How the Atlantic Went from Broke to Profitable in Three Years(wsj.com)
wsj.com
How the Atlantic Went from Broke to Profitable in Three Years
https://www.wsj.com/business/media/how-the-atlantic-went-from-broke-to-profitable-in-three-years-03cc3b18
49 comments
I read a lot of hate online about how executives are evil, greedy, exploitative leeches. Here's a story looking at the other angle - this is a person responsible for the livelihoods of lots of people, and maintaining an American institution.
Sure, what he did might not have been novel or revolutionary, but someone had to do it. And you only get one shot!
Sure, what he did might not have been novel or revolutionary, but someone had to do it. And you only get one shot!
We never really know how the executives feel about the layoffs behind the scenes. Sure, some are done for greed, but a lot probably do fall into the category of sacrificing the few to save the many. Then there are those in the middle who need to deliver the news, who have to shoulder the burden, but are just doing their job.
I worked with a guy who moved up from an entry level job to director pretty fast. I trained him when he started, and when he made director I was working adjacent to his team, not under him (we had the same boss). The first time he had to lay someone off he asked me if I wanted to go to the bar afterward. It was not a celebration, it was depressed drinking. He occasionally said some things between long stretches of silence. Even though the decision wasn’t his, he felt a heavy burden of responsibility for those people’s lives, he was gutted having to lay someone off, and felt like he failed them… even when there was nothing he could have done, it was how the company operated. He never showed this at work, and always tried to appear objective and detached to some degree, but every layoff was like this, and he felt like I was the only person he could talk to. If I wasn’t there I’m sure he’d just drink alone and spiral as the guilt ate him alive. But to his employees, he was the jerk boss who laid off their co-worker and didn’t care.
I worked with a guy who moved up from an entry level job to director pretty fast. I trained him when he started, and when he made director I was working adjacent to his team, not under him (we had the same boss). The first time he had to lay someone off he asked me if I wanted to go to the bar afterward. It was not a celebration, it was depressed drinking. He occasionally said some things between long stretches of silence. Even though the decision wasn’t his, he felt a heavy burden of responsibility for those people’s lives, he was gutted having to lay someone off, and felt like he failed them… even when there was nothing he could have done, it was how the company operated. He never showed this at work, and always tried to appear objective and detached to some degree, but every layoff was like this, and he felt like I was the only person he could talk to. If I wasn’t there I’m sure he’d just drink alone and spiral as the guilt ate him alive. But to his employees, he was the jerk boss who laid off their co-worker and didn’t care.
I didn't mean it to be a harsh criticism. What I'm saying is that if my conjecture is correct, they will need some other strategy for sustaining The Atlantic long term. So, more like let's not write articles implying the job is done yet.
>this is a person responsible for the livelihoods of lots of people
He sounds like his doing his best to lessen that burden.
He sounds like his doing his best to lessen that burden.
It does, but on the other hand, especially after reading Bullshit Jobs, I'll argue that a business has something akin to a moral obligation to not create more roles than are actually needed to run the business.
> I see nothing here that argues against that hypothesis
I think the hypothesis is even harder to doubt if looked at from another angle. Namely that Thompson had guessed, correctly, that the services the Atlantic provides have been mispriced for a long time.
I think the hypothesis is even harder to doubt if looked at from another angle. Namely that Thompson had guessed, correctly, that the services the Atlantic provides have been mispriced for a long time.
> extract more money from their existing pool of committed subscribers.
This is something a lot of companies are learning. A lot of your current customers will pay a ton more, so better to dump the less committed customers and focus on the willing to pay niche.
Explains the decline of customer service in many ways. Unless you pay a lot of money, you probably are not worth serving well, as you weren't committed to the product in the first place.
This is something a lot of companies are learning. A lot of your current customers will pay a ton more, so better to dump the less committed customers and focus on the willing to pay niche.
Explains the decline of customer service in many ways. Unless you pay a lot of money, you probably are not worth serving well, as you weren't committed to the product in the first place.
This is painfully true and so many excellent sources suffer because of it.
By and large, people _will not_ pay if they don't have to and don't have to show their face. I could write about this ad nauseam, even the most ostensibly wealthy and honest communities, you still get something silly like 95% free 5% paying.
It's not even necessarily malicious, it's just that people have this deeply embedded feeling that they are entitled to digital content, without ever really thinking about monetization.
By and large, people _will not_ pay if they don't have to and don't have to show their face. I could write about this ad nauseam, even the most ostensibly wealthy and honest communities, you still get something silly like 95% free 5% paying.
It's not even necessarily malicious, it's just that people have this deeply embedded feeling that they are entitled to digital content, without ever really thinking about monetization.
> And I think it's safe to say that that would not be a good long-term strategy.
Why is this not a good long-term strategy? What is a better strategy? It seems like the alternative may well have been to go bankrupt and go out of business, and that definitely isn't a great long-term strategy.
Why is this not a good long-term strategy? What is a better strategy? It seems like the alternative may well have been to go bankrupt and go out of business, and that definitely isn't a great long-term strategy.
If the strategy is just to recognize there are n subscribers who are dedicated readers of The Atlantic and are unlikely to drop their subscription if you increase the price 50%, then this is a bad long-term strategy because those people will eventually die or drop off due to attrition. The long term strategy should involve successfully bringing in new loyal subscribers.
I'm sure they know this, and want it to happen, but the bit about charging more and making it harder to read for free would seem to make it harder to get new subscribers on board. So, there's a reading that says their short term profitability is hurting their long term profitability.
I'm sure they know this, and want it to happen, but the bit about charging more and making it harder to read for free would seem to make it harder to get new subscribers on board. So, there's a reading that says their short term profitability is hurting their long term profitability.
But "attracting young audiences" is growth in the number of subscriptions.
I think you're right; jacking up prices on your existing subscribers can raise revenue, but if it means you never get any new subscribers, your company is even more doomed than it used to be.
I think you're right; jacking up prices on your existing subscribers can raise revenue, but if it means you never get any new subscribers, your company is even more doomed than it used to be.
Attracting young audiences is what he wants to do, not what he's done yet. I'm just struggling to think how you do that by increasing subscription costs and restricting free readership. It's a tough job, I wish him well.
> a successful turnaround that offers a glimmer of hope for the rest of the industry, which has laid off reams of journalists since the start of the year.
National- and international-focused journalism is relatively healthy. It’s also the least important part of the news media. Doing great? No. Still kickin’? Yes.
2nd-tier and lower city papers, and small town local papers (and tv journalism, too)… those are mostly dead already. Slowly strangled to death by technology, bought by private equity and gutted, or scooped up into giant propagandist media empires that don’t care about local issues and journalism, but about laundering their national agenda through “neutral” local outlets as a kind of astroturfing-adjacent activity.
Those were way more important, they’re already all but extinct, and there doesn’t seem to be a way to reverse the damage.
National- and international-focused journalism is relatively healthy. It’s also the least important part of the news media. Doing great? No. Still kickin’? Yes.
2nd-tier and lower city papers, and small town local papers (and tv journalism, too)… those are mostly dead already. Slowly strangled to death by technology, bought by private equity and gutted, or scooped up into giant propagandist media empires that don’t care about local issues and journalism, but about laundering their national agenda through “neutral” local outlets as a kind of astroturfing-adjacent activity.
Those were way more important, they’re already all but extinct, and there doesn’t seem to be a way to reverse the damage.
Mouthpieces for the reigning State Department ideology. Absolute shitrag. The fact that they raised prices and people were willing to pay tells me their audience is DC club regulars circulating the money pool. From our pockets to their cocktail lounges.
I think this highlights an actually disturbing trend of billionaire’s buying establish mass media.
Laurene Powell Jobs buying Atlantic, Jeff Bezos buying Washington Post, Elon Musk buying Twitter.
Laurene Powell Jobs buying Atlantic, Jeff Bezos buying Washington Post, Elon Musk buying Twitter.
Have not the wealthy always owned large parts of the media?
https://www.nytimes.com/2012/04/09/business/media/the-return...
https://www.nytimes.com/2012/04/09/business/media/the-return...
This isn't a new trend. Rich people have always purchased news media, often to help their other businesses. It's been going on for the longest time.
Indeed, in the US many of the newspapers were started by political parties who used the papers to push their candidates.
Indeed, in the US many of the newspapers were started by political parties who used the papers to push their candidates.
The US did used to have rules preventing too much concentration of media ownership.
Then the telecommunication act of 1996 happened and jettisoned a bunch of those rules “to foster competition”, which in fact predictably reduced competition. Later action prompted by the act (2003) made it even worse.
It has always been the case that rich & powerful folks tend to own media, but for a while we had pretty effective rules preventing any one entity from controlling too much of a given media market, which tempered that tendency. We got rid of much of that, with predictable results.
Then the telecommunication act of 1996 happened and jettisoned a bunch of those rules “to foster competition”, which in fact predictably reduced competition. Later action prompted by the act (2003) made it even worse.
It has always been the case that rich & powerful folks tend to own media, but for a while we had pretty effective rules preventing any one entity from controlling too much of a given media market, which tempered that tendency. We got rid of much of that, with predictable results.
Who do you think owned mass media before this?
won't someone think of the multimillionaires who were outbid when trying to buy mass media?
Billionaires are in a separate category. It's not good that one person has enough money to control so much.
The problem is the concentration. One person majority owning a platform as influential as Twitter or an expansive media empire (Murdochs) is not good for democracy. If the empire was split up to ten different multimillionaires we'd be better off.
In the UK we have the BBC where every word is considered to be a fact. They have TV channels and radio shows where 'today's curated and extremely edited sound-bites' are broadcast every 30 minutes, 24/7.
At least with billionaire owners it's taken as read there is going to be some nuance.
At least with billionaire owners it's taken as read there is going to be some nuance.
"we make something worth buying." That is interesting. The "buying" ostensibly refers to journalism, which is where IMO the media has failed terribly in the past 2-3 decades. Most of it became too opinionated that the product being sold was no longer news and analysis, but opinions and echo chambers. I think over time people got tired of paying for opinions, but others were content to continue to do so.
A newspaper that read more like analytical research would be more appealing. The media would benefit as a whole, and prosper, if they strove to remove the personal opinions and beliefs from their reporting.
A newspaper that read more like analytical research would be more appealing. The media would benefit as a whole, and prosper, if they strove to remove the personal opinions and beliefs from their reporting.
This is a grand vision and diagnosis. It also maintains a studied distance via blanket assertions that are agreeable, and a 100,000 foot view. That makes it hard to discuss directly without seeming disagreeable.
Going with Socratic method:
Did anything else happen the last 2-3 decades? Anything that would cause tree pulp, that could charge for ads and subscribers, and thus afford to pay more and subsidize longer research, less popular?
Or is it just that the media/journalism/etc., these large faceless groups, all just universally started making opinionated content 20-30 years ago?
I'm curious: what did media/journalism looked like 50, 70, 100 years ago. Maybe I could look up newspaper front pages from back then. Was it less opinionated?
Going with Socratic method:
Did anything else happen the last 2-3 decades? Anything that would cause tree pulp, that could charge for ads and subscribers, and thus afford to pay more and subsidize longer research, less popular?
Or is it just that the media/journalism/etc., these large faceless groups, all just universally started making opinionated content 20-30 years ago?
I'm curious: what did media/journalism looked like 50, 70, 100 years ago. Maybe I could look up newspaper front pages from back then. Was it less opinionated?
> A newspaper that read more like analytical research would be more appealing.
Most people want their news in the form of stories, and especially stories about people they can relate to.
Most people want their news in the form of stories, and especially stories about people they can relate to.
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Interesting. Focus on the quality of the product and more people will want it and pay more for it. Someone should put this case study into a four sentence LinkedIn post so more startup CEOs will want to do it.
I guess people with money want "both sides" reporting for whatever reason but that doesn't seem very appealing to me compared to a well-defined agenda, especially for a newsroom that started with an explicitly abolitionist end. If I wanted to pay a bunch of money just to be confused about my values I would subscribe to virtually any major newspaper.
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I noticed in the last few years that The Altantic's front page was almost constant negativity, fear-mongering, click-bait. Surely there is much bad going on in the world but I just couldn't handle their style. So I cut it completely out of my news. I wonder if it was tied to this.
For similar perspectives but more even coverage I've been preferring The Nation, New Republic, and, to a lesser degree, Jacobin.
For similar perspectives but more even coverage I've been preferring The Nation, New Republic, and, to a lesser degree, Jacobin.
The Atlantic has always been a rag. So much so it was lampooned in the montage sequence in 1984's Ghostbusters. Even back then, 40 years ago, people knew what a nosy-Nancy sponge it was. So much so that Aykroyd, Ramis, and Moranis thought it would be funny to poke fun in a brief shot mushed into the movie, complete with a caricature cover.
https://www.youtube.com/watch?v=EwKR_y93izs&t=115s
https://www.youtube.com/watch?v=EwKR_y93izs&t=115s
I lean (non-American) left and read the Atlantic with some of the same criticism, but really enjoy delayed gratification for this. Only two paper periodicals that have stayed constantly subscribed to for years. The guardian weekly is good too. Thanks for the suggestions!
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From the article..
Atlantic annual revenue: $100 Million
For comparison..
NYT & WSJ: ~$2.4 Billion
Atlantic annual revenue: $100 Million
For comparison..
NYT & WSJ: ~$2.4 Billion
Yes obviously, but the NYT has also 1700 employees, The Atlantic less than 500.
I think the point stands... 3.5x the employees, 24x the revenue.
What's your point?
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The pre condition seems to be getting bought out by a patron Billionaire (Laurene Powell Jobs).
…and:
> A core part of Thompson’s strategy was to figure out how much readers would be willing to pay for a subscription. He ended up raising subscription prices by more than 50%, and made it harder for people to read stories without paying
> A core part of Thompson’s strategy was to figure out how much readers would be willing to pay for a subscription. He ended up raising subscription prices by more than 50%, and made it harder for people to read stories without paying
She's owned it since 2017.
In my experience as a reader, their strategy change happened after the Biden election, because they lost a major source of demand gen.
In my experience as a reader, their strategy change happened after the Biden election, because they lost a major source of demand gen.
I like The Atlantic well enough, and am glad it's not circling the drain like so many others. However, nothing in this article makes me believe they did more than reduce costs (aka lay off people) and extract more money from their existing pool of committed subscribers. That may not be the case, but I see nothing here that argues against that hypothesis. And I think it's safe to say that that would not be a good long-term strategy.
(I assume 'subscription growth' is subscription revenue growth, not necessarily the number of subscriptions, based on its use in the article)