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The next era for bootstrapped media

Earlier this week I had a conversation with an entrepreneur who’s been running a bootstrapped media outlet since 2020, and one of his observations stood out to me: after years of hiring freelancers to create content for his site, he felt that they weren’t worth the investment. Not only were they expensive to hire, but he also had to waste a lot of time editing their work so it met his quality standards. What he really needed, he eventually realized, was to partner with experienced media operators who not only produced high quality work but also had equity stakes in the business. He felt that someone who had skin in the game would produce better work product than a 1099 contractor who was just collecting a paycheck. 

I was reminded of that conversation while reading this piece in the Embedded newsletter about how journalists will adapt to the ongoing implosion of VC-funded digital media:

I don’t think a sustainable solution is to unleash all the journalists onto Substack and have us individually compete for eyeballs like some kind of very slow, pedantic Hunger Games. My solution is for a bunch of these writers to come together as one unit, all assigned specific roles and beats, and contribute to a well of diverse, interesting, and necessary content that people then pay to read.

I’m on record as being an optimist about the future of the Creator Economy; I think we’re at the very early stages of an entrepreneurial media explosion. But at the same time, I’m a realist about how damn hard it is to launch and build a sustainable bootstrapped media business, especially as a solo operator. Not only can it require years of financial runway, but it’s also difficult for a single person to juggle a variety of tasks that include content creation, marketing, and business development. It’s much easier when you can divide these tasks among multiple partners.

That’s why that media entrepreneur I mentioned above decided to team up with other operators and launch a rebranded media outlet (the conversation was on background, hence why I can’t reveal the name). It’s also the reason behind a slew of media partnerships launched within the last year or so. Let’s take a closer look at how some of these partnerships are structured:

Jointly-launched products

One of the downsides of partnerships is that, once formed, they’re difficult to untangle. Lots of creators are understandably hesitant to sign over joint ownership of their audience and business to someone they’ve never worked with before.

One solution to this dilemma is to jointly build and launch products that exist outside their individual businesses. The most famous recent example of this is Prime, the energy drink company that’s co-owned by YouTubers KSI and Logan Paul. Individually, they each have enormous media reach, but the sports beverage industry is already dominated by well-entrenched players, and their combined audiences and resources helped instantly launch the Prime brand into the mainstream, allowing it to generate $250 million in retail sales within its first year.

These kinds of partnerships can be particularly effective for creators who operate in the same niche. After Epic Games announced it would share revenue with creators who built custom islands within Fortnite, a group of five gaming streamers teamed up to launch their own island. Their combined 120 million followers will ensure that the island will have quick adoption from hardcore gamers, and the partnership ensures that the participating streamers will benefit from the business without entangling their individual brands.

Media cooperatives

Worker cooperatives have existed for decades, but it’s only recently that they’ve been widely adopted in the media space. They can provide a great structure for operators who want to jointly launch a media outlet in which every worker benefits from the operation’s success.

The most famous media cooperative is Defector, which was launched in the wake of a mass resignation from sports site Deadspin. In its first year, it grew to over 40,000 paying members and $3.2 million in revenue. Other standout examples include the Discourse Blog and the Brick House. 

Worker cooperatives are great for creators who just want to build lifestyle businesses that generate decent incomes, but because of how they’re structured they can be difficult to scale past a certain size or sell to a larger company. 

Centralized bundles

But what if you want to build a model that scales like a traditional media company while still allowing creators to benefit in the upside? For that we have companies like Puck and Workweek — outlets that raised a small amount of venture capital so that they could create a centralized infrastructure designed to help creators thrive. I wrote a piece back in December about why Puck’s model is particularly interesting.

For these outlets, participating creators are often given some kind of base salary and benefits, as well as access to tech and marketing support. This provides an essential safety net that’s lacking in the wider Creator Economy, and it removes much of the risk that’s inherent in new media ventures. At the same time, the creators are given equity stakes in the company along with a share of the revenue they generate, which gives them plenty of incentive to help grow the business.

***

Of course, I’m not a disinterested observer of these trends. As someone who’s been operating his own solo media business since 2020, I’ve become keenly aware of my own weaknesses and blinds pots, especially when it comes to building out an effective sales operation. In recent months, I’ve been putting out feelers to potential partners who can help me better monetize my audience.

The economics of online businesses can be pretty brutal, and they’re especially tough when you’re going it alone. We may be living in the age of the personal brand, but that doesn’t change the long-held truth that there’s comfort in numbers.

What do you think?

Have you tried partnering up with your media business? What are some the factors a person should consider before entering into such a partnership?

I actually want to read your thoughts. I’ll round up your answers in this Friday’s newsletter. Click this button to sound off in the comments:

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Has City Cast invented a new model for delivering local news?

The local news industry has seen better days. The last 15 years or so have been pockmarked with mass layoffs, shuttered newspapers, and growing news deserts.

But there have been bright spots in the local news landscape … lean media startups that aim to fill the gaps left by their legacy newspaper counterparts. One such startup is called City Cast. Founded by former Slate editor David Plotz, City Cast has a unique model in which it simultaneously launches both a daily newsletter and podcast in each city it covers. 

I recently spoke to Bryan Vance, City Cast’s director of newsletters. We discussed the company’s playbook for launching in new cities, how it creates synergies between its podcasts and newsletters, and its approach to gathering local news.

Watch our discussion in the video embedded below:

If video embeds don’t work in your inbox, go here.

Quick hits

I think if there's anything we've learned over the past 15 years, it's that general-interest media sites that raise a lot of VC capital tend to underperform expectations by a significant margin. So I'm not very bullish on The Messenger. [Axios]

On a similar note, theSkimm continues to struggle. [Insider] I wrote back in 2020 about how its decision to raise VC capital caused it to expand too quickly.

Many print newspapers are heavily subsidized by "legal notices," which are government-purchased ads mandated by state law. This is likely why so many legacy news outlets still have print-centric strategies that make it difficult for them to pivot. [Daily Yonder]

It was pretty much an inevitability that low-quality publishers would embrace AI chatbots and trigger a content spampocalypse. [Bloomberg]

A cool story of a struggling Hollywood actor who decided to take matters into his own hands and build an audience online. [Colin and Samir]

ICYMI: How Stacker created a newswire for data journalism

Stacker co-founder Noah Greenberg walked me through the media outlet’s origin story, how it found its initial publishing partners, and how it developed its monetization strategy.