The Rebooting Show

The Rebooting show is sponsored by Kerv Interactive, an AI-powered video creative technology that creates shoppable and immersive experiences within any video content. Learn more......On this week’s episode of The Rebooting Show, Bob Guterma, CEO of The China Project, to discuss how to maintain credibility while catching flack from many sides, The China Project’s decision to leave Substack, adopting a subscription-first model and its crowdfunding efforts to raise capital from its audience.   For seven years, The China Project – called SupChina until July 2022 – has aimed to act as a bridge for the outside world to understand China. “It's literally 5x the number of people in America. In some ways, you could say [China] is more dynamic. Their historical trajectory is so fast that there are simultaneously people living the same as they did 150 years ago, and there are people living in the Jetsons – all in the same country.That task that’s grown more complicated in recent years as tensions have risen between the US and China. That’s ensnared The China Project in political hot water, with a group of hawkish senators saying it is a tool of Chinese influence and the Chinese government banning it. Guterma has described The China Project as “neither pro-China or anti-China” and its mission as “helping the world understand China better, more contextually, and with greater care, so that better decisions can be made.”The China Project moved off Substack, which is oriented more to single writer projects than full-fledged media properties. “There are ways to customize Substack as you go along, but it's really built around this one experience of a paid newsletter. We were already, and just only became more and more as time went on, not just a newsletter.” The China Project has multiple revenue streams, including ads, events and consulting, but it aims to be a subscription-first publisher. The China Project sells subscriptions from $120 for an individual up to $5,000 per year for database products. It made this shift with a changed focus on a B2B audience, which is more likely to pay for subscriptions than regular people simply curious about China. “As much as I think China is the biggest story of our times, most people aren't sitting at home thinking about how to cultivate better knowledge of China, and they're certainly not sitting at home ready to spend money on that.” The era of venture-funded publishing is mostly over, but new avenues are emerging, such as RegCF, which allows companies to use crowdfunding to raise up to $5 million over the course of 12 months. The China Project raised $1.6 million two years ago and is near $1 million in a second round. The China Project has raised nearly $10 million over the years. That incremental approach is preferable to big upfront funding, in Bob’s view: “Raising $50 million before you've done anything almost guarantees your irrelevance.”More perspective:Semafor did a deep a piece on The China Project that highlights the criticisms leveled at it in a whistleblower complaint that alleges it slants coverage to favor Chinese interests. (Bob dismisses this coverage as innuendo and cover for Semafor’s own indirect ties to the Chinese government through a partnership with a Chinese think tank.) The China Project published a lengthy rebuttal, claiming it is “a target of racist, populist, anti-China sentiment.”Unlike most small publishers, The China Project has published an annual report as part of its earlier crowdfunding capital raise. 

⁠Thanks to Kerv ⁠for sponsoring this episode. To see Kerv's technology at work, ⁠check out Peacock's MustShop TV⁠.If you’ll be on the Cote d’Azur next month. The New Attention Economy, presented by Kerv, will have speakers from the Financial Times, Uber, Paramount, Havas and more. Let’s talk ‘Active Attention’ Economy at Cannes Join us for three days of exclusive thoughtful conversations and cocktails with the industry’s best to discuss the Attention Economy and the future of publishing, streaming, AI & creativity. Register here.Last week, I traveled to Washington DC to record a podcast with Sean Griffey, CEO of Industry Dive. I’ve known Sean and Industry Dive a while, mostly because two of its 33 publications – Marketing Dive and Retail Dive – were in areas in which my previous companies had publications. Sean was also the rare media CEO who would come onto my podcast and not rattle off a bunch of talking points. The big numbers he talked about weren’t Facebook video views of ComScore uniques ginned up through traffic assignment schemes. He spoke about revenue and, imagine, EBITDA. Industry Dive went on to be bought not once but twice. First in a transaction to growth equity firm Falfurrias Capital in 2019 and then last year in a deal to events giant Informa last year that Axios reported put an enterprise value on Industry Dive of $525 million. That would make Industry Dive’s value at over two Vices and five BuzzFeeds.What Industry Dive got right is something I covered after the Informa deal. I was long impressed by Sean and Industry Dive’s management ability to stay focused and disciplined in their business model. It helped that Industry Dive didn’t raise venture capital. Constraints can be good. It meant focusing on what was working, notably newsletters and being good at putting first-party data to use for B2B marketers.In B2B, the pull to do events – have you signed up for The Rebooting’s Cannes events yet? – is strong. That’s because B2B doesn’t have advertisers per se, but marketers. And B2B marketers serve to get their sales teams prospects. That leads many B2B publications to go heavily to events.  Industry Dive skipped events because it was very good at building publications in high value industries with tons of regulation and tech-driven change and acting as a critical marketing partner. That isn’t revolutionary. But it’s hard to execute.Another aspect that impressed me about what Industry Dive did was it executed its playbook not once but across multiple industries. It didn’t wait until it perfected its playbook in one industry, because as Sean told me, you will perpetually put it off because you’ll never feel like you’ve gotten there. Building a leading publication in a single industry is hard but also has a fairly low ceiling, if you’re trying to build a big company. (I tend to think more people should be OK building a great company that’s smaller and skip the lure of massive exits.) Industry Dive was able to pull that off.And finally, I think there’s something to be said about how Sean and his team went about building their work without all the PR nonsense. I hope of the many things that are left behind from the previous era, it’s the out of whack ratio between sizzle and steak. Fake it till you make it always struck me as a terrible strategy. Ask Ozy. 

Last week, I was in Chicago to attend the Omeda OX6 conference, where I recorded a live version of The Rebooting Show podcast. Jessica Sibley, CEO of Time, joined me to discuss her first six months at the 100-year-old publishing brand. Among the issues we discussed:The benefits of being a “legacy” brandThe importance of a brand clearly standing for somethingWhy taking down a paywall was right for Time’s strategyHow Time is building a diversified business strategyWhy commerce content needs to sit alongside the newsroom, not in itWhy she believes in an in-office culture

Will Hayward, the CEO of Private Media, an independent publishing company in Australia that publishes several titles, including politics-focused Crikey, recently faced the intriguing and likely slightly terrifying experience of being the subject of a defamation lawsuit filed by Lachlan Murdoch over a Crikey opinion column that held the Murdochs were “unindicted co-conspirators” of the Jan 6 attack on the US Capitol. Murdoch withdrew the lawsuit in the aftermath of Fox settling its case with Dominion, much to Will’s relief. We discussed the case, the decision to stand firm against a powerful and angry individual, and how Crikey made lemonade out of lemons by using the case to rally support for the politics publication through subscriptions. We also touch on the impact of Australia’s news bargaining code that has wrung payments from platforms and is the model for similar laws worldwide, including in the US, as well as lessons learned from the social publishing era, since Will was in the thick of it.  

When I sent over topics for the latest episode of The Rebooting show to Axios’s Sara Fischer and Vox’s Peter Kafka, Peter replied with an editorial note: “maybe something deliberately upbeat to counteract a very gloomy pod.” Listeners, we tried, but journalists don’t naturally do upbeat. Some highlights:This is a good time to be niche: “Niche media is thriving in an era where generalist media seems to be declining,” Sara said. “Companies that launch with a little bit of money, but in a targeted way, focusing on one specific thing with authority, tend to build incrementally and more sustainably than companies that try to do it all at once upfront.”The Messenger is coming next week and… counterintuitive: “I don't believe that there is an audience that's salivating out there for straight-down-the-middle news,” Peter said. “Anyone who says that is lying to themselves or to the public.”After the streaming wars comes the winnowing: “You’re going to have fewer of these big subscription services, more of these free ad-supported services, and streaming will continue to dominate more of the time that people spend in terms of consuming television,” Sara said. “No longer is it plausible that everyone can just launch a subscription service and think that they're going to take meaningful market share.”The AI “tsunami of bullshit” is coming: “We're still relying on Google for referral traffic and the idea that people might find our articles there,” Peter said. “Whether or not you use AI, you are going to be swamped by the tsunami of bullshit, whether it's good or not, content made by robots. And even if every publisher and every trade group in America agrees to not do it, it doesn't matter because it'll come from all over the world.”

The Bitter Southerner began as a passion project for a group of natives to the South who were, well, a bit bitter about how it was often caricatured or reduced to its historical legacy as the birthplace of American slavery. That’s a past that is unfortunately still alive and is an indelible part of the American story. The Bitter Southerner confronts such issues head on but while telling a more nuanced and expansive story of this unique and yes complicated part of the world. Kyle Tibbs Jones, a co-founder of The Bitter Southerner, joined me to discuss the decade-long effort to build a sustainable, independent publication.

News on its own is often not a great business. Advertisers want to avoid it, and the humans required to recreate the product every day drive up costs, and subscriptions can only go so far. New York University journalism professor and media analyst Jay Rosen sees the need to discover new sources of subsidies to maintain a healthy news ecosystem. In this discussion, we cover that issue as well as the end of BuzzFeed News, the prospects for The Messenger and Semafor, why Trump hacked conventional political news coverage, promising efforts at building sustainable local journalism models, and Jay’s belief that Fox News is not a legitimate news organization.

Brian Hanly, CEO of Bullish Studio, is creating media brands from memes, working with a stable of finance meme accounts in particular to build media properties. I got to know Brian over the pandemic, and quickly became fascinated by Bullish’s business. No doubt much of the fintech media segment was helped along by ZIRP and crypto craziness, but the use of memes as the starting point for lightweight media businesses is a good template as we enter into what’s sure to be another crazy cycle for the media business.

Last Thursday, I spoke to Substack CEO Chris Best to get a better understanding of where the company is going. We recorded the interview before Elon Musk threw a temper tantrum over Substack's coming Twitter competitor. Chris and I spoke about a couple of important issues to me: ads and bundling. On ads, Chris explains that Substack is trying to occupy a part of the market on an opposite pole from the attention grabbing part of digital media defined by platforms like Facebook and TikTok. But he allowed that ads could be done in a way that makes sense for the space Substack wants to occupy. On bundling, Substack is opposed to a "subscribe to Substack" option that obviates the direct relationship with individual publishers. Instead, he's more interested in "writer federations" and reader-directed bundles that get the upside of bundle economics but don't tradeoff the direct relationship between the audience and publishers.

Joe Ruffalo was recently named senior vice president and general manager of Nexstar's NewsNation digital operations and The Hill. At both, Nexstar is looking to occupy a lane of "non-partisan" news outlets, betting on a middle ground that seems to have disappeared from the news landscape, as personality-driven opinion has proven far more lucrative and scalable.