BuzzFeed, Andrew Sullivan, and the Future of Making Money in Journalism
by Derek Thompson, 2013-01-07
At first blush, they would seem to have nothing to do with one another. BuzzFeed -- the Internet's finest crackerjack box of sticky, clicky listicles sprinkled with original reporting -- announced that it raised $19 million
in venture funding. In a far-away corner of the Web, Andrew Sullivan
, the pioneering blogger who has expanded into a mini-magazine within the Daily Beast, announced he was taking his team private, forgoing advertising and venture money, and relying instead on all-you-can-eat subscriptions for $19.99 (or more, if readers felt generous).
It is serendipitous that BuzzFeed and Sullivan's Dish made their announcements hours apart, because their stories belong together even if their styles are opposite. The archetypal BuzzFeed article begins, "50 Puppies to Get You Through Your Bad Day: Bet you can't stop looking at these dogs." The archetypal Dish article begins, "The Future of the Welfare State, Cont.: Douthat counters Ezra [blockquote]." But both sites are doing something extremely correct, both sites entertain and inform a mass audience, and both sites offered fitting glimpses of the future of paid journalism -- or, more accurately, two halves of that future.
Let's start with the Dish. Andrew Sullivan's massively successful blog has taken a grand tour of old-school media, from Time, to The Atlantic, to Newsweek/Daily Beast
. Flying solo, it will have to bring in somewhere around $1 million every year. Andrew's strategy is to junk the ads and raise the money entirely through subscriptions. Like NYTimes.com, the model is a meter: After a certain number of internal clicks, you hit a limit -- no more click-throughs! -- and you're asked to pay (links from other articles around the Web don't count toward the limit). Andrew lays out the core principle
We want to create a place where readers - and readers alone - sustain the site. No bigger media companies will be subsidizing us; no venture capital will be sought to cushion our transition (unless my savings count as venture capital); and, most critically, no advertising will be getting in the way.
I don't doubt Andrew's sincerity, but this is a core principle motivated or reinforced by economic necessity. It's possible that the Dish could attract some independent advertising, but it would require a sales and marketing team, which has never been a part of Sully's stable. Furthermore, it's possible that the very thing that makes Andrew compulsively readable makes him a challenge to advertise. Fiercely independent, hyper-personal, and often unpredictable essays and amuse-bouche-links about politics and culture are not in the highest demand among tony advertisers, who have historically spent most of their money on sites and channels dedicated to business, technology, consumer products, or local needs -- none of which are really Andrew's forte. But all that doesn't matter a lick if readers are willing to pay. And they are. Twelve thousand readers subscribed at $28 on average through yesterday, bringing the Dish roughly 30% toward its one-year goal.
It's probable that the Dish can live a year on subs alone. It's plausible that the Dish can live for two years on subs alone, or three, or 30. But practically everything else -- the vast majority of journalism, from the New York Times to the pop culture blogs that specialize in bikini shots -- cannot survive on the good will and generosity of their readership, and there is no expectation that they will. Advertising is what makes news and entertainment -- first in 19th-century newspapers, then on early 20th-century radio, then on late-20th-century television, and now on early-21st-century Web and mobile -- affordable at a mass scale. The news needs successful advertising to breathe.
That's why BuzzFeed's story matters. It's commonly understood that Web advertising stinks, quarantined as it is in miserable banners and squares around article pages. BuzzFeed's approach is different: It designs ads for companies that aim to be as funny and sharable as their other stories. Jonah Peretti, the CEO of BuzzFeed, told the Guardian's Heidi Moore
that he attributed nearly all the company's revenues to this sort of "social" advertising. "We work with brands to help them speak the language of the web," Peretti said. "I think there's an opportunity to create a golden age of advertising, like another Mad Men age of advertising, where people are really creative and take it seriously."
The online reaction to the Dish and BuzzFeed seems to be that what Andrew's doing is sort of quaint and old-fashioned and what BuzzFeed is doing is weird and revolutionary. The opposite is true. Funding a journalistic enterprise without advertising is weird and revolutionary and experimenting with ads that are suitable to their medium is a clear echo of history. Just as the first radio ads were essentially newspaper ads read aloud, and the first television ads were little more than radio spots over static images, many on the Web are fighting the last war rather than building ads that work for the Internet, journalism history professor Michael Schudson explained
Banners and pop-up ads are so awful they practically sulk in their acknowledged awfulness, fully aware that they are interruptions rather than attempts to compete with editorial content for the readers' attention. BuzzFeed (and other companies experimenting with designing advertising for their advertisers) gets that and tries to fix it.
Just as TV ads are successful precisely because they try to be as evocative, funny, arresting, and memorable as actual TV, there's no reason why advertising content shouldn't aim to be as informative or delightful as an original online piece. That's not a new idea. Consider it a corollary to the rule set by Adolph S. Ochs, the long-ago publisher of the New York Times: "Advertising in the final analysis should be news; if it is not news, it is worthless."
Even as Sullivan's Dish is pushing the boundaries of subscriptions, testing how much a dedicated audience is willing to pay for online journalism that is supposedly free, BuzzFeed is pushing the boundaries of advertorial -- advertising content like looks like editorial content -- testing how far each side of their two-sided market (readers and companies) is willing to go.
The future of paid journalism -- if we can even try to guess at it -- will probably be a blend of the two strategies celebrated this week: Ads that are less useless and ignorable, and readers who are asked to show a little more love than they're used to.
This piece first appeared in theatlantic.com