STAT and Applied XL Create Paid Product Around Structured Data

The majority of media companies are trying to identify possible paid products. The most straightforward answer, for many, is to throw up a paywall. But what if another product could complement that paywall.

But first... A message about our sponsor, Omeda.

If you ever want to be really confused, look at a marketer's tech stack. They've got one tool for email, another for analytics, a third for social, and somehow they have to unify all that information to make decisions.

It's not smart to choose tools with flashy features over a focus on what matters.

Omeda has released its ESP Playbook, which explains why publishers need to have a unified MarTech stack. Just as importantly, they explain why the ESP should be the priority over everything else. With the direct line of communication, email remains the best way to engage your audience.

Download the full ESP Playbook here.

Now let's jump in...

***

In a press release announcing its latest round of funding, Applied XL wrote:

According to the STAT Trials Pulse website:

I love this idea. A strategy for biotech investors is to anticipate which companies are likely to get approval for their drugs and invest accordingly. Naturally, these investors are reading STAT for daily news, but there is no way for STAT to cover everything.

This is where Applied XL comes into play. It has developed the technology to parse through all of this data; however, the "editorial-driven algorithms" make this impactful. Not all data matters. Without the right inputs (the algorithm), the AI can't deliver the correct information. However, the AI can learn with the STAT team providing the framework.

I think more b2b media companies should be looking at this type of product. In May, I wrote about creating down-funnel subscriptions products that were not just news subscriptions.

Even if you're not dealing with the amount of data that Applied XL and STAT are, determine if there is any unstructured or disorganized information to which you can try and bring order.

One example that I am particularly fond of is The Block. The crypto publication has a data section that aggregates multiple sources. Some of the data come from their research team, but most are just piped in from 3rd-party APIs.

As a user, I could visit the individual sites to get that information. Or, I could go to The Block. But, in this case, The Block is not gating the data. Instead, it's an ad play with each category having its own sponsor.

However, this fits their objective of bringing the right users to the site. The type of power user who wants all this disparate data is the same person who will likely pay the four to five figures for a license to the research platform. In this case, the data is a marketing and sponsorship tool.

But could The Block also acquire the data directly (rather than relying on 3rd parties) and then make it an additional part of the research subscription? Yes, it likely could. But the decision to do this should be grounded in how much competition there is. In the crypto space, everyone has a data product. Therefore, the better strategy is monetizing the 3rd-party data with advertising and then trying to convert the visitors to the research product. Users pay for data contextualization rather than the data directly.

Nevertheless, this is where I think more b2b operators should be spending some time. What sort of data aggregation can you do for your readers? Is it unstructured data like Applied XL and STAT are working with? Or is it simply creating a clean, single destination for power users to go and analyze? Identifying an opportunity here could be a substantial growth opportunity for niche operators.

Acquiring your job with a local newspaper

Poynter has an interesting story about how more people looking for a new journalism job should consider owning a small newspaper. This part jumps out to me:

I've never run a local newspaper like this, so I couldn't comment on the costs; however, I guess the costs are nowhere near the $450k in revenue that the newspaper could make. You are effectively buying a journalism job that likely pays six figures.

But there's a problem that many of these newspaper owners—and candidly, many small businesses—need to overcome. Many of these businesses are owned by people who are now trying to retire. And yet, no one wants to manage their assets. The first paragraph in the Poynter story lays it out perfectly:

These small business owners have two choices without succession plans: never retire or shut down the paper. That presents an exciting opportunity for those that want this to be their next stage in life. However, cobbling together the resources to buy one of these papers might be complicated.

There are a couple of options. The first is, naturally, an SBA loan. I am certainly not an expert on these, so I recommend talking with an SBA specialist. However, another option is something called seller financing.

Essentially, these newspaper owners want to stop working. And they want to fund their retirement, ideally with the sale of their newspaper. So you could treat these owners as the bank and effectively borrow the money from them to buy the asset.

For example, let's say that a newspaper that generates $450k in revenue will sell for 2x revenue ($900k). Rather than forking over the complete $900k upfront, you could get the seller to finance a percentage of it with a low-interest rate. You now get to pay the seller back over time, but you now own an asset that is likely paying you much more than most journalism jobs.

I make it sound unbelievably easy here, and there is a ton that goes into buying a business, getting financing from the SBA and a seller, but it's an option. When presented with either never retiring or having to shut down the paper, financing the sale of their publication might be a good strategy for many of these operators.

Jim Iovino, director of NewStart, was right when he told Poynter: "Everyone's so focused on creating something new, going the startup route. What they don't understand is it's going to take them three to five years, probably, if not more, to get to the same level where these newspapers currently are in their community with the trust factor."

Skipping those early years and buying your way into an opportunity may be better. This is worth exploring in more detail.

Thanks for reading today's newsletter. Sign up for my premium newsletter sent on Fridays and you'll be invited to join the AMO Slack channel (members say the DMs are really helpful). Have a great week!