’t solely vital to a functioning democracy—it’s also a commercially successful endeavor.

However, this isn't the complete picture.

Notably, one of the most encouraging media stories this week involved The Juggernaut, a news publication concentrating on South Asian topics and led by Snigdha Sur, securing $2 million in funding. Unlike Morning Brew and Axios, it relies on a subscription model for revenue. Importantly, it’s spearheaded by a woman of color with prior reporting experience in Bombay’s Bollywood scene. The Juggernaut’s ability to attract investment and gain a substantial subscriber base indicates that success isn’t limited to writers with access to substantial financial support from personal networks.

Joshua Rivera, a journalist with The Verge, rightly observed that the success of paid newsletters often depends on a writer possessing a pre-existing platform and, consequently, an established audience. I interpret this to mean writers who are traditionally privileged, though I won’t attribute that interpretation to him directly. Delia Cai, the author of Deez Links, echoes this sentiment, recently questioning why The Skimm hasn’t also attracted acquisition interest.

What steps can be taken to improve the situation? The solution is more nuanced than simply investing in outlets like The Juggernaut or seeking an exit strategy for The Skimm. Efforts are underway; Casey Newton, formerly of The Verge and now founder of The Platformer, has stated he is collaborating with Substack to establish a mentorship program aimed at fostering diversity within the newsletter industry. While this initiative is positive, it’s important to recognize that some underrepresented writers require not mentorship, but rather direct financial opportunities.

This is the viewpoint I wish to emphasize this week. We’ve observed three significant potential successes in the media landscape and gained insights into future trends. I applaud them all, but my focus remains on the one that suggests a future characterized by greater inclusivity.

Danny Crichton

The current advertising landscape presents a significant detriment to quality content. It diverts essential engineering and product development resources from enhancing user experience – a situation rarely welcomed by readers who find themselves confronted with intrusive display advertisements. Advertising also distorts the motivations of content creators, often pushing them to prioritize sensational headlines over substantive writing to maximize traffic. Furthermore, the extensive surveillance practices inherent in modern internet advertising surpass even the monitoring capabilities of historical security organizations.

(It is acknowledged that advertising revenue contributes to my compensation. This discussion is therefore presented on Extra Crunch).

Fortunately, this problematic system is facing increasing opposition from multiple angles. Users are adopting ad blocking software and technologies like Pi-hole at unprecedented rates. Apple is spearheading efforts to restrict third-party cookies and ad tracking, and despite a recent postponement, this direction appears inevitable. Simultaneously, legislative bodies and regulatory agencies worldwide are initiating investigations into major ad networks – notably Google and Facebook – with a growing likelihood of antitrust enforcement actions to address their dominance in digital advertising.

Moving away from personalized advertising is crucial for the advancement of the media industry. Emerging models demonstrate viable alternatives are already available. These models emphasize the creation of more engaging, valuable, and high-quality content aimed at discerning audiences.

Axios and The Morning Brew exemplify the potential of building substantial revenue streams through free newsletters. By cultivating focused niches across their offerings, they can provide advertisers with a highly targeted audience without relying on the extensive tracking methods currently required for effective advertising. These newsletters deliver a concentrated amount of content, typically featuring only a limited number of ad placements within an otherwise informative format. This approach fosters a cycle of quality improvement.

Platforms like Substack and other paid newsletter services are enabling media organizations to directly cultivate their own audiences, foster engagement, and successfully request payment for their content. This model proves particularly effective in areas of financial interest, such as startup news and analysis, or for topics that inspire strong passions, like anime or woodworking, providing a sustainable income for smaller, specialized teams.

The Juggernaut represents an intriguing combination, offering a free newsletter alongside a paid membership for exclusive content and perspectives. This strategy is effective because its community-building efforts are central to attracting and retaining readers, particularly within the South Asian community and beyond. Directly supporting journalism that reflects your interests and identity is a growing trend and a substantial improvement over the personalized ad-driven model of the past.

Finally, the future of events presents new opportunities. While more exploratory than newsletters or subscriptions, there is a clear demand for compelling digital experiences that facilitate connection among individuals with shared interests. As demonstrated by TechCrunch, people desire opportunities to build relationships and expand their knowledge within their respective industries, hobbies, and areas of interest. Media brands are poised to fill the void left by the decline of traditional community organizations.

The resources currently allocated to personalized advertising, often in pursuit of maximizing CPMs and avoiding direct reader payments, can be redirected towards building exceptional products. The media industry is now recognizing that personalization and privacy-invasive ad networks are not essential for profitability. Creating great products – a principle long-held in Silicon Valley – remains a viable and rewarding path to success.

Alex Wilhelm

What caught my attention while following recent reports concerning Axios (demonstrating impressive revenue increases and substantial growth), Morning Brew (a rising force in email newsletters achieving success and a business acquisition), and The Juggernaut (securing new funding for a subscription-based approach) was the variety of strategies being employed.

Axios relies heavily on newsletters, but it also operates a freely accessible website that I frequently visit for its content. Morning Brew concentrates solely on the newsletter format. And The Juggernaut functions as a conventional publication, though it utilizes a paywall. Remarkably, all three are thriving! This is encouraging.

It’s a common mistake to observe the current media landscape and assume everything is moving in a single direction. However, as our recent analysis of industry news reveals, this isn’t the case.

Expanding our view, we can identify further evidence of diverse business models succeeding within the media industry. For instance, the popular platform Substack has enabled both small and large publications to flourish. Furthermore, a collective of former Splinter writers recently transitioned their new publication from Substack to a dedicated website developed by Lede, a collaboration between the Alley agency and the Pico subscription service (additional details on Pico can be found here).

Increased competition among new publications utilizing different business approaches is something I wholeheartedly support.

Naturally, many aspire to replicate Ben Thompson’s success and establish a highly profitable, independent media venture. I also harbor ambitions that are equally improbable, such as attaining a height of seven feet and performing slam dunks while instructing deities in astral projection. However, exceptional cases shouldn’t be considered representative examples.

Fortunately, we are witnessing consistent and noteworthy achievements across a range of models and platforms for new and diverse media organizations.

This development fills me with optimism. While Natasha is correct in asserting the need for greater diversity among successful media entities, and Danny is right to point out the decline of a specific advertising type, their points don’t suggest that success will remain limited to a single demographic or that the demise of one ad format signals the end of advertising altogether.

I perceive more favorable trends than unfavorable ones in the current market, and given the challenges of 2020, I’m holding onto this positive outlook.