What does it take to get users to pay for online news?
Ask Jessica Lessin. Once a technology reporter for the Wall Street Journal, she left to launch The Information, a single-subject news site based in Silicon Valley. For the price of $39 per month, or $399 per year, subscribers can access specialized coverage of the high-tech world, produced by a team of eight full-time reporters. This is a head-turning coup, in a world where people are used to reading content for free.
“What really gets us excited is bringing back a business model that makes sense for the industry,” says Lessin. “The subscription model really has this alignment that is very exciting to me as a journalist; it allows you to focus on producing higher-level content.”
The Information is akin to the B2B publication, or specialized industry newsletter, reinvented for the digital age. Its articles live behind a hard paywall – the strictest form of content control, unlike the so-called “metered” or porous paywalls that let users see some published material, as a kind of teaser, before they are asked to pay.
The model means that user acquisition happens at the high end, among a self-selecting base of affluent readers, often with a professional stake in the subject covered.
“It’s not a vision to be all things to all people. It’s a virtuous circle built on high-quality content,” says Lessin.
Why does The Information matter to the media industry at large? For one, because it signals that it’s open season for journalist-entrepreneurs. A new cohort of start-up publishers, Lessin among them, is creating powerful new media properties. They have the newsroom experience to launch credible newsrooms, along with the digital and business understanding to sustain them.
Like Jonah Peretti at Buzzfeed or Mike Allen at Politico, these next-generation founders are going toe-to-toe with legacy newsrooms. Even small-scale newsrooms end up punching above their weight, as specialization and focus give start-up publishers an edge. By way of example, see SCOTUSblog, the celebrated source of Supreme Court coverage, or InsideClimate News, the Pulitzer Prize-winning website on the environment. The arrival of new entrants, such as The Information, is an acceleration of the trend, marking a proliferation of new competitors in the changing media landscape.
Lessin’s move to found The Information also signals another phenomenon: the departure of top talent from major newsrooms, leaving to launch their own publications. In the same timeframe as Lessin’s jump, Kara Swisher left AllThingsD, a property of the Wall Street Journal, to start Re/code; Ezra Klein quit the Washington Post to lead Vox News; Anthony De Rosa left Reuters to join Circa.
But in what is perhaps the most noteworthy example, Bill Keller left a storied career as a columnist and management executive at the New York Times to launch The Marshall Project. There he’ll serve as the editor-in-chief of a non-profit, digital-only publication, covering the US criminal justice system.
“Instead of steering a ship around, you want to be in a place where you can start from scratch and get to the future faster,” said Lessin. “You get obsessed with an idea that isn’t encumbered by the same things.”
Add that to all the other legacy costs associated with old-school media: they lose talent and effectively pay an “innovation tax” as a result of a slow-moving internal culture.
Lessin admits she felt some trepidation about leaving the Wall Street Journal: a fear of leaving behind such a venerated brand. “It’s a leap to assume that people will pick up the phone and talk to you, without the big name of the Wall Street Journal,” she said.
But in fact, she is finding that more people pick up the phone now than they used to – something she attributes to “the curiosity of something that’s new”.
More fundamentally, it marks a shift in how news brands are perceived, by both readers and sources. Respect accrues quickly at news start-ups that prove their worth, in a kind of meritocracy of media brands. As a result, an outlet like The Information can build high esteem within months of its launch. Compare that with a decade ago, when titles such as The New York Times and its peers seemed to have a quasi-monopoly on public trust, while blogs and web magazines were hardly considered credible.
Lessin says her next step is to turn her subscribers into an active community, through an online conversation forum of the website’s elite readers. It helps that those readers already include tech and media industry heavyweights like James Murdoch, Marc Andreessen and Dustin Moskovitz.
Meanwhile, her team will be working on creating a news product that is indispensable within their niche. As she puts it, “your business only flies if you exceed that bar and deliver something of value.”
Author: Lara Setrakian is the Founder and Executive Editor of News Deeply. She is a World Economic Forum Young Global Leader and a Member of the Global Agenda Council on the United States.
Image: A deputy reads a news article about on his tablet during a debate in the upper house of Parliament in Rome. REUTERS/Alessandro Bianchi