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Does a Newspaper Subscription Make Sense in a Substack Era?

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“There are only two ways to make money in business: One is to bundle; the other is un-bundle.”

Jim Barksdale

I became a news junkie on September 11th.  While I always enjoyed reading the newspaper in high school, the tragic events of that day, combined with the real life importance  of each news break across the weeks and months that followed, cemented a habit of regularly checking the news multiple times a day. 

For the last 8+ years in the course of preparation of my Fifteen on Friday each week, my regular news diet has included as times (Not counting, other news aggregators and blogs):

  • Local papers:
    • The Tennessean
    • Nashville Post
    • Nashville Business Journal
  • National Papers
    • New York Times
    • Washington Post
    • Wall Street Journal
    • Financial Times
  • News Magazines
    • Vanity Fair
    • The Atlantic
    • New Yorker
    • Wired
    • Business Week
    • Economist

As someone who is a ‘content producer’ as well, I like to think I have a close eye on the evolution of the news business.   And while the headlines often bemoan the woes of the media business, there is a spate of innovation occurring with long-term ramifications.

A great newspaper has always consisted of a mix of ‘news’ – the recounting of current events, combined with a mix of editorial – how to think about current events.   These two features were bundled together and sold to the consumer – though as we well know – the real economics derived from what advertisers were willing to spend to access the eyeball’s time spent on page.

Since the dawn of the internet, and accelerating at ever more rapid paces, the news portion is now widely available for free from the ‘front page’ of the internet sites or even directly from the wire services.   I stopped taking the local general interest paper because it largely became reprints of stories from Reuters or the AP, but 24-48 hours after I had already seen them on the internet.  The one hold out of “new news” is great investigative journalism which still carries weight – but feels like it is fewer and far between as papers have continued to reduce their teams. 

What has increasingly been left behind is editorial content and newly emerged category of ‘click-bait’ pieces designed to capture your attention and serve advertising against.  Top ten lists, 5 bests, etc. are designed to capture attention and become viral.  But at their core, they are ultimately entertainment more than anything else.

Editorial content then remains the sole draw of many top tier publications.  Some, like the Financial Times and The Economist, continue to produce tremendous content. 

But what has changed here recently is the flagship paper’s role as a bundler of editorial content has come under attack.

Over the past couple of years, and accelerating under COVID, the growth of newsletters, enabled through the ease of the Substack platform, has allowed anyone with knowledge and differentiated point of view to build a sizable audience.  Low monthly price points and easy credit card processing (through technology vendor Stripe) has made it easy for authors with strong followings to build meaningful businesses on their own.  Of course, there are also a handful of newsletters that are offered for free and monetized in other ways. 

Like a lawyer who leaves a large firm to open an independent practice quickly realizes, the cost of being on a larger platform is sizable.  In a digital first world, legacy infrastructure costs like facilities, presses, distribution, etc. have all been omitted in exchange for exceedingly, low variable costs.  The power originally retained by the platform and it’s ability to take an author and turn them into a household brand has been dramatically shifted.

Platforms that want the star power can be expected to pay up – ala Spotify and Joe Rogan or SiriusXM and Howard Stern.   Otherwise, they will find that what they are really is just the farm team – a place where A players will land briefly, but quickly depart once their own capability (and subsequent earnings power) outstrips the meager support they receive from the institution itself. 

The question then is if this is a good or bad thing?  As a consumer, there is certainly a high value received from bundled editorial content vs. price paid.  With each columnist becoming its own subscription (and a $5 /$10 fee), it is easy to see how you can outstrip the prior price paid for the bundle subscription.  Conversely, with talent now being offered at a market price, the improved quality, should in theory compensate for the higher cost. 

There is two additional costs to consider – first, the impact of lower exposure to competing points of you.  With the ability to custom tailor your news menu is society worse off as a result of individualized echo chambers?  I would not likely pay to read Paul Krugman on his own, but when bundled within the NYT, I will periodically read his column even if I disagree with many of his conclusions.

The second cost is namely the search and management costs of curating your news.  Like every sphere of life, there is a plethora of options that now must be sought out, attended to and managed.  Keeping track of subscriptions, billing info and the like becomes an meaningful hassle in a world where you have 10+ ‘news’ subscriptions.

Like the emergence of any new industry, the initiation phase is marked by many players and high market fragmentation.   Over time, I would guess we will see new models for bundling emerge – potentially offered as a service to help independent columnists reduce subscriber churn. 

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