Tech Brew Ride Home - (Bonus) The Business of Content With Simon Owens

Episode Date: June 16, 2019

Simon Owens is a journalist who, in his writing, podcasting and newsletters, covers the whole gamut of digital media, from the creator side to the publisher side… from the journalist side to the business side. So, we’ve got a great, wide-ranging conversation today about everything from newsletters, to YouTube, to paywalls to podcasts. And check out Simon’s great podcast, The Business of Content. Sponsors: Instacart. Promocode RIDE at checkout. Wix.com/podcast Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to another weekend bonus episode of the TechMeme Ride Home. I'm Brian McCullough. Simon Owens is a journalist who, in his writing, podcasting, and newsletters

covers the whole gamut of digital media from the creator side to the publisher's side, from the journalist's side to the business side. So today we've got a great wide-ranging conversation about everything from newsletters to YouTube to paywalls to podcasts. And do, in fact, check out Simon's great podcast. The Business of Content, because, as we say on this episode, we recorded these as a back-to-back twofer. I was on his show, and he was on this one.

Please enjoy Simon Owens. Basically, Simon, you cover, I think, what you call the business side of content, the business of content. Yeah, my tagline is how people create, distribute, and monetize their digital content. So in your mind, is that from the creators or journalist standpoint, or is it everything? Like, how do you describe the beat? Is it just like even publishers, the whole shabang? Yeah, I mean, it's really, I'm really fascinated in like what, how, you know, really innovative ways that people are going about creating content, whether that's articles, videos, podcasts, newsletters, or whatever, like, what went into the thinking of creating, what goes into every day, what that, what that, person does every day to put out this amazing content. But then I'm also really fascinated and

distribution, because I don't think, I don't believe in that adage that if you create great content, people will come. You really have to think about what's the way to optimize it, how you distribute it, what platforms. And then also, I've always been fascinated with just the monetization side of it and how those three different things come together. Part of it is because I've worked in both journalism and then also marketing and PR. So I've worked on both the brand side and the journalism side, whereas I think a lot of journalists are just kind of, they think mostly about the content side and they don't think about how the business, the business behind that, the model that actually funds their journalism. Or the craft side, I guess you would say or something.

Yeah. Well, this is why you're one of my favorite people, favorite sorts of people to talk to because we can hit so many topics. So let's start with one. that you just mentioned, which is newsletters, how all of a sudden, newsletters are such a huge thing. And it's, well, actually, there's several different ways we can go about this. But like, you wrote about how one of the main things about newsletters is that they're outside of platforms so that publishers have more control, but also that even though that newsletters might not have the virality of something like social media, publishers are finding that newsletters are a more, like, loyal audience.

Yeah, and it's kind of since, you know, we're talking about this on a podcast. You see a lot of comparisons made between newsletters and podcasts, and they talk about the intimacy and how, you know, something like a normal web article or video or something like that or social media. It's just, it's just become such commoditized because you're, you know, you open Twitter and it's just, content is flowing through at a million miles an hour. But, but with like podcasts and newsletters, you have to invite them into your life. Like, you have to specifically not only sign up for a newsletter, but then you have to go into your inbox and for a lot of email platforms, confirm, click on a link to confirm. It's literally double opt in. Yeah. Yeah. And I mean,

In some ways, like you said, that doesn't go viral. It's a lot harder to grow your newsletter audience. But because they have to go through so much trouble to invite you in, those people have a much stronger connection to you, reading you for becomes a habit as long as you're continuing to put out a good product. And yeah, and I find that it drives way more traffic. Like if I send out a tweet, I look at my Twitter stats pretty religiously and all the stats for all the different content I create,

you know, maybe 1% of my followers are going to see my tweet, whereas, you know, a newsletter that I send between 30 and 40% of those people who have subscribed are going to open that newsletter every single time I send it. And so compared to other platforms and penetration, there's just no comparison. Well, right, you wrote about like with the New York Times and like, I think, I'm actually looking at it right now, like Kandane Nas data team found that whether someone subscribed to a New Yorker email newsletter was the number one indicator that they'd eventually pay for the magazine's content. But that's something that I've wondered about is, like, is it just loss leading or like lead generation? Like, what about the actual monetization of newsletters? Like, what about, because I don't know that I've read this anywhere. Like, what about ads in newsletters, like literally monetizing newsletters as standalone things? Yeah, there are newsletter advertising platforms. There's this guy named Ernie Smith. He has a newsletter called

tedium that has a lot of subscribers. And he kind of experimented with some of these. And there's some kind of, you know, there's like exchanges that you could go to. But it's not, and it's definitely a much of a more of a direct sales type of thing, less programmatic. So usually you have to have someone who's like actually going out and selling those advertised, those ads, basically. Where I'm seeing a lot of the monetization with newsletters directly is through paid

newsletters. In fact, I have an article, article going out today. So because you have that kind of intimacy, you have a stronger connection. And like you said, there's all these studies that show that, you know, a newsletter subscriber to the New York Times newsletter, one of their newsletters are twice as likely than a non-newsletter subscriber to turn into a paying subscriber. Like you said, with the New Yorker, it's the number one indicator. The Seattle Times found that newsletters drive 15 or 15 newsletter subscribers are 15 times more likely to turn into paying subscribers than Facebook followers. So a lot of people are finding out, are thinking, you know, if they're so likely subscribe, why don't we allow them to subscribe within the newsletter to be

in order to get like a premium newsletter delivered to their inbox? So you're seeing platforms like there's one called substack where you start by trying to generate free newsletter subscribers and then you start slowly trying to convert them into paying subscribers where they can get extra newsletters each week that only paying subscribers can get to. That was really kind of pioneered by this guy named Ben Thompson who runs this blog called Strateree. Everyone listening to this show knows Stratory.

Yeah, yeah. So, yeah, of course, we're on the TechMeme podcast. Yeah, so you're seeing, that's where you're seeing a lot of direct monetization with newsletters. Yeah, that's interesting. I actually recently had a conversation with Substack. Let's flip it around, though, because on the one hand, publishers are thinking of it as sort of like, I guess, lead generation or like,

maybe a more polite way of saying it is as like growing audience affinity and loyalty and things like that. On the publisher's side, I feel like in digital media, everyone, everyone has been putting up paywalls recently. Are you getting a sense? Have they been successful? Because I feel like, again, being sort of an internet historian, paywalls are things that were always verboten, that never worked. Have we gone through some sort of like through the looking glass moment where now they are

working for publishers? Well, I think like norms are changing. And that's one of the reason why paywalls didn't really work in the past. because it was usually like one, you know, newspaper or something like that striking off on its own where most, the vast majority were free. But now that like the industry in mass is switching to these paywall strategies, I think it is actually kind of changing the mindset of the average consumer. And if you look at like recent polling on whether someone is, uh, is willing to pay for

digital news, it's still strikingly low. something like less than 20% of people say that they would be willing to pay for digital news. But we're finding that every single year, that number is jumping up drastically. It's basically exponentially growing. It's doubling year over year. Or maybe it's not quite doubling, but it's growing very quickly. So I think it's about kind of changing the paradigm and the way that people think about it. Now, the other question is, is like, how many newspapers or news sources will you actually pay this

subscribe to. There's the vast majority of people who do subscribe to a new source online, only subscribe to one. And then it drops precipitously after that for people who subscribe to two or three. So, I mean, I think that that's another thing that they're going to have to deal with. And there's this question of like how many subscriptions are too much. Are people coming late to the game? Are they, you know, not going to be very successful? That's something that we're finding out right now. Like right now, we're only reading about the, the large. largest success cases like the Washington Post, New York Times, Wall Street Journal. We're seeing some early data that some of these downstream newspapers like the Dallas

Morning News, the Seattle Times, they're not really converting their readers at a high enough pace for them to make up for the massive amount of money they're losing from, you know, print advertisers abandoning them. Well, that makes me think of maybe not for the newspapers, but, well, some for the newspapers, But Apple News Plus, which you've written about, and I want you to eventually make the argument that you made that I read about why it won't cannibalize publishers paid subscriptions. But first of all, I feel like Apple News Plus kind of dropped like a stone, and I haven't heard anything more about it. Like, on your beat, have you heard, like, is it a success? Is anybody doing it? Are publishers happy with it? Do you know anything at all?

So Apple News itself has been a tremendous success in terms of actual user adoption. So that's the free version. Last I heard, it had somewhere between 50 and 90 million regular users. I saw a recent headline. I haven't been able to dive deep into it that the Wall Street Journal isn't seeing a lot of meaningful revenue from it yet. I mean, of course, it's going to have a big blowout announcement, but it's going to be slow going in terms of conversion and they still have a lot of iteration in the product because from what I've seen, it's just not well designed. It's basically like a lot of these magazines are just plopping

glorified PDF files onto it. So it's not a great user experience. So the question is, is Apple really investing the resources and helping publishers having kind of turnkey solutions for, you know, actually converting their articles into something that people will actually want to pay for to read? So just real quick, regurgitate for me. Why do you think, because I'm super skeptical about this, why do you think Apple News Plus, if it works, might actually be a good deal for publishers? Well, I mean, look at, a lot of the arguments against Apple News Plus, you could have made the same argument against Spotify in the music industry. You could be like, you know, travel back to 2007, 2008, and these music labels would be like, you know, why am I going to give you my music, library, all I'm going to be doing is cannibalizing my iTunes sales or my lucrative CD sales.

And if you look at what the labels make on a CD sale versus what they make on a single stream on Spotify, there's no comparison. But what actually happened is that, you know, in the past, actually, studies have shown that a very small, even when the music labels were at their fattest and were receiving the most revenue back, you know, in the 90s, It was still like a relatively small number of people within the total population that were buying CDs on a regular basis. It was just that CDs just had such a high profit margin. What Spotify was able to do, and obviously later newcomers like Apple Music and Title, was that they were vastly able to expand the user base of music buyers and to expand how much they were paying on month and average. because you might only buy back in the back in the 90s you might only buy like two or three new CDs a year whereas now you're you're paying $10 a month per month that's under $20 a year so it both vastly expanded what the average user was paying and it vastly expanded the actual ecosystem of people paying so this gets back to kind of what people call subscription subscription fatigue sure you're going to spend $15.

a month for a New York Times subscription. Maybe you might buy that New Yorker subscription or some other magazine you like, but are you going to subscribe to four, five, six newspapers or magazines? So this is talking about those downstream magazines that might not be your first buy. And so, like, my argument was, in best case scenario, you know, Apple and, you know, obviously Apple's on over a billion devices, it could, you know, vastly expand the number, the total number of people who are paying to subscribe. So by expanding that universe, yes, each publisher would be making less per unit or yet less per article, but it could vastly

expand the number of people who are subscribing for news, you know, widening the revenue. But the other point I made is, you know, I made an argument not necessarily that it would succeed, but it would be, it would not be a neck negative. It wouldn't, cannibalize publishers revenue. And my argument for that had to do with kind of the user experience of Apple News Plus, that they were going to be mainly reading it on their devices. So that would be locked in. So obviously, Android users would be kind of excluded.

PC users would be excluded. And also that a lot of these publishers, like the New Yorker and others, like not their entire inventory. For the New Yorker, for instance, only articles from their print publication would be available on Apple News Plus, whereas they have a very robust daily publishing output for their content that they're doing with very high-quality content. So that there would be plenty of opportunity for a certain type of subscriber to subscribe to Apple News Plus that either A might not be a typical subscriber to, let's use the example

of the New Yorker. So you're bringing in a person who wouldn't have subscribed to you anyway, but also that Apple or the New Yorker could have enough differentiation in its own product to where, you know, there would be an entire different use case for someone subscribing to the New Yorker versus Apple News Plus. Switching gears a bit, I've been ranting about YouTube lately, but not, I'm not to go into my rants, but there's been this, I feel like it's been going on for a while now. The idea that creators on YouTube feel like YouTube is fundamentally changing and leaving them behind. And you wrote about that a bit.

Like, is YouTube leaving behind the concept of the site that we've understood where, oh, anyone uploads video? And if that's the case, isn't that kind of inevitable? Like, that's what they would have to do eventually, right? Yeah, I mean, that's kind of like the argument with every, platform is the original creators who fuel that platform's growth eventually get kind of left behind as the platform starts courting these shinier objects, these bigger corporations, these bigger media companies.

Like I remember I was an editor at US News and World Report and Google Plus launched. And we soon had like a person from Google Plus who worked for Google, reach out to us and say, hey, if you guys start posting regularly to Google Plus, we'll help direct people to follow your page. And basically we were like, okay, you know, free followers. So we started posting to Google Plus. And basically, we just, all of a sudden, we were starting, Google had turned something on where we were being recommended to followers. And before you knew it, we had over 300,000 followers on Google Plus. You know, did we earn those followers? No, we were given those followers by virtue that we were mainstream. Can I just interject real quick? Like, people don't

know that. When people see, well, some, a podcast has, well, people can't see what podcasts have, But a YouTuber has so many subscribers, a Twitter. But there was a time when Twitter would flip a switch, and all of a sudden you'd get 70,000 followers because they were recommending you. People underestimate the early adopters in any platform, in any media, and any whatever. Like, even, you know, Twitch people now and things like that. Well, early on, they were promoting certain people. And that is really underestimated for people being like, well, I'm going to become a Twitch star.

Well, you're maybe too late because it's, unless they turn the switch, like, it's not that easy. You're going to have to grind it out. Yeah. It's like, same thing with like Medium. Like at some point, I was an early adopter in Medium and I was publishing a lot of content there. And all of a sudden, somebody had flipped some switch and it was obvious that new users who were signing it for Medium were getting recommended my account. So then I had like 10,000 new followers like overnight. So yeah, that definitely happens.

But like with YouTube specifically, they found that, you know, studies have. now shown with the YouTube trending page, which you think is completely run by an algorithm, but what they found is it's actually very much human curated because they find that, you know, mainstream news sources or mainstream sources like CNN or the late night shows like Jimmy Fallon or Stephen Colbert, they can make it onto the trending tab by having only like 10 to 20,000 video views, which in the realm of YouTube isn't that many, whereas like a independent creator, like a Logan Paul or a, uh, Ethan Klein, they need to hit like 10 million views in order to make it onto YouTube's trending

tab. So you can see right there that's like dynamic in play where YouTube wants to encourage more posting from mainstream media companies because that's the kind of stuff that's safer for brands that advertisers want to be advertising against so that they're lowering the bar for these mainstream media companies and it's becoming a harder ecosystem for a newer entrant or an independent creator to thrive in. Well, see, and that's also the dirty secret of all of these platforms is when it behooves them, the algorithms are faceless and inhuman, and we don't know how they work. Yeah, meritocratic, supposedly.

Right. But then also, there's thumbs on the scale when it's useful for them, which is... Yeah, and I still write for mainstream news sources when I'll freelance for them. I haven't worked in a full-time salary job for mainstream news source in a while. And so I really have been focused on building out my personal brand and my own content that I own. I put a lot of emphasis in my podcast, a lot of emphasis in my newsletter. And as an independent creator, it's very frustrating to me. Because, like, for instance, like Facebook, like I barely pay attention to my Facebook page

because Facebook is siphoned off so much reach. I'm a little bit more focused on the Facebook group that I've been running. But yeah, like I feel like the thumb is always on the scale. It's hard enough as an independent creator with no, not the huge resources of a media, company to get ahead and get your content notice. But then on top of that, when you see that the platforms are giving free distribution to these media companies, and that's why it's always rich that these media companies are always complaining about Facebook and Google, not sharing money and how it's siphoned all this money away from them and stuff like that, whereas, you know,

they actually get favored a lot in a lot of ways by their recommended user lists and their algorithms where they're specifically, like you said, the thumb is on the scale in their favor. Yeah, listen, Marie Kondo got a leg up at some point, and she knows when that happened. So you can't just become a Marie Kondo by just throwing stuff up on. Okay, we're going to end by promoting your personal brands and all of your channels and things like that. But real quick, last one, because we're on a podcast. One of the things that you wrote that I had never thought about, because I always, you know, I'm in podcasting. You see all these things about how, you know,

podcasting is increasing. Such percentage of Americans listen to a podcast weekly, and that's going up such percentage over year over year. But, like you pointed out, that podcast listening only accounts for like 4% of listening in cars right now. And 51% of Americans say they've listened to at least one podcast, but only 22% of Americans listened to a podcast last week. So that's like tens of millions of people have tried this medium

and been like, yeah, you know. So I'm curious what you think about podcasting as a platform right now, either for yourself or just generally in the big picture of a medium and an industry. Yeah, I mean, I think it's going to really continue growing really quickly. Like, one of the, they always talk about the serial moment when, you know, Serial launched and then that just exposed a lot more people to podcasting. And so not only did Serial have huge listeners. numbers, but generally all podcasters who were publishing at that point saw a huge lift in their

and their followings and their download numbers because it was bringing more people into podcasting. So we're waiting to find out what the next serial moment is going to be. And one of the things I predicted, and this is kind of what you alluded to with those statistics is I think a lot of people are trying podcasts. Like they'll open a podcast app for the first time. They'll download a podcast they heard about. And they'll be like, oh, this is pretty cool. This is a pretty good experience. But it's not a habit because they've just downloaded that one podcast. They need to wait to a week later until the next episode comes in. They might not be remembering to continually open up that podcast app. So I think, you know, the next step forward in terms of really explosion and growth

is some kind of podcast recommendation engine or some kind of way that podcasts can be put in place in front of people so that they don't have to go through a lot of energy to hunt down new quality podcasts. My theory is that Spotify is going to be that because it already has 200 million users who are listening it or you're already opening that app every single day to listen to music. So if it can tastefully and without too much intrusion, start inserting podcast episodes into their feeds, then they will organically start, you know, incorporating podcasts into their daily lives. and then at that point we might see like a really huge explosion in podcast listening. Well, your words to God's ear.

Before we go now, we are officially going. Simon, plug your channels, podcasts, newsletters, Facebook groups, whatever. So the one thing, so this is kind of like testing a theory that I keep on hearing with podcasting is I hear that the best way to grow podcast audience is by hearing about it on another. podcast. So I'm just going to plug one single thing. And it's my, my podcast, the business of content. And I have a special treat for your listeners. I just interviewed you on this podcast. So if you go and subscribe, they're going to get to hear how basically the daily tech meme ride home podcast came to be. They're going to get some really good behind the scene, juicy tidbits about, you know,

how you blackmailed your weight. No, I'm just kidding. How you got you, you formed this podcast. Yes, yes. So, and I, and I have really high. If you, if you work in media, tech, uh, marketing, advertising, I, I interview. Like I just had the president of Vox Media on. I've had, you know, top executives at the New York Times, Slate, Quartz, the financial times. If you, if you work in media, you should definitely download my podcast.

It's called the business of content. And let me, um, let me say that I listen to. that podcast and it's fantastic. So yes, business of podcasts. Thank you, Simon. Business of content. You know what? We talked about this earlier about editing. I'm not going to edit that. My listeners know that I'm lazy and going. So business of content on Apple podcast or wherever you get your podcast or whatever. Thank you, Simon. Yes, thank you so much.