Welcome! I'm Simon Owens and this is my media industry newsletter. If you've received it, then you either subscribed or someone forwarded it to you.

If you fit into the latter camp and want to subscribe, then you can click on this handy little button:

Sign up here

Let’s jump into it…

Your story is special. Your writing and publishing partner should be too

[Sponsored]

• Have a brilliant idea for a book to showcase your expertise and expand your reach but don’t know where to start? 

• Want to build up to a book by building your audience and growing your platform?

• Need to give a high-stakes speech but don’t have a speechwriting pro on your team? 

Gotham Ghostwriters is the partner you have been looking for.

With 3000+ accomplished editorial specialists in our network, we have the unparalleled ability to find the right writing partner for your priorities. Our ghostwriters have collaborated on hundreds of noteworthy books with globally known public figures and celebrities. 

Schedule a complimentary consultation today!

Gotham also can help you get the most impact from your work. We have extensive industry relationships with literary agents, publishers, media outlets, and PR and marketing consultants to find the right publishing path for your stories and ideas.

Not ready to start your storytelling journey? Subscribe to Gotham’s monthly newsletter for industry insights, tips, opportunities, and more.

The valley of churn

Spend any amount of time reading coverage of the media industry and you’ll be constantly exposed to success stories. Everywhere you turn there’s a media executive touting their X% YOY audience growth or a newsletter writer being interviewed about how they hit 10,000 paying subscribers or a TikTok star casually mentioning they charge $20,000 per sponsored video. And because nobody wants to be regarded as a failure, everyone else projects strength — to the extent that probably each person reading this has found themselves, at some point, cherry picking stats that indicate upward growth. This then triggers a self-perpetuating state of anxiety among media operators who aren’t aware that they’re not the only ones struggling to grow their businesses.

Of course, with traditional media outlets, there often comes a breaking point — typically indicated with a massive round of layoffs — where the emperor is revealed to have no clothes. How many years did we buy BuzzFeed’s narrative that it had unlocked the strategy for unlimited growth before everything came crashing down? And more recently, Business Insider rode wave after wave of positive press about its subscription growth and expansion into new verticals, only to then suffer a series of setbacks that painted a much bleaker picture. Last week, its editor-in-chief finally admitted in a staff-wide memo that “traffic is down. Subs are down. Video views are down. That was true two weeks ago and has been for months.”  

But for those content creators who are operating their own solo media businesses, that public breaking point often never comes. They've reached some level of "success," in that they're making more than pizza money, but clearing that next hurdle to where they're pulling down something resembling a living wage is seeming increasingly unreachable. Many are left wondering if they’re progressing, treading water, or just slowly drowning. It can be an intensely lonely experience, especially when everyone around you seems to be doing just swell.

That’s why I found it so refreshing to read this piece in the Hoarse Whisperings newsletter titled “I am presently failing.” 

I’m not super familiar with HW — as I’ll refer to him from here forward — but I do know that he’s built a sizable following on Twitter, and at some point he launched a paid newsletter on Substack. Though he experienced encouraging subscription growth early on, that growth eventually plateaued and even reversed itself. And while HW points to a number of causes — including Elon Musk’s decision to punish Substack links on Twitter — the underlying problem is the one that every subscription business faces eventually:

The vexatious mortal enemy of any subscription-based business is ‘churn’. People leaving. It doesn’t matter whether it’s a magazine, a gym, cell service, or Jelly of the Month, the tide pulling against the business is people leaving.

When HBO was a client of mine, they needed to bring in a volume of new customers each year equal to a startling 15-20% of their entire customer base just to offset the people who churned out.

That’s just how it works in subscription-based businesses. People leave. You have to replace them with at least as many.

For better or worse, paid subscription models are the easiest to implement for the vast majority of content creators, and I think many would identify with HW’s struggles. After a certain point, building a subscription business starts feeling more and more like wading through molasses, to the point where you may stop growing all together.

It can be a quite maddening experience, especially since there’s no readily apparent remedy. It feels even worse when you keep coming across creators who humble brag about their eye-popping subscription numbers. The entire situation can leave you feeling wholly inadequate as a content creator.

I’ve been operating as a full-time creator for over three years, and there certainly have been times when I felt this inadequacy myself. But I’ve always managed to push through and find a path forward. Here are the strategies I’ve used to adapt: 

Talk to other media operators

As I mentioned above, most media entrepreneurs aren’t keen on publicly broadcasting their failures, but I’ve found they’re much more willing to open up in a private conversation. 

Over the last few years, I’ve assembled a growing network of media operators that I correspond with regularly through DMs, email, and even phone calls. Many of them have shared their own struggles across a range of issues, and it’s helped contextualize the problems I’m facing.

What’s more, these discussions have led to key insights into how to troubleshoot those problems. The network essentially served as a high-value focus group wherein a member’s own experience informed the feedback they gave. I’ve definitely had a few lightbulb ideas that were triggered through my conversations with others. 

Reassess your subscription strategy

Too many media businesses set their subscription strategies on autopilot; they start with assumptions about what drives audience conversions from free to paid, and then stay wedded to those strategies moving forward. They assume that what worked to convert the initial cohort of paid subscribers will also work on the next cohort.

Let’s consider Netflix and Spotify for a moment. By some measures, they’re among the most successful subscription businesses of all time, with each company serving hundreds of millions of recurring customers. 

In the past decade, has there been a single year when either of these companies didn’t push forward a major shift in their strategy — whether it was through their content offerings, optimization, or marketing? Of course not! That’s because subscriptions aren’t a single puzzle to be solved, but rather they’re an ever-shifting landscape of consumer trends and motivations. Over time, marketing channels get saturated and successful conversion levers become less effective. 

I’m constantly testing out new subscriber offerings and ways to market them. Several weeks ago, for instance, I got the idea to introduce a formal process so new subscribers could book a half-hour introductory phone call with me. This unlocked a sizable burst of conversions from readers who had been on the fence about subscribing. Recently, I began working on another subscriber feature that I plan to debut in the coming weeks.

Recognize that subscriptions alone probably will never be enough

Many media businesses are built on the foundation of Kevin Kelly's “1,000 true fans” theory — which posits that content creators only need to find 1,000 people to pay $100 a year in order to generate a decent middle class income. 

To be clear, I think Kevin Kelly’s essay deserves all the recognition it’s received for pinpointing a fundamental truth about internet economics, but at the same time I’ve come to believe that the vast majority of creators won’t be able to achieve the escape velocity needed to generate 1,000 “true fans.”

Subscription economics are brutal and require frequent output of both free and paid content to pull consumers into a sales funnel and convert them. Unfortunately, most creators simply don’t have the capacity to maintain the level of production needed to reach 1,000 concurrent customers. Eventually, the gravitational force of churn becomes too great to overcome. 

That’s why I’m such a huge advocate of revenue diversification. Whether you’re selling high-priced courses, low-priced ebooks, or sponsorships, each approach allows you to monetize sections of your audience who may otherwise resist paying for a subscription. According to most surveys, only about 20% of adults pay for even a single news subscription, which means a huge portion of your audience is likely unmonetizable through subscriptions alone. 

Don’t get me wrong; I still think paid subscriptions can form a great foundation for any media business, especially since they incentivize creators to remain hyper focused on serving their audiences. But there’s a reason that even the most successful subscription companies — including Netflix, Spotify, and The New York Times — have embraced diversification: there aren’t quite enough subscribers to go around.

The valley of churn is harsh and inhospitable. Often, the only means of escape is to explore other business models.

What do you think?

Quick hits

"A new study from Pew Research Center, released on Thursday, found that just over half (51%) of the top-ranked podcasts in the US have a video component." [Business Insider]

I'm pretty much ready to declare that 99% of the hype around journalism use cases of AI is bullshit. It's not that the longterm potential isn't there, but every article I read on the subject involves media executives issuing vague bromides like "we're exploring all potential applications." It's getting tiresome.

Wordpress is launching a paid newsletter product. [TechCrunch] This is actually a really interesting move from Wordpress because it's offering options for both its free and paid accounts. For free accounts, the user simply pays 10% of their subscription revenue, whereas if they upgrade to a paid Wordpress account they pay 0%. Probably the biggest weakness of Substack is that, once a newsletter reaches a certain size, it's incentivized to move off the platform to avoid the 10% fee. With Wordpress, users will simply be able to upgrade and then eliminate the fee — thus Wordpress doesn't lose them as a customer.

People are often more willing to pay for in-person connections than they are for content. That's why conferences and other in-person events are such a huge business. [Meagan’s Newsletter]

I'm surprised it's taken this long for WashPo to build out its games vertical, given the success of its chief competitor in this niche. [WashPo]

Are you sick of me yet?

If not, then you might want to follow me on one of these channels where I round up media industry news on a daily basis:

1. Substack Notes

2. My private Facebook group

3. LinkedIn