The Rebooting Show

In 2016, Max Kabat and Maise Crow moved to Marfa, a small arts town in west Texas, and a couple years later made a bold call. They bought the local newspaper, The Big Bend Sentinel. Ever since, they've been building out their take on a sustainable local news model by pairing the weekly newspaper with a cafe and events space. Max and I discuss the model, the challenges of operating entwined but separate businesses, and whether this could be a blueprint that could work in towns with similar characteristics as Marfa, a tourist town that attracts a flood of visitors every year. After all, most towns in America aren’t featured in Vogue.

There’s the understandable urge to “do something” to fix the difficult situation the news business finds itself in. Government intervention in markets has historically been less common in the U.S., but we’re in a time of aggressive industrial policy becoming the norm with measures like the Chips Act and the climate bill.Enter the Journalism Competition and Preservation Act, a bill that was attached to the defense bill winding its way through Congress. The JCPA would force big tech platforms to pay local news publishers for the privilege of sending traffic to these publishers.The measure, which at the moment has been removed from the defense bill although it could always get added back in upcoming the back-and-forth, has proponents who claim that it is a “lifeline” to local publishers by sweeping aside antitrust restrictions to allow them to collectively negotiate terms with big tech platforms like Google and Facebook parent company Meta. Detractors see a cash grab by local news chains that are often run by deep pocketed private equity firms. For its part, Meta has threatened to exit exit news altogether if the measure passes.On this week’s episode of The Rebooting Show, I spoke to Chris Krewson, executive director of the Local Independent Online News publishers group, to understand the possible unintended consequences to the bill, which Chris sees as mostly benefiting incumbents, many of which continue to cut journalists as a result of bad business decisions. It doesn’t help that many legacy chains are owned by private equity firms that probably shouldn’t need government assistance.

Joshi Herrmann is the founder of The Mill, a newsletter focused on Manchester – England, not New Hampshire, for those who call it “soccer” – as well as sister publications in Sheffield and Liverpool. Joshi started The Mill in June 2020, and across the three newsletters, the company has 45,000 email subscribers and has converted over 7% to paid subscribers. The Sheffield Post has 12,000 email subscribers and has managed to convert an impressive 950 to paid, according to Joshi. The company is near profitability with a small full-time staff augmented with freelancers.The common knock on the newsletter model applied to local journalism is that it can’t scratch much beyond the surface, and it tends to be mostly aggregation of original reporting still done by local newspapers, however depleted they are. The Mill and its sister titles are leaning on original reporting and in-depth features as opposed to just aggregation or fluff about local events.

The Athletic started in 2015 with a simple proposition: It would produce the highest quality sports journalism with a subscription model that would align incentives with producing quality work vs chasing traffic. The approach wasn't without its flaws -- The Athletic consistently lost money -- but it did produce a differentiated, high quality product.  In January, The New York Times bought The Athletic for $550 million. Nine months later, the Times, which has proven that advertising can co-exist in a subscription-first model, introduced advertising on The Athletic. Sebastian Tomich, chief commercial officer at The Athletic and a Times veteran, joined me to discuss the advantages of building an ad model from scratch and how The Athletic is seeking to align brands with sports affinity.

Ari Paparo is a longtime ad tech veteran, not to mention holding the disputed title as Funniest Person in Ad Tech. Some highlights from our conversation:Innovation requires fragmentation. Ad tech’s complexity is a longtime talking point. And it is undeniably a convoluted supply chain that’s given the veneer of plausible deniability to all kinds of corner cutting, at least in my experience as an observer for many years. But Ari points out that “innovation requires fragmentation,” and besides, many of those pushing an anti-complexity narrative just happen to have “anti-complexity solutions” to sell. Go figure.Small publishers can opt out. Google is the simple ad tech solution. Most small advertisers can just default to Google and Facebook. But larger enterprises gravitate to more complexity simply because they have more complex businesses.Apple overturned the industry. Cynical or not, Apple’s use of privacy to restrict data flows has upended how the industry operates and will operate going forward.  It’s of course no coincidence that these privacy restrictions hurt their rivals in Meta and Google. “There's no love lost between those companies, so hitting them in the kneecaps was kind of fun,” Ari said.

Isaac Saul saw knee-jerk distrust in media firsthand as a political journalist at outlets like Huffington Post, where what he wrote would end up being distrusted based on the place it appeared rather than the substance. Three years ago, Isaac started Tangle with the idea that presenting both sides to news stories would appeal to a wide group of people. And that’s proven true. Today Tangle has 8,000 paying subscribers and nearly 50,000 free email subscribers – a 16% conversion rate is amazing. It is launching a new ad program to complement the $30,000 a month in recurring revenue it takes in.Like Semafor, Tangle has its own spin on deconstructing the atomic unit of news, aka the news article. Tangle separates out the factual presentation of the issue, before presenting the view from the left, the view from the left, and then Isaac’s viewpoint. This is hard to pull off, particularly with issues like affirmative action, Covid-era school closures, and, of course, all things Trump.“I am pretty politically incongruent. I try to go and understand, as a politics reporter, what's happening in the world. In order to get a balanced view of any single story, I would have to read 10 publications that have clear, diametrically opposed  political leaning. I can't just read the New York Times. I have to read the New York Times news section and then go read the Wall Street Journal if I really want to get this full picture. And so I was like, there have to be other people like me out there. I figured if I could put all that stuff in one place, a lot of sort of politically open-minded people would read it.”

Alex Kantrowitz is the founder of Big Technology, an independent publication focused on he immense impact of tech companies on business, politics and society. A reporter covering tech for BuzzFeed News, he wrote a book on the tech industry called “Always Day One” and became one of the early trailblazers to decamp to Substack in 2020. Since then, Big Technology has amassed nearly 100,000 subscribers.We spoke about his independent journey – and plans to start a paid tier to his newsletter – as well as the state of the tech industry at this pivotal time. Some highlights:Why a lot of the meltdown in tech valuations is a function of the Federal ReserveHow Apple got away with kneecapping tech rivals under the guise of privacyMark Zuckerberg’s ballsy bet on the metaverseGenerative AI as a legitimate contender for the New New ThingBetting on yourself after seeing journalism businesses struggleProducer: Jay Sparks of PodHelp.us

Semafor, backed by $25 million in private investment, has (finally) launched, marking possibly the most ambitious attempt in recent years to build a new global news brand. At the heart of the effort is an attempt to restore trust in media by rethinking the journalistic product. Despite the long history of failed attempts to "reinvent the article," Justin sees a glaring need to unbundle the article to clearly delineate factual news from analysis and opinion, while providing the context of the news along with countervailing views. 

6am City is turning to the newsletter to build out a network of 25 local news publications it says have 1 million cumulative subscribers and an open rate around 50%. After starting in Greenville, South Carolina, in 2016, 6am has expanded to markets like Madison, Wisconsin; Austin; Portland; and Indianapolis. The 6am formula is to keep new publications’ costs under $250,000, staff them with two-or three editorial staffers and four total employees, mostly making money from ads, both local and regional. It looks for markets based on a criteria developed, including income and education levels, inflows and outflows of residents, charitable giving and retail activity. It aims to get to profitability (and healthy 50% profit margins) in a market in two to three years.Thanks to Jay Sparks from PodHelp.us for producing the episode.

In 2014, Bonnie Kintzer was named CEO of Readers Digest Association, becoming its fourth CEO in three years as it emerged months earlier from its second bankruptcy.After renaming the company Trusted Media Brands, recently shortened to TMB, Bonnie set out to decisively shift the company to a digital model while diversifying its focus to include its other lifestyle brands, such as Taste of Home and the Family Handyman. TMB added Jukin Media, bringing its streaming and video capabilities as well as brands like FailArmy and The Pet Collective.“I had multiple steps that I shared with the entire company. Did we have the right people? Did we have the right culture? Did we have the right assets? Were there assets that we should bring into the company? What did we need to stop doing? Because I think when you're doing a turnaround, you have to really have an incredible amount of focus.”Here’s Bonnie’s three principles for a turnaround:Enjoy the process. Turnarounds can be grinding affairs, filled with their fair share of downs along with the ups. “You have to be a certain kind of person to like turnarounds, and you have to surround yourself with those kinds of people,” Bonnie said.”Be decisive. Tough decisions are inevitable. Putting them off isn’t going to make them any easier.Over-communicate. Change is hard and understandably unsettles people. “When I first got back, people didn't believe that we could do it,” she said. “It was about constant communication and proof points that all of a sudden people [believe] we can do it.”The Rebooting Show is produced by Jay Sparks at Pod Help Us.