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The paywall dilemma

I've always been astonished when publications hide their entire articles behind a paywall; it's not uncommon at all to land on a page and see little more than a headline. It just seems intuitive to me that you'd convert at a higher rate if you get someone to spend a few extra seconds on the page.

Apparently that intuition is completely wrong, at least according to this study. A lot of news consumers consider the headline and lede to be more than enough information, and so therefore are less likely to convert into paid subscribers after reading them:

The study’s authors examined how each “teaser” element contributed to a visitor’s likeliness to subscribe. They found that decks (“stand-ins,” for those across the pond) and intros decreased the odds of a visitor subscribing by 86.3% and 72.2%, respectively. (Results for an image and a blurred article preview were not statistically significant.) Readers who see information-dense nuggets like ledes and decks, the authors write, may feel they’ve learned all they need to know in front of the paywall — and don’t need to subscribe to learn more.

I've noticed lots of Substack newsletters take the opposite approach; they'll give free subscribers several paragraphs of text before the paywall kicks in. Hell, that's the strategy I use; you'll notice that you need to scroll down pretty far in my newsletter before you encounter a paywall.

For me, I view it as a tradeoff; sure, by burying my paywall so low, I'm decreasing my conversion rate. But by giving so much content away for free, I'm increasing the chance that my free subscribers will recommend my newsletter to others. If my newsletter grows faster, then theoretically that's better for me in the long run, especially if I want to get more serious about selling sponsorships.

The creator middle class is growing

A TikTok creator who specializes in asking people in various fields what they make in salary is now generating $1.6 million a year.

“97% of our revenue comes from brand partnerships and in this political landscape, our work is all about workforce equity,” Williams told us. “So we’re a little bit nervous about the budgets of partners that we want to work with this year.”

Williams added that less dependence on brand partnerships frees the team up to be more open in videos and podcast episodes.

Her total following on TikTok is 1.4 million. Don't get me wrong; that's a huge audience, but it was only about 10 years ago when YouTubers with over a million followers were still having to wait tables just to make ends meet. Now I encounter creators all the time who are able to generate six figure incomes with fewer than 100,000 followers. Every year, the subscriber threshold for joining the creator middle class is lowering.

Buzzfeed isn’t trying to compete with Facebook

Axios has new details about Buzzfeed’s plans to launch its own social network, which it’ll call BF Island:

Similar to apps like Midjourney, BF Island will allow users to use AI to create and share content around their interests. Like most consumer AI apps, BF Island plans to have a freemium model, where simpler features are available for free and more advanced features are available with a subscription, Peretti says. The experimental project stems from the company's success with the interactive and AI-powered features on the BuzzFeed app. In the future, those features would no longer need to be "bolted on" to a publisher site, he noted.

A lot of people are going to interpret this as BuzzFeed trying to compete with, say, Facebook, but this is really not that different from a media company launching its own community forum — something that plenty of outlets, even small ones, regularly do. It's really all about moving audiences onto owned and operated platforms, and the more BuzzFeed can do this, the stronger its future business prospects are.

The biggest challenge for BuzzFeed will be funneling its audience into the new platform and convincing them to make it a daily habit. For years, BuzzFeed generated significant traffic by simply curating top-voted posts on Reddit, so my guess is it it'll try to utilize its social network to crowdsource content for its front page. That would then create a feedback loop where users on article pages are continually pushed into to social network so they too can start contributing creative content.

Please don’t take my newsletter for granted

I rely on paid subscriptions for the vast majority of my revenue. Without enough paid subscribers, I can’t continue justifying spending 40+ hours a week on my newsletter and podcast, and I’ll need to shut them down so I can seek out other work.

Let me put this another way: if you’d be disappointed if I suddenly announced that I’m shutting down my newsletter — a very real possibility — then you should probably subscribe.

Seriously, it’s only $125 for a full year, and if you’re using insights from my content to improve your own business, then that $125 pays for itself. And if you use the link below, you get 20% off for the first year:

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A media conglomerate pivots to talent management

Fox announced it’s acquiring Red Ventures, a kind of talent management company focused on podcasters:

The acquisition moves the Fox Corporation into the heart of the online “creator economy,” where media personalities who once relied on old-school corporate distributors — like, say, the cable networks owned by Fox — have struck out on their own to build podcasts and streaming shows that rack up millions of subscribers on platforms like YouTube and SiriusXM.

Red Seat’s lengthy client list includes Dr. Phil, Nancy Grace, Bill O’Reilly, the former “To Catch a Predator” host Chris Hansen and the “President’s Daily Brief” podcast.

This is Fox's acknowledgement that the media will need to change the way it works with talent. Historically, media companies adopted a traditional top-down structure in which content creators were salaried employees who were more-or-less interchangeable. Sure, those media outlets competed with each other for talent, but mostly via modest salary bumps.

In this new paradigm, the talent directly benefits from the value they bring to the organization. It's much more similar to the publisher-talent dynamic found in industries like book publishing and music. The media company handles the more centralized functions of monetization and distribution, but it treats the talent as partners in growing the business, which requires granting them more independence and autonomy.

Transplanting the cable news format to YouTube

Mark Halperin, a political analyst who’s worked for ABC News, MSNBC, and Bloomberg, just raised $4 million for a new media startup and is using it to bring on high-profile contributors like Meghan McCain.

If I understand how this startup works, it basically offers up live, cable-news-style panel discussions with star pundits on YouTube, and it then takes clips of those discussions and distributes them on platforms like YouTube and Twitter. It's basically taking the cable news model and adapting it for the web.

It's a pretty smart approach! Every time one of the clips goes viral, it leads to a spike in subscribers to the YouTube channel, and then more people are alerted when a new episode goes live. The full episodes are also distributed afterward on all the major podcast apps.

And by having "star" pundits with actual followings on its payroll, it's slightly differentiated from all the other political podcasts and Twitch streams already out there. It's basically taking Puck's model of amalgamating media stars and applying it to live video.

***

On a related note, Mark Halperin also writes a daily newsletter that he charges a whopping $4,000 a year to access. I’ve talked to several folks in politics media who asked me, “Is that thing actually making money?” I have no idea! But I know Halperin is more of a general news reporter and doesn’t engage in the type of deep policy journalism that you’ll find at other high-priced outlets like Politico Pro. So who has the $4,000 to shell out just so they can get the same political analysis that’s widely available for free?

Some good longform articles

Intellectual property is arguably the most valuable resource in the developed world. The collective income made possible by copyrights, trademarks, and patents runs into the many trillions of dollars. But is it bad for both our society and culture that so much of the most-used IP is owned by a relatively small number of huge corporations? And will AI basically decimate all the IP moats that these corporations have monopolized? [New Yorker]

Russia's leading news anchor was once a hard-hitting journalist; now he's the Kremlin's chief propagandist. His transformation really captures how much Putin has bent the nation's media industry to his will over the last 20 years. [WSJ]

One of the fastest-growing podcasts is hosted by a retired NFL player. What's especially interesting: his decision to expand well beyond sports; he basically leverages his stardom to gain access to the world's biggest black celebrities and gives them a safe space to expound at length on their lives. [NYT]

Feed Me is often referred to as a “business newsletter,” but it devotes much of its coverage to the culture and lifestyles of rich urbanites. It’s as much aspirational as it is journalistic. [NYT]

One of the rising stars in the literary scene is a Gen-Z New Yorker who writes feminist personal essays on Substack: “When people hear ‘twenty-one-year-­old with a book deal,’ there’s a lot of assumptions that they make about the book. I want to be able to prove people wrong.” [The Walrus]

The Bulwark, a publication started by never-Trump Republicans, has over 76,000 paid subscribers for its newsletter and is generating $150,000 to $300,000 per month in YouTube ad revenue. With Trump now in office, it's adding 700 to 1,000 new paid subscribers a day. [New York]

When Dana White took over the UFC in 2001, it was a backwater sport on the verge of bankruptcy. Over the next 20 years, he fought and clawed his way into mainstream culture, not only turning UFC into the fastest-growing league of the 21st century, but also transforming it into a pro-Trump political movement. [Rolling Stone]

ICYMI: How a former Cosmo editor built Australia's largest women-focused media company

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Behind the paywall

Here’s what I have on deck for paying subscribers:

1. Try to find undervalued content niches

2. Video podcasts are low-hanging fruit for Netflix

3. The TV advertising market is growing more fragmented

4. Digital native media outlets are acting more and more like TV networks

Let’s jump into it…

Try to find undervalued content niches...