As new-media players like BuzzFeed, Vox Media and VICE raise huge sums of money that value their companies in the billion-dollar-plus range, it’s easy to see the media landscape as one in which the big get bigger and the small fry get annihilated. In fact, that’s exactly the sense you get from reading two recent pieces, one by Fusion writer Felix Salmon and one by media gadfly Michael Wolff. There’s just one problem with this apocalyptic vision, however: It’s not true.
Salmon argues that because such huge investment sums are flowing to entities like Vox and BuzzFeed, smaller players serving more niche markets — such as The New Republic, which has been falling apart in fairly dramatic fashion over the past few weeks, due to a series of management mis-steps by its owner, Facebook co-founder Chris Hughes — are essentially doomed.
“As we enter 2015, there’s a relatively small number of large, highly ambitious and lavishly capitalised companies, all of which are competing very, very hard for those precious minutes that under-30s, in particular, spend staring at their phones. It’s hard to match the money being put into those companies when you’re spending your own cash, even if you’re worth hundreds of millions of dollars.”
Big isn’t the only option
Salmon goes on to say that the table stakes for starting a digital media company are getting so large that “the small but self-sustaining bloggy site is a thing of the past.” Unless you have 20 to 30 million unique visitors a month, he argues, you’re “an economic irrelevance” and therefore advertisers won’t touch you — and eventually, your remaining visitors will “inexorably leach away as they move from their desktops to their phones.”
Wolff makes a similar argument in his piece for USA Today, although it’s interesting that Gawker Media — where founder Nick Denton recently shuffled the management structure, and recommitted himself to blogging — is used by Salmon as evidence of how big new-media companies are getting, and used by Wolff as evidence of how smaller entities are being crushed by the new wave of technology-driven giants like BuzzFeed.
“Now, in the BuzzFeed era (BuzzFeed claims 150 million monthly visitors), a media company is really a technology company, with its highest resources devoted to automating and increasing the efficiency of audience aggregation. Gawker, or the Gawker identity, Denton seemed to acknowledge in his memo, is a casualty in the race for traffic.”
Both Salmon and Wolff, however, seem to see media success as being composed of just one thing: namely, huge amounts of traffic gained by reaching a massive audience of millennials and then selling them to advertisers for tens of millions of dollars. That’s what Salmon seems to mean by talking about how the “table stakes” for starting a digital media company have never been higher, and small sites are a thing of the past.
Costs have never been lower
But this is demonstrably not true. The cost of starting a digital-media entity, even a potentially successful one, has never been lower. Ask Jessica Lessin, who left the Wall Street Journal to start The Information, or Lara Setrakian of News Deeply, or Andrew Sullivan of The Daily Dish, who is now making close to $1 million a year from his readers — or blogger Ben Thompson, who went from being a relative unknown to running his own self-financed blog company. As Thompson put it in a recent post on his site Stratechery:
“The thing about Internet scale is it doesn’t just have to mean you strive to serve the most possible people at the lowest possible price; individuals and focused publications or companies can go the other way and charge relatively high prices but with far better products or services than were possible previously.”
There are plenty of other examples of smaller sites that are doing well by targeting a niche audience: Rafat Ali, who runs a travel-information site called Skift, convened a meeting at City University of New York last week of a group he calls the “Verticals Collective” — 40 media sites and publishers who focus on niche topics or markets such as green tech or investing (Brian Lam’s product-recommendation site Wirecutter would be another example).
Obviously, making $1 million in revenue is a rounding error for companies like BuzzFeed or Vox, or even Gawker. But that doesn’t mean these aren’t success stories. The fact is that if you are interested in building a media business around a vertical or niche interest, there has never been a better time — the costs have never been lower, and the potential audience you can reach has never been larger. It may not make you a billionaire, but that doesn’t mean it isn’t possible.
The New Republic’s problem isn’t that it somehow needs to transform itself into a massive mega-media entity like BuzzFeed, it just needs to do a better job of identifying a market need or an audience that is passionate about its content, and then giving them a way of helping to support that mission. And there have never been more tools and platforms available to do that. Size doesn’t matter — unless you choose to define your success based on how many hundreds of millions of unique visitors you reach every month.
Note: Felix Salmon has posted an IM conversation that he had with Ben Thompson, who also disagreed with him about the viability of smaller sites.