The Atlantic Attempts to Expand ROI of Its Reporting With Books

Many excellent books have been published over the past few years about some of the most prominent tech startups. Super Pumped by Mike Isaac, which was then adapted into a TV show on Showtime. Bad Blood by John Carreyrou, which then inspired podcasts and apparently a movie by The Big Short’s Adam McKay. 

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Now let's jump in...

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What do both of those and so many other books have in common? 

The media companies that funded the investigative reporting that led to the books that then led to the shows saw no money from any of the ancillary work. I don’t fault the reporters for that; on the contrary, good for them for doing such a great job that tons of people wanted to buy books that went even deeper. 

But despite investing in what turned out to be a great foundation for both these projects, the return on investment ended with the stories published on the publication’s website and in the newspapers. That has never felt right to me. In the case of The New York Times, it at least makes sense: they don’t have a book publishing asset, so Isaac had to go elsewhere. But The Wall Street Journal’s parent company, Newscorp, owns HarpersCollins.

That’s why I was so intrigued when I saw that The Atlantic was moving into book publishing. According to Publishers Weekly, The Atlantic partnered with Zando to create a new imprint:

This makes so much sense for a couple of reasons.

First, The Atlantic knows what resonates with its audience. It can look at its analytics and see what they're reading, what has them engaged the most, and what they're most likely to want more of. That gives it a unique angle to pick what kind of books it should be creating.

Second, because it will likely pick topics based on what its audience likes, promoting said books across its ecosystem is likely to be more successful. An author who writes a book through Atlantic Editions is therefore getting marketing support from a large institution.

Compare that to other book publishers that don't have a media asset behind them. First, they don't actually know what will resonate with audiences. Editors have to make educated guesses and then hope that it works. Second, publishers don't actually provide much marketing support for authors. One of the first questions asked of an author is, "how will you market your book?"

This, of course, is not the first time media companies have tried to do this. The New York Times, for a long time, had a policy (decades ago) where "reporters must submit their book proposals to Times Books for first-right-of-refusal if the books step from reporting originally done for the newspaper." Then, of course, The Wall Street Journal tried to take it one step farther. According to the IAPE Union, in mid-2021:

Felix Salmon reported that "writers must get the eic's permission before talking to agents or publishers" and "journalists can't use their reporting in their book unless they've licensed it from Dow Jones, presumably for $$$."

I guess there's a right way and a wrong way to do this.

Technically, WSJ probably has a leg to stand on. It paid for the reporting and it owns the rights to the work; however, all this does is turn things into a retention issue. If a reporter becomes big enough to warrant getting book deals, will they stay at WSJ?

But why not change the conversation from one of antagonism and, instead, treat it like a business relationship? I've long said that the newsroom is your greatest asset. And if a particular story becomes a big hit and people will want to buy a book on it, why not try and find a situation where both parties can benefit from it?

One simple problem is that we're dealing with massive, corporations where one department likely doesn't speak to the other. And so, it's just easier for the reporter to go off and get a competitive bid from whichever publishing house will work with them.

But that's why I am intrigued with what The Atlantic is doing. Because it will co-own its own imprint, it can control the book selection and directly benefit from marketing.

Compare that to WSJ. It saw no money from promoting Carreyrou's book, so it had no reason to promote it. Imagine if it had a stake in its success, though. Could WSJ have sent a marketing email to everyone that read Carreyrou's original reporting? Or, could WSJ have identified people in its database that are particularly interested in health startups? No traditional publisher could do that.

There doesn't have to be an adversarial relationship between a media company and a content creator. On the contrary, it should be one where both parties win. Whether it works for The Atlantic remains to be seen, but this is an example of both parties benefiting. I find that compelling.

Recurrent has a lot of cash

If you thought that a recession might make some of these media roll up ventures slow down, think again. According to The Wall Street Journal:

I think this could be very smart for Recurrent. If we are going into a recession, it's possible that certain publications might start struggling. Having significant cash on the balance sheet to make acquisitions, especially in these times, would make a lot of sense.

This model works so well because it is a true house of brands. Each publication has its own editorial and audience development team. Since each publication is different, you want there to be some subject matter expertise. But then it has centralized shared services. You only need one events team across the entire portfolio. With HR, you don't need it to be publication-specific.

And so, Recurrent can continue to grow aggressively, but not hire people in proportion to those acquisitions. However, you do actually have to pay attention to these shared services and find where there are redundancies. Sometimes, companies forget.

According to the Denver Business Journal:

This should not come as a surprise to anyone. Outside is a house of brands just the same as Recurrent. However, it seems that Outside forgot to really do an audit of its teams to make sure that there weren't redundancies. With the concern of recession approaching, it makes sense that Outside would tighten the operation.

Integration is the most important part of an acquisition and a component of that is making sure the shared services understand how to work on the new brands. And that's what makes this risky for these companies. It might find assets it likes, but if it's slow to integrate—keeping redundant teams operating—it could come back to bite the company.

But while Outside works through those issues, Recurrent will be waiting with $300 million.

AMO Podcast: Tim Hartman from GovExec

Earlier this month, Tim Hartman, CEO of GovExec, and I took the stage at Omeda’s Idea Exchange to do an on-stage recording of the podcast. We talked about what it was like closing on the GovExec deal only days after the Covid-19 lockdowns had taken place. We also talked about how the company has acquired and integrated various other companies. Finally, we dug into the different aspects of GovExec’s business model.

Be sure to give it a list on your podcast player of choice:

• Apple
• Spotify
• Google Podcasts

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