Business of News: What Newspapers Can Learn From Digital-Only Services

By: Tim Gallagher

My bill for a long-subscribed sports magazine was charged to my credit card the other day. $44.95 was my quarterly bill for this periodical I have read since I was a boy. It often is delivered a day or two late (sometimes doesn’t come at all), frequently features a sport or athlete I do not follow on its cover and contains several pages of advertising I must parse through in order to find the table of contents.

In the past 30 days I have subscribed to three digital-only services: Medium for $5 a month, The Athletic for $3 a month, and a text-only service that provides 24-7 coverage of my favorite sports team for $3 a month.

That’s $11 a month for three services. I also pay about $30 per month for a print copy and digital service to my hometown newspaper and $15 a month for a digital subscription to the New York Times. Some friends think I should get more newspaper subscriptions, but there are only so many hours in the day, and there is Twitter and the AP News app on my phone and iPad.

My choices have changed, and each choice has an implication for the newspaper business.

NYM News is a text-only service about my favorite sports team—the New York Mets. (Yes, I am a glutton for punishment and you can dispense with the ridicule right now. I have already heard it.) Three sports journalism figures in New York—radio guys Rich Coutinho and Rob Brender, and blogger Michael Baron—offer a text-message service offering several updates a day, audio commentary and player interviews.

I could get most of these services by hunting around the web, but for 10 cents a day it makes sense to have these delivered to my phone. I never miss a note about my favorite team, even if they are out of the pennant chase on the Fourth of July. And—perhaps this is most important—I feel a personal connection to Mike, Rich and Rob because I hear their voices talking about a topic I am passionate about. Lesson: These are journalists who did not quit their day jobs but turned their coverage into a business.

Medium is on to something very newspaper-like. One of a newspaper’s greatest advantages is its “Serendipity Effect.” A reader strolls through its pages and an article unexpectedly catches their attention. It’s like finding a $10 bill in your pocket.

Medium has the same advantage. I linger on the site reading articles I did not expect to find. Many of Medium’s writers are freelancers. They are paid (if they choose to participate in the Partners Program) based on how many readers engage with their stories by applauding it on the site. Medium’s website says 14.3 percent of its writers earn more than $100 per month. At that pay, Medium clearly is built for those who love writing, not those who want a large bank account. Medium vets the articles before posting.

Their topics defy you to move on. In preparation for this column, I visited Medium many times and kept getting stuck by reading such articles as “Five Steps to Changing Your Life (They boil down to one thing),” “Digital Exile: How I Got Banned by A‌i‌r‌b‌n‌b‌,” and “Homeschooled to Hell and Back.” Lesson: Build from a newspaper’s strength. Serendipity matters.

The Athletic is the greatest threat to my $44.95-a-quarter magazine subscription. Some newspaper people are furious with The Athletic’s founders for poaching newspaper writers and readers, but if you can’t compete, then get better.

Launched by Alex Mather and Adam Hansmann, The Athletic has created more buzz than any subscription-only, ad-free site. The Athletic unbundles the daily newspaper by offering the section they think many people want and want only—sports. The Athletic says it has more than 100,000 subscribers and 120 staff and it is on its third round of investor funding, so it is not yet profitable. But the notion that you should take a specialty where you excel and offer that to customers at a premium is a strategy few newspapers have tried. Lesson: Take your publication’s can’t-live-without-it specialty and build a business model around it.

Tim Gallagher is president of The 20/20 Network, a public relations and strategic communications firm. He is a former Pulitzer Prize-winning editor and publisher at The Albuquerque Tribune and the Ventura County Star newspapers. Reach him at tim@the2020network.com.

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Published: September 25, 2018

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