The media is evolving

Attio is the AI-native CRM that all of the top companies are using.

To use a simple analogy…

Simply connect your email and calendar, and Attio will instantly build a CRM with all of your contacts and even deliver actionable insights. Plus, powerful AI automations, real-time customer insights, and everything else your team needs to scale.

Industry leaders like Granola, Flatfile, Replicate and more are already experiencing what’s next.

Trust me: you’ll wonder why you didn’t try it sooner.

Since the advent of the internet, the business model for digital publishers was simple: drive traffic and monetize it.

Google was very much the force behind this. First, they organized all of the internet’s information and drove traffic to these websites. Then, they helped those websites monetize that traffic.

That created a strong incentive for publishers to regularly post content online. The more content they published, the more web traffic they received, and the more revenue they would generate.

While Google was indexing their content and driving traffic via search, publishers also adopted social platforms like Facebook and Twitter for additional distribution.

Depending on how old you are, you might recall when companies would promote their Facebook page to get more likes. The conventional thinking was that the more people who liked your page, the more people who would see your content in their news feed.

Facebook profited a ton from this and allowed companies to run ads to boost their likes and followers. That created a simple playbook for publishers: pay Facebook to get more likes, post more content on the platform, and drive that traffic from Facebook back to your website where you monetize with ads.

That worked well until Facebook rug pulled those same publishers who had been spending millions on the platform. In January 2018, Zuckerberg infamously announced a change to the news feed algorithm to prioritize “meaningful social interactions” with friends and family, and deprioritize content from publishers and brands.

Digital publishers who had relied heavily on Facebook saw their traffic drastically drop overnight. BuzzFeed, Mic, LittleThings, Upworthy, and Mashable (among others) all faced layoffs, valuation markdowns, or shutdowns in the aftermath.

Twitter also updated their algorithm to deprioritize posts containing external links in 2022. That meant that publishers could no longer rely on the platform’s distribution to drive traffic back to their websites.

And most recently, with the launch of Google’s AI Overviews, publishers are experiencing up to a 40% drop in traffic from the search engine. Google, who had initially pioneered the modern internet and digital content ecosystem, is now leaving publishers out to dry.

But there are several media companies who have done exceptionally well these past few years. Morning Brew, Axios, POLITICO, Industry Dive, Puck, and Punchbowl News, to name a few.

One thing that they all have in common: they are email-first media companies. They own their audience, and don’t depend on the distribution of external platforms to drive traffic and extract revenue.

When I first joined Morning Brew back in 2017, the simplicity of the business model blew my mind. At the time we only had 100,000 readers, but were charging brands more than $5,000 to sponsor a single newsletter.

As we grew (i.e. collected more emails), we could charge brands more and more to get in front of our (now larger) audience. By the time I left in 2020, companies like Apple and Visa were paying nearly $60,000 to sponsor the newsletter.

The other beautiful thing about email is that it doesn’t require a ton of people, software, or overhead. Ben Thompson is the OG of paid newsletters as far as I’m concerned. He launched Stratechery back in 2013, has operated it mostly on his own, and recent estimates suggest that his revenue exceeds $5M per year.

That’s right — he writes and sends 3 newsletters per week and brings home over $5M per year.

The popularity and success of both Morning Brew and Stratechery introduced this new model to publishers, entrepreneurs, and journalists as an opportunistic path forward.

Enter Substack in 2017 and beehiiv in 2021, and the barriers to entry for anyone to launch a newsletter basically went to zero. Although, it’s worth noting that Substack extorts a 10% fee from its writers and has recently made moves to prevent users from leaving the platform.

Reminder: platform dependency is bad for users (see above re: Facebook, Twitter, and Google).

Now that anyone can launch and scale a newsletter in a matter of minutes, the category has exploded with all sorts of content and use cases:

It’s not just easy to get started, but it’s an opportunity to build a real business. Newsletters on beehiiv are generating tens of millions of dollars each month, and dozens have been acquired. Milk Road was acquired for nearly 8-figures, and Mindstream was acquired last year by HubSpot, to name a couple.

Just last week newsletter-first media company, The Free Press, was rumored to be acquired by Paramount for up to $200M.

tl;dr: the newsletter model works.

But the broader media ecosystem is still in turmoil. Publishers have been caught with their pants down, shackled to platforms whose distribution no longer works in their favor. The vicious cycle of diminished traffic and layoffs leaves many of these businesses vulnerable to extinction.

Cloudflare CEO, Matthew Prince, joined Stratechery last week to voice his concerns about the future of the media ecosystem. One of his possible draconian predictions: real reporting and journalism ceases to exist in favor of AI companies serving as the arbiters of truth and information.

And while none of that is guaranteed to happen, you can begin to understand why having a diverse and sustainable media ecosystem is important. It’s a big reason why we launched the beehiiv Media Collective in January of this year.

The beehiiv Media Collective is a multimillion dollar investment to equip leading journalists with the tools, resources, and operational support they need to build sustainable, audience-first businesses. We provide these journalists health insurance, legal support, software licenses, and tons of expert guidance to help them navigate their journey.

And of course, beehiiv is one of the only platforms in the industry that doesn’t take a cut of its users’ subscription revenue, so these journalists truly do own and operate their business independently, while maintaining all of the upside.

It’s been a massive success thus far. In just the first 8 months of the program Oliver Darcy has surpassed $1M ARR, Ryan Broderick has hired two full-time staff as he scales Garbage Day, and the rest of the cohort has many thousands of paying subscribers themselves.

So we’re doubling down.

Today we’re introducing Wendy McMahon as our newest advisor at beehiiv. Wendy is the former President and CEO of CBS News, Stations and Media Ventures. Prior to CBS, she spent a decade at Disney leading the ABC Owned Television Stations and digital businesses.

She’s an absolute rockstar and will help us to continue to push the limits of what’s possible in this new age of independent journalism.

The old models are broken, and the new platforms (i.e. Substack) are deploying a dangerous playbook of writer exploitation and platform lock-in.

We’re building something so much more than just a newsletter platform. We’re building an operating system for publishers, creators, and entrepreneurs to succeed.

If you enjoyed this post or know someone who may find it useful, please share it with them and encourage them to subscribe: mail.bigdeskenergy.com/p/media-evolving

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