In the wake of Jeff Bezos buying The Washington Post in 2013 and the heady “Democracy Dies in Darkness” days following the 2016 election, The Washington Post was considered a credible rival to The New York Times. That’s no longer the case. New CEO Will Lewis is embarking on a turnaround at the Post, which lost $77 million last year. As Lewis put it, “We are in a hole, and we have been for some time.” On this week’s episode, Matt Cronin, founding partner of House of Kaizen, joins to discuss the Post’s strategy as laid out by Lewis.

Skip to topic:

• 00:00 Introduction and Breaking News
• 01:00 Challenges Facing the Washington Post
• 02:20 Industry-Wide Transitions
• 03:51 Engagement and Product Strategy
• 05:49 Podcast Introduction and Format
• 06:12 Will Lewis's Turnaround Plan
• 09:29 Subscription Models and Audience Segmentation
• 22:13 Historical Context and Missed Opportunities
• 28:06 Peak Subscription Debate
• 31:47 The Paradox of Choice in Consumer Behavior
• 35:52 Volume vs. Value in Subscription Models
• 42:09 Challenges of Subscription Tiers
• 46:40 B2B Opportunities for News Organizations
• 51:59 Microtransactions in Media

Hey it's Brian.

The following is a conversation I had with Matt Cronin, founding partner of House of Kaizen to discuss the outlines of the Washington Post's turnaround strategy, uh, as laid out by Will Lewis a little over a week ago.

We recorded this on Friday and wouldn't you know it, news dropped today that Sally Busby, the Post's editor, is leaving that position immediately.

there's two ways I could look at this.

I guess I could look at that as this is a great peg for this episode.

And the other one is.

But wait, we didn't discuss this news during it.

We're just gonna go with it.

former Wall Street Journal editor in chief Matt Murray is going to take, Sally Busby's place through the election.

After which, former Lewis colleague and current Telegraph deputy editor Robert Winnett will take the helm there.

Matt will move over to oversee a third newsroom devoted to what the Post calls service and social media journalism.

And run separately from the core news operation.

some quick thoughts on that.

and you can check out my full thinking in today's edition of The Rebooting newsletter.

first I think it's an acknowledgement that the post needs to change its product.

It's just something Matt and I discuss a little bit in this episode, but without these important details, recently, Pucks, Dylan Byers, who enjoys poking people in the eye.

Let's be real.

Got some pushback when he described the post as lagging on the editorial front and post staffers, point to it's three Pulitzers.

And I agree, but this is a business.

And, as Matt and I discuss, the post has a serious engagement issue on its hands.

It's audience, is about half what it was just a few years ago, and worse, the people who are coming are rarely staying, around, very few are staying for more than one story, and you can pull different optimization layers, and we go into some of those that we see the post, enacting, but at the end of the day, these are going to be incremental.

and just those few data points I referenced, say that you need to fix the core product.

And in a news organization, the core product is the reporting.

Okay?

And this is not a knock on anyone at the post.

but any new leader like Louis is going to want to bring their people in place.

I think I mentioned in this episode, it's a little bit like when you call a plumber in, the first thing the plumber does is that they ask, who did this?

We're going to have to start all over.

At least that's been my experience with plumbers.

And I don't think it's all that different when you get into any business.

so this is part of lots of turnover.

I think we're seeing in newsrooms and you see it at BI, at CNN, Wall Street Journal, and other posts.

These are all different, but I think they share one common thread.

And these are places in transition.

The need to position themselves for a new era.

there is a vastly changed environment and it is likely going to change even more, and that is going to require painful choices, and in many of these cases, new leadership.

That leads me to my second point, which is actually about Matt's role.

I've gotten to know Matt a little bit, over the last year or so, and I found him to be a real pro's pro.

And I think, the challenge to this role, and yes, it's vague because you're betting on the person to figure out the future and there's no blueprint for the future.

I think this, this role is vital.

these companies need d to completely rethink how their product is made, packaged and distributed.

Separating from the newsroom tells me that Lewis sees resistance, the kinds of big changes he feels are needed.

and that's normal.

And undoubtedly, Jeff Bezos is pushing for more change and faster.

he just doesn't strike me as an incremental change kind of person.

and finally, the choice of Wynette, will, will change.

Raise some eyebrows, I'm sure.

he spent his entire career in UK journalism, not in the United States as far as I know or that I can tell in my Googling.

I was sitting in one of the front rows, this fall at the, Semaphore Media Summit.

I, I urge everyone to get the, go to the front rows because for some reason people skip them, so you'll always find a good spot.

and Ben Smith had asked the Wall Street Journal's editor in chief Emma Tucker about Brits taking over American media, and Emma played it down.

but now with her, Mark Thompson and Wynette, three makes a trend.

again, I don't, I don't really know Emma or his reputation, but I will point to what Emma told me on this podcast when I asked about her view of American journalism, and she noticed She noted, as Lewis actually did in an interview with Ben, that American journalism is a bit self serious, and I think that can sometimes hold it back.

I think we're seeing, the pressures within these organizations, Emma is, is seeing that at the Journal right now.

There was a, Brigade of employees that were doing some kind of post it protest at her office on Friday because of some more cuts that are coming there.

And, I think that this is a time where, when a lot of these organizations are going to bring in people with mandates for change and change is hard to enact.

And, unfortunately.

some people, undeservedly, suffer a lot of disruption at, that's just part of change.

And, I think that, by bringing in WNET, it's a acknowledgement that people are looking for answers outside of the norm.

he's best known for an exposé of, members of Parliament's abusive expense accounts.

And, and it's a story found, from what I've read by paying, actually, for documents.

And the British press, in, in my experience, is far more aggressive, in some ways.

And, and certainly more freewheeling, And I think that's thanks to a, vibrant tabloid culture that we really don't have in the United States.

I mean, tabloids have always been particular part of the news ecosystem and sort of look down upon, I believe, from these kind of prestige publications.

but I think you can argue that for News publishers to cut through this information space that I always talk about, they're going to need different approaches, and, they're going to need fresh thinking, and they're going to reorient these products if they're going to reach new audiences.

This is something Lewis said, and, that means to slip in all kinds of cliches, there can't be.

sacred cows or all the rest of that.

so I'm really interested in seeing, how these organizations reorient.

So with that out of the way, here is the podcast with Matt.

Welcome to the rebooting show.

I am Brian Marcy.

This week, I'm trying something a little bit different.

I want to dig into the recently released plan to turn around the Washington Post, by Will Lewis, News Corp veteran who joined the post at the start of the year.

like many, In these kinds of roles, he then embarked on something of a listening tour, and this is par for the course.

It's a great way to buy time, by the way.

it matches what was done by Mark Thompson at CNN, and in many ways what Emma Tucker has done at the Wall Street Journal.

I think there's, there's some comparisons to what's going on at The Post right now, too.

And let's be real, The Post is in need of reorientation, and this is something that, Will has made very, very clear.

Ever since Jeff Bezos bought it, the mandate now is to return to profitability.

It lost 77 million dollars last year.

Don't think that's really good.

It's less than the 100 million dollars it had lost.

but it has seen its audience drop by half since 2020.

the sugar high of the Trump years and all that, those boasts of, Democracy dies in darkness have given way to what, in my view, is something of an identity crisis.

and that, that needs to be resolved.

I mean, what does the post want to be at a time when being all things to all people is nearly impossible?

I mean, will it give up on those national pretensions of a decade ago when it was bragging about its Comscore uniques passing the New York Times?

that seems like a different generation.

the Times is simply broken away from the pack.

Lewis's recent turnaround plan has many familiar elements of all of these plans.

there's talk of more sophisticated use of data and analytics, being audience centric and zeroing in on areas where the posts can provide unique value.

like most publishers, the post is looking to expand its subscriptions base.

And, and here, I think, Lewis has some really interesting ideas that we'll spend some time on and to break this down evaluate this plan and what it means for the broader industry.

I am joined by Matt Cronin, founding partner of House of Kaizen, a consultancy that works with publishers and other companies with recurring revenue businesses.

Matt is something of a podcast regular and also a great partner of Rebooting.

Matt, thank you for joining me and being game to try this format.

For the first

time,

Yeah, sure thing.

Thanks, Brian.

being the first of anything is difficult.

I remember reading the Atul Gawande book complications about being the first, You know, someone has to be the first patient that like a doctor intubates, can be a little uncomfortable.

I hope it's better.

I hope this experience is way better

Yeah, I'm always willing to try something new for sure.

We'll

within reason, okay, let's, let's, let's get into this.

because as I said, Willis joined, in the beginning of the year and yeah, look, he's been very upfront that things need to change and this is a little bit par for the course, right?

I always think that.

Every anytime you come into big job, you just You just sort of channel the plumber, right?

Anytime a plumber comes in or Oh, who did this?

We got to tear this all out.

We got, you know, so that's, that's normal.

But I think it's, what he laid out was, look, it, it ends up being pretty broad, but it's interesting because I think it speaks a little bit to what is overall, Going on in the industry.

I mean, I see there's a lot of places that there's, there's a lot of external challenges and places need to retool.

Is this something you're seeing?

Yeah, absolutely.

I'm super excited about what they're doing at the post and I, and I think what happened over the last couple months is really interesting because one of the first things that Lewis said, I feel like it kind of threw everybody a bit of a curve ball where he, he kind of indicated that he didn't see subscriptions as much of the future.

and in fact has now come out with a plan that's pretty subscription specific.

and

a big asterisk there, right?

There is, and it'll be great to get into that, but it's just a really interesting sort of higher level perspective on where the industry is and what people view as the right way forward.

Because I think a lot of people responded well to his statements about the idea that this wasn't about subscriptions.

Sustaining the industry going forward.

and it was about other things perhaps.

So, we're kind of seeing the, the fact that everybody is trying to figure this out right now.

And what excites me about this current move is that we have.

As you're doing with this episode, somebody who's willing to take a risk and be a bit of a leader and try something new and different, so that others ultimately can, can, adapt and hopefully follow and take their own risks and adapt to their own, regions and audiences in such a way that they can better serve them.

Yeah, and, and I, I've never met him, but he's apparently a charming Brit and there's a lot of these charming Brits out there who get these jobs.

I mean, Emma Tucker, another charming Brit.

She was on this podcast.

Mark Thompson has not yet been on this podcast, but he's another, he seems charming enough.

He's definitely British.

so that'll give you a little bit of time, but, people are going to see results.

I mean, we already saw at the wall street journal yesterday.

they're, they're having more cutbacks and, Emma was on here talking about the difficult choices that need to be made.

Something I'm thinking about writing about next week is because, hard choices are hard.

And, you've got unionized workforces who are protesting and they were I don't know if you saw this, they were putting like post it notes on, on her office at her, her EA had to go out and sort of be like a human shield.

I mean, which I admired, going into the front line, but then some tall guy sort of went top shelf on her, went over top the assistant and still put the, uh, but you know, you do what you can, but not to make light of, because these, these changes always involve people.

These are people, businesses, and when you need to reorient the cost base, Yeah, it's not just going to be like through cutting a few sass software subscriptions.

Unfortunately, there's a human cost to these things.

even though Lewis says that, that job cuts are not part of his plan.

So let's get into, what, He's been talking about right?

So he talks about this broad formulation of newsroom 3.

0 which is around, the regular things of social AI and personalization and One of the things that I was interested in and I don't know if you sort of detected This is I didn't really see like a North Star exactly You know what I mean?

Like I think of, you know, the, the, the FT just came out with a very neat, North star and a lot of these businesses.

Publishing businesses are difficult because they're they're trying to do so many different things.

and a lot of that's just the market that there isn't a clear north star is, is, is the whole idea of that kind of north star.

not realistic for a lot of these types of publications.

I don't think so.

I think a North Star is fantastic and I really admire what the FT has done in sharing their North Stars, even as they've evolved over the years.

I think it's a, it's a really important strategy.

People may have doubts as to whether or not they can achieve those North Star goals, and certainly they'll take some criticism for it.

But having a North Star in our view is critical to ensuring that as decisions get made further and further down the organization and throughout the breadth of the organization, that those decisions ideally point towards that North Star and that everybody's moving in the same direction.

And we often find that that isn't the case.

As you point out, very often these large organizations have multiple competing interests.

We've talked about this before, the competing interests in the industry, but also competing interests within the organization.

And it's really hard to get everybody moving forward on a sustainable path without that North star.

So I think it's a, it's a very fair and I think insightful criticism that this new Washington post.

Quote unquote Build It plan is lacking a North Star.

makes me wonder why, like, why not go to the extent of actually defining more specifically how they're gonna measure the success of what build it means.

yeah, well, I, I saw something, you know, Carl Wells, who was brought in, Carl was at, the information and for that, the wall street journal, and he had said for too long, we were a one size fits all organization.

Right.

And that.

I think that kind of speaks to it in some ways, the challenge, right?

Because, a lot of times, the, when the, when the overarching strategy gets, gets translated into tactics, it's like, we're all one thing or we're all another thing.

And, and I think what Carl is getting at is something we're seeing across the industry, which is thinking about audience segments and building specific products for those segments.

There is no.

audience, really.

I mean, treating the, treating, quote unquote, the audience, I mean, which is better than users, let's be real, but like treating the audience as a monolith, something that we've discussed is kind of outdated.

yeah, absolutely.

We've talked about this so many times and, and it's one of the reasons why I'm so excited to see what they've shared of their plans because it does to me feel like they are moving in that direction of.

What we've referred to as intentional audiences, they are recognizing that it isn't a monolith.

It's not one homogenous group, quote unquote, audience, but in fact, there are lots of reasons why people would want to consume this content.

They have various jobs to be done.

And one of the first steps that any media organization can begin to take is to just simply break down that one large group into smaller groups.

smaller groups, but even if it's just two or three, having more options for the ways in which people can engage with this content and pay for this content and create value for it is, is going to do wonders.

I think for not only their acquisition components, but also their, their ongoing engagement in, in retention.

Yeah.

Well, they have an engagement issue.

that's pretty clear.

I think 20%, only 20%, consume more, Then one page per visit and look, the reality is when you get into the analytics of just about any publisher that is, like 1.

3 for most like it's

hmm.

the, the numbers that, as I said, they used to send me press releases about how their com score uniques were, were more than the New York times.

And meanwhile, the New York times.

Well, they had made the move to subscriptions, so that was not the game they were in, but whatever.

and, that when, when you're relying on a lot of traffic from, from Facebook at the time, political content was, was going nuts in the Trump, presidency.

those are often one and done people.

and I'm just seeing like on a, On a product basis, how I'm always interested then to go and see how this reflects in the product.

And the different levers that they're trying to pull in order to get people deeper, because I usually, I subscribe to the post, but, I usually arrive there from, I, I've been very open about my, my Twitter addiction.

I'm trying to, I'm trying, I really am trying, someday I'll quit cold turkey, but like, you know, I'll arrive from Twitter, from like a newsletter and, they're, they're, they're trying to chase me around to, to, to get into more, to more content, but solving that engagement, issue is something that I hear come up.

A lot with news publishers.

And some of that is a macro environment.

I think I have no data, but my vibes tell me it's a macro challenge.

Cause I hear it from a lot of people that the, I don't want to say it was a false signals of like engagement during, the, the go go years, but people are wearied and particularly with news content, they are, tuning out a little bit.

And I think that's a sensible, I think that's a sensible decision.

You know, it was like, it was going back in a time machine yesterday, with the Trump verdict coming down.

And I gotta say, I, I wanted to go, but I was like, I don't like this.

Yeah.

Yeah.

No, I agree.

Well, I think it's an interesting, thought process here when you look at what the Washington Post is proposing to move things forward, because I think at first blush, it appears to be what many might consider to be an acquisition strategy, right?

Let's roll out lots of different ways in which people can engage.

Some of them are innovative.

Some of them are enhancements on what exists currently.

And it makes you wonder if their problem over the recent years has been retaining their existing audience and engaging them to your point, to a better degree, why would they roll out a new acquisition strategy?

And we know from working with lots of different publishers in this space that engagement is kind of the, it's the holy grail, right?

If you do engagement well, you will retain your audiences, but you will also attract new audience.

It has a halo effect on either end of the, of the subscriber journey.

I think what's actually happening here is they are, if you look at the details of how these new subscriptions and the product enhancements are rolling out, I think they are actually centering around this idea of trying to improve engagement.

That's my read on it.

And, and, and by trying to improve on engagement with these enhanced types of content and product features, they then have to segment them out in different ways and different tiers as they've done.

But.

What I'm curious to know is, did they, through this listening tour and what other forms of customer research did they actually embark upon to determine what would drive greater engagement?

To your point, this environment, this news media environment, the product hasn't changed.

And we've talked about this before as well.

The product just hasn't changed for so long.

And it needs to, because I think it's less a matter of the content driving the sort of the lack of engagement and the apathy and all the ways that which in which younger audiences have been described or rather justified as not consuming it.

And I think what we're missing is actually the format.

younger audiences and I'd be curious to know how people are defining that age group because I actually think I fit into this, this behavior and I'm certainly not a young person, but, people are used to opening up their access to content and seeing one thing at a time.

And they can spend hours and hours looking at one thing at a time.

And they are deeply, deeply engaged.

But in the news content product space, you open up the, the portal, so to speak, and you're inundated with a million things, even if you come to just one article page, you're inundated with many, many different things.

And this has been the case for so long.

It's like spaghetti against the wall.

Sometimes it

it really is that's, that's it.

That's

And I think the message it gives to your, your audience is, Oh, we have no idea what we're about.

Like, we don't know what we, we're just going to throw everything at you.

And we don't have any confidence in, in, in a, we clearly don't know you.

Because we're just throwing everything at you and, obviously news publishers do not have a tick tock algorithm there and, tick tock has a lot of content.

They've got a lot of problems, but they've got a lot of confidence in that, Hey, we're gonna put stuff in front of you that you're gonna, that you're gonna be into.

it might be a silly dance video.

It might be whatever, but they're really good at that.

That's why I stay away from it.

Cause I know that they're good at it.

Yeah.

No, it's a great example.

I think that's exactly the kind of experience.

So, you know, absent the consideration for the content, which is important as well, but just thinking about the interface.

this is a really interesting consideration for lots of news publishers to, to, bring to the fore and recognize that TikTok, Instagram, others are setting expectations for consumers, even Netflix, right?

So Netflix is number one objective when it comes to growth is engagement.

It's all about engagement.

So doing things like having auto play trailers as you're exploring what you might want to watch is one of their most successful tactics.

And it's It's just interesting to me to see how all these other environments in which content is presented are innovating and adapting and testing and optimizing these experiences, whereas the news product simply hasn't been taking those same sorts of more innovative leaps.

To meet the expectations of the users.

These are the same people.

The people who watch Netflix are the same people who read the Washington Post, but their experiences are totally different.

And maybe there's a way we can learn from one another.

So I say this all because I think that was hidden in this strategy that we have a little bit of insight about.

Is hopefully a lot more product evolution that's driven by customer insight and a lot more intentionally oriented towards the kinds of things that they now expect in a modern media world.

This could be really exciting.

yeah, and I also think, like, when I think of product, I also think of the content within the product, not just the presentation, right, and, and I think that, look, I've read the Washington Post for 25 plus years.

I moved to Washington for a couple of years, my first job, and, I got the Washington Post subscription.

This is when, Clinton was being impeached.

Print newspaper, of course.

and, at the time it was always it had an identity crisis.

Then it wasn't sure whether it was a local paper or if it was a national paper.

It was almost like it stumbled into being quasi national paper because of.

Of Watergate, really, and because the fact that the government was was there.

And, I think if I want to talk about the future, but I was a history major.

So I like to go back.

I think about that challenge because, they let At the time in Washington, the Hill and Roll Call were the two, sort of quote unquote trade publications for the legislative sausage making in, in Washington, D.

C.

And this is at a time when I don't know, a house in Bethesda was like 250, 000, right?

The, the U.

S.

government has grown massive.

Politico and Axios sprung up under their nose and then punched ball subsequently to that.

And they covered, it's a company town.

yeah, there was like a few other companies, but let's be real.

It's, the government has grown massive during that time.

And the post let, literally some of these people were in the building.

They were in the building and they let them, them go.

So I look at it as that was a bit of malpractice.

you look at what the Boston Globe has done with stat, it was a, it was a big bet, right?

I mean, they lost a lot of money for, for three years on, on stat but they were able to say, look, what are our strengths?

We're, we're really strong in, in the Boston area.

and, biotech health is like a major industry here.

So we have, we have the ability to, to play in that.

And this was something that the post just simply didn't do.

I know it was like a couple of years, maybe it was like a year ago.

They Shut their, like, e gaming, vertical, and it's like, why, why are you doing, I'm not into gaming, but I'm like, what is, why does the Washington Post need to do, a e gaming vertical, like, why, why, when you're sitting on, in the middle of Washington, D.

C., they're, they're trying to claw that back in these plans, I think that's, that was a critical mistake, and even, like, Okay.

Honestly, not to like criticize too much, but they had the Alito story and passed on it I mean more malpractice, but that's like a smaller thing, but I do think that they need to Have an identity about here's what we're about right?

And and the thing is they have so many strengths I mean like so many fine watergate is in the rearview mirror quite a bit at this point but they're sitting in the middle of washington when Our economy is increasingly being You Affected, driven, whatever you want to call it, by government decisions.

I mean, we're passing massive, there's T, there's T's behind these bills.

Yeah, exactly

everyone has a stake in Washington and we see that with the growth of these publications that focus on on Washington, D.

C.

As as a business.

Basically, it is a business.

The government is a giant business at the end of the day.

so I think that was a big miss from them.

And I'm interested to see if it's too late because, Will Lewis was was asked about, buying punch bowl.

by, Ben Smith, which I love, I love specificity of the question because it leaves hanging out there, whether Ben had heard something or not.

And so without saying it, so we'll never know.

I don't know if Ben will tell me.

but what Will Lewis said was, newsletters might be like yesterday's news and we're, we're focused on, on something else, but I think what, what we're seeing in this plan and particularly what they're doing with subscriptions, is that they definitely want with this, they're calling it a pro tier, like everyone wants the Politico, everyone wants the Politico model.

hard to pull off though, right?

Yeah, yeah, I definitely think it's hard to pull off, especially when you're coming from the position of a regional newspaper, I think the, the, what's interesting about the post that's different from most regional newspapers is they are more frequently going to have something that's of national or international interest.

Right.

So it's easy for that sort of shiny object and broader audience to become.

distraction.

You see the potential and growing into a really truly nationally relevant, source of information, but it's just that it's not going to be viable for them.

I would agree with you.

They can't compete with the New York Times at this point in that way, and they did take their eyes off the prize when it comes to what makes them truly unique in the fact that their company town, as you say.

So yeah, I would agree.

I think it's going to be a matter of trying to reorient towards the center and the core.

And these new subscription offerings seem to me as though they'll help to do that while also giving them options for the people who are You know, not necessarily in that area, but interested in that company topic, and they can engage at that pro level, the B to B level in such a way that those more nationally oriented, stories are available to them without having to get the local.

It's, it's just a great demonstration of recognizing that, again, people come with different jobs to be done and we're going to build products that help to solve those various jobs to be done instead of assuming that the person who's subscribing from Scranton, Ohio, is there because they want everything that the Washington Post has to offer.

It's not one group.

Yeah, so the, the plan right now is, is one of the things I'll just step back for a minute there.

Will Lewis was a bit critical of subscriptions, in, in earlier comments.

he said that they basically they've peaked.

He came down on the side of peak subscription and said, they're kind of set up for a precipitous decline.

Were you surprised by that?

I mean, I, it's, I mean, it's, it's, it's a view of sound.

I don't hear it like voiced a lot

for obvious reasons.

so I, I mean, I don't believe in the idea of peak subscription as a whole, generally we see very broadly.

So a lot of what we do is outside of the media space as well, and, and subscriptions generally are still a very strong model consumers have a strong preference for them, but also they provide a really great compliment to businesses that may not operate on a recurring revenue model as their primary model.

So it's a good way to expand into other.

areas and serve different kinds of customers in the media space.

Specifically, I think that this perspective of peaks subscription has come around because again, everybody had unrealistic expectations that the COVID growth trends were going to remain.

And, and as we move past the pandemic and growth was no longer as easy as it had been, it became much more of a challenge.

And in fact, there was a bit of retraction happening.

People started to say, Oh no, this is, this is potentially over.

And in truth, It's just coming back to the meme, but the growth is still there and for the Washington Post specifically I think this is just a very acute experience for them because they tried and they made a Significant effort on the national level their audience expanded quite dramatically

because of all of the national news at that time You know what the world was going through and their investments in a great product they absolutely produced a fantastic product that I think attracted audiences from outside of their domain, because it was just a good experience for sure.

Better than, than better than most out there.

So

don't go crazy with the auto plays.

Right, right.

And so, their, their retraction, I think, is a, is a bit more acute because, it's just people recognize that they didn't necessarily have that need for the Washington Post, even though it was an attractive offering at some point in time.

So they've churned out a lot of people, but they're regressing to the mean.

At the same time, the potential for growing subscriptions still remains in my opinion.

And, and I think, again, I think people misinterpreted.

What Lewis was saying about peak subscription, because it's clear now that he doesn't believe that subscriptions are not important or that they're going away.

It's clear that what he understands is that a singular monolithic subscription isn't going to work.

But multiple variations on subscriptions that are more audience oriented, audience centric, have a lot of potential for growth.

Yeah, how do you see it?

So let's talk about that.

Because it seems to me sometimes people and I actually did this, put the cart before the horse and you want to talk about subscriptions, you really need to talk about audience segments before you talk about subscriptions.

Because when subscription started, it was very blunt.

It was like binary yes or no paywall.

Mm

and then meters came around and, and then, dynamic, and then freemium and, but really a lot of these, to me, we're still treating the, the, the audience as a monolith and there's, there's, I don't know.

The way I think about it is, is there is a fine line, right?

You can't slice the onion super thin.

You can't have 50.

Options.

I mean, people just people are busy.

They're not like thinking about you all the time.

make it easy for them to give you money.

there's a reason that like any consulting project is, you know, there's three.

it's just, that's the way it works.

It's like the holy trinity.

I don't know, I don't make it up.

no, you're absolutely right.

Too many choices paralyze the consumer and make it more difficult for them to

But is that proven out?

That's my vibes based analysis.

Do you have actual facts?

yeah, it's 100 percent true for sure.

Yeah.

And, and at the same time, only one option.

Does the same thing, right?

It filters out people to a greater extent than is necessary.

So the trick is for any one of these organizations is to acknowledge that it's not going to be the same rule for everybody, right?

Understanding who your audiences are and their various segments.

And importantly, understanding them in terms of their value, their CLV or their potential CLV is going to be the thing that really helps to determine how many different segments are we truly trying to serve here with different products, because.

You could absolutely create hundreds of different products potentially, but the complexities of doing that and the, the operations of fulfilling upon that exceed the value when you break it down too much, there's a sweet spot in there.

And, and I'm curious, this is going to be.

where, where this strategy for the Washington post proves out, we've seen very little about the details of what they're intending to do, but it sounds to me like they have their two existing digital subscriptions, which is the, the all access and then the premium digital, and then these new ones I think are being positioned as additional, for the B2C audience, right?

So they're, they have on top of that, the plus, then there's the pro and the membership.

So now we're getting to a

level of

just, just to stay there for a second, they have, they have, two basically subscription options.

Let's leave aside print because then you can, then you can bundle and print and print is always, I noticed that they drop it totally to the bottom, which is, is

Yeah.

but you know, the, the, the premium and all access to me, the, They're vague, right?

I mean, you get like extra, the extras for the I always joke about the football phone.

It felt like that, like where, the extra, this is like an e books, e books

from from Washington Post.

Gift articles.

you, if you, if they tested that.

I mean, e books, is e books a big thing to get people?

Into a higher tier

Right.

Yep.

look, if, if people are into it, I will absolutely do an ebook to sell a subscription serial.

but now they're, they're, they're looking at these, these feel more, I guess the other thing I would say about their, existing subscription, Strategy is very heavily dependent on, on the discounting approach, right?

you, you can, I, I, they're, they're not showing to me now, which is interesting because I, I logged in to actually read an article.

but when I was there earlier, there was, they were, they were rolling out, they were still in the Memorial Day sale mode.

and I, They, they built a lot of subscribers off the dollar, offers.

you, you didn't have to scroll very far in Instagram to, to get a dollar offer in my experience.

and then of course they, they entered, not of course, but they entered a, a churn spiral and churn spirals are no, are no, are not.

Are not fun, right?

what is just this dwell on that a little bit?

give me the breakdown of how Publishers should think about the dollar offer and i'm talking like broadly as like using that symbolic is You get people in the funnel You get their data you get their credit card on file and I get it.

It's it's in any situation Meeting with the whiteboard.

It's a great experience.

then, a, weirdly, I got a text last night from, from my wife saying Washington Post just charged me 120.

She couldn't even remember when when she had maybe taken one of those dollar offers in order to read an article.

What is, what is the role of those really low rate intro offers that then balloon?

I mean, to me, they, they feel a little bit too much like, when I was in college, the, the banks who would come in and offer you like a water bottle to take a credit card out.

You know, it's never a good deal,

but

totally agree.

Yeah.

This is this strategy of these low intro offers with the hope that at some point they can, increase the, the lifetime value of those subscribers and retain them.

in my mind is, is indicative of, as we talked about before, the conflicting incentives, but also a lack of goal alignment.

Within an organization and with within the audience space.

So when we when we talk about goal alignment, we really want to talk about.

Sort of product market fit.

How much is your, your business goal aligned with what your, your audience in this case wants to buy.

And when we talk about these low promotional price offers, these are based upon organizational decisions that are.

Really rooted in the idea of building a large set of eyeballs that can be monetized on advertising versus building a product that people want to pay for and that they value continuously ongoing.

And there's a, there's a lack of alignment.

We're seeing this in this sort of transition in the industry right now.

There's a lack of alignment on which of those priorities or how to balance those priorities so that they can.

manifesting good customer experiences.

The idea of the 1 offer will always bring in a higher number of new subscribers, but it will also increase the churn rate and make it more difficult to keep those people around.

And for a very long time across the industry, people have been generally satisfied with this idea that having, slightly less than a 1 percent weekly churn rate, which rolls up to at the end of the year.

And almost half of those subscribers churning out

yeah, well, they're not really subscribers.

well, that's, that's exactly it because they don't really value the product.

Like we, we

experimented with a couple of these, like a digiday.

And I remember like talking to like my boss, like he was like, what are these people churning?

I'm like, because it was like a cheap offer.

these are not, I was like, we have to segregate these out.

These are leads.

They're not like subscribers.

they're, we're, we're just, we're hoping, a bunch of them fall into the bucket.

this is about how many fall into the bucket, not how many didn't.

this is direct marketing where, I remember it was said to me when I covered this, it's not about how many fish fall through the net.

It's just about how many end up on the deck.

that's what it is.

It's just a different game to some, and if you mix that data, you start to get bad signals at the end of the day.

Yeah, that's exactly right.

So, fundamentally, and this is again, going back to that idea of the North star metric.

This is why this is so important because when you deploy a tactic like these promotional introductory offers, you're saying that what we value is volume more than the value of the customer and their experience in our product for them, right?

You have a choice between volume or value when it comes to selling your product.

And promotional office offers clearly indicate that the strategic priority for the organization is still volume.

And I think we're in a phase where we need to be focusing more on value.

We need to be creating and selling the product for a real value that people want to pay for it ongoing again and again and again.

And that, that creates a satisfaction and a stickiness and a retention for them that will pay out over time.

the, the, so the secret value you.

Which isn't such a secret, but that what makes a subscription or recurring revenue business more valuable generally is that the customers pay out over a very, very long period of time versus sort of the e commerce model, which is to say, let's have the lowest possible customer acquisition cost so that we can drive this one transaction.

That sort of mentality has kind of permeated this industry.

the DTCification, right?

All this per all these like performance marketing goons, as I call them, spread out and like, I'm sorry my poor yeah, and look at DTC, right?

these companies, they looked good on paper for a while and start until until they started to realize that they didn't have Customers, they were renting Instagram users, and they were just performance marketing machines and they had to repeat it.

There was no loyalty.

There was, it wasn't like an acquisition.

It was just, I'm going to buy this thing this one time.

And then guess what?

maybe we get them on an email list and then people unsubscribe.

I'm going to have to go back on Instagram and pay.

Instagram loves, It's kind of like a zempic, right?

It's like, of course it isn't a one time thing.

the drug companies are not going to make some cure.

exactly.

That's exactly right.

So you so a business that has the foundation of a recurring revenue business model kind of adapting to tactics that are oriented towards one off transactions and one off acquisitions, it will inherently kind of push you to the next level Gravitate towards the, the, the, the most immediate perceived ROI, the lowest quality customer for the lowest possible price.

And instead, it's just not leveraging the real value that it has and its ability to really build a relationship that over the course of many months and ideally many years pays out exponentially greater.

Thank you very much.

Then that one off transaction, right?

If we can just have a longer term view on the ROI of those efforts, and instead of discounting for the quick acquisition, we price the product at what it really should be priced at create real value in the perception of the, the consumer's mind and get them to buy into something that they're willing We're going to commit to for a long time, yes, we're going to get less of them.

But if you're making five, six, seven, eight, 10 times more money off of them, that should be okay.

And when you value, when you, when you emphasize value over volume, that's when you can really leverage the power of this kind of a relationship.

So I think that, the goals have been misaligned and we're currently in this transition phase.

What we don't know, because of your point about the Washington Post, we don't know what their North Star is.

And we don't know what the pricing of these new subscription products are going to be.

So we don't know where they lie on that, that equation or that percept, prioritization of volume versus value.

But I'm hopeful, I'm hopeful that when they come out with this pricing, they leave this current Memorial Day 25 cent sale behind and they move into something that's a more realistic expectation for the value of the product.

Yeah.

There's this kind of crazy Eddie approach that I don't think is like a long term.

but let's, let's go through the way, because it's clear.

And I think he's, I think, it resonated with me is his critique of, of subscriptions being an all or nothing, proposition.

and again, there's always a balance.

But what he laid out was, that there was going to be a plus tier, that is for, they're looking at a core audience and a non core audience, right?

So their core audience, they get, a plus tier.

and that's, that's typical.

Although I will say this, a lot of times people don't want more.

I think that's a general, Problem of to fallacy, but it's also a problem of the, the human condition as, as we view progress as more, I mean, I, I find it, I know, I know it is better for, the product if, I have fewer words than more.

I'll tell you this, I go up to the word count thing, and if it says 630, versus, but it says 1250, I will feel 1250 that I've done more work, which is, Awful.

but I know it at least anyway, there's a plus tier and then the pro tier is there B2B, it'll be interesting to see where they, they net out on that and look, I get it.

Carl was at at the information.

He knows this, B2B subscriptions are.

Great.

They're on, they're on, usually they're on, Amex cards.

You're, you're disproportionately on Amex cards.

there's a reason that business class, seats are so expensive because it's not people's money.

Yep.

that's getting yanked back a little bit.

but I think they're a little late to be coming in.

They have, they have some really good, policy writers, but they're going to have to really find a lane, in order to.

Not cover policy from, the, why is this interesting in a news perspective?

You got to help people make money at the end of the day.

You have to give them, a, an advantage in the marketplace really for these to work.

Mm hmm.

Yeah.

there's a couple of different ways to look at this, this tiering of subscriptions

add that the membership is the next one, which is like the kind of like soft and fuzzy.

although I have a membership, which whatever, you get extra, you get, you get access and things.

It's really for, for core audiences.

Yeah.

I, so again, I'm, I'm really curious to see exactly how all of these existing.

all access and the, the premium digital as exists right now, layout next to what they're presenting as these new tiers, is there going to be any consolidation involved in that?

we, we don't know, and we don't know how they're going to relate to each other, but from a pricing perspective, but I think one of the first ways to look at this from an audience centric point of view is to consider that this pricing psychology that we were just talking about.

Right?

So to your point, sometimes people don't want more.

And by giving them an option that offers more and is more expensive, you're playing on the psychology that the lower level offer is a good deal.

And so just simply by having more options, you have the ability to sell a higher volume of something that appears to be a better deal.

And that could be really smart.

And that doesn't even get into the details of what exactly this more, consists of.

But that's a, that's an important tactic to consider when you are presenting.

And then you said it earlier, there's a reason why all consulting proposals are consist of three options, right?

That largest level option is there and it's designed to make the middle option look really good and attractive and justifiable.

So there's that part of it, but then there's, there's also what are the products going to consist of and how do they create true differentiation of these premium products.

In a marketplace that to your point has been saturated in their, their goods have been stolen by the, by the likes of punch bowl and Politico and Axios and others, right?

How are they going to compete with this sort of premium level product in a marketplace that already has established what that means for this exact content that they should own?

Yeah.

when you look at their, both the, the pro product and then the membership product and in membership product, I always say, if you want to know what people are going to do in an organization, just look at the last place because outside of.

A few people, Elon Musk, like most people have one playbook.

It's like Bill Belichick made a game plan unique to each team.

No, not every other coach does not do that.

They've got one thing.

if someone like scores a lot of points, they're just going to score a lot of points.

So that's, that's what they do.

and so I, I look at what the, the journal, right.

And the, Dow Jones.

It's interesting what, what, what Emma Tugger is, is, is undertaking there.

And, and my read is the Wall Street Journal in reality is a hero brand for a B2B data business.

when you look at where the money is coming and where the investments are being placed by Dow Jones, it is in like energy pricing services.

It is not trying to like roll, expand and take on the New York times.

It is not.

And when you look at at at the journal, obviously they've got a strong subscription offering again.

O.

P.

M.

Other people's money oftentimes.

and they want to really zero in on that and leave aside a lot of the extraneous coverage areas, by the way, And I think that's causing a lot of consternation and obviously turmoil.

And unfortunately, some people are losing their jobs.

but then also.

I don't think a lot of people know like about the journals councils business, you know, having the CMO council, the, you know, I'll be in can in a few weeks.

And, there's a, wall street journal house that they pop up at all these events.

And, that's for like B2B audiences.

It's, it's a B2B business at the end of the day, harder to pull off when your roots are.

A general news brand at the end of the day.

I mean, it's very tied into, I feel in the marketplace, into its legacy covering Washington and politics really.

I don't really think of the post as a business publication.

Now, maybe they, they try to horn in on, on that, nexus because, you know, it is strong between business and, and Washington and, and, and the people who make policy and regulations.

Yeah, my read on it is that it's a huge opportunity for them.

As you highlighted earlier, the government is a huge business.

it doesn't work in the typical, it doesn't, it's not fundamentally based on the typical capitalist businesses that the wall street journal covers, but it feeds a whole lot of people in that area.

And there is a whole lot of sort of inside baseball to be covered when it comes to the way Washington works and the effect that it has on people's lives and to businesses, their ability to kind of get in on the game.

So I, I actually do think that there is a huge opportunity for them to have a really interesting B2B offering that could be super vast and, and specific to your, to your point, B2B provides, we think about the jobs to be done framework.

It's a literal translation in the, in the B2B environment.

People have very specific jobs to be done, ways in which the post or the journal or whomever else can fulfill upon those needs.

So the segmentation opportunity within B2B is even greater than it is in the B2C side of

and I think the advantage of this is the playbooks are known, right?

It's not you're not inventing something new.

it's, it's all execution at the end of the day, but particularly in the Washington, arena.

you see, I mean, like Semaphore has a, from everything I see, like a fairly thriving Washington, D.

C.

policy influencing, business line.

it's, it's probably the biggest one, Part of the business, and, there's a lot of people feeding at this trough.

It's, it's, but it's fairly standard, you put together like closed door events and you get the regulators and government officials and the people who want to influence them.

And you, you do that congregation.

It's not the sexiest, Journalism, capital J, business, but, this is, this is what the business is at the end of the day.

This is the economic utility of that kind of business and people, top executives will pay a lot of money.

if, and I think the, the Washington Post, I might go back to what I said, the Washington, I think the Washington Post probably does have, license to, to enter that, that arena.

We'll see.

It's very crowded.

That's exactly it.

The question is, when you get down to that niche level of experience for folks, will they be able to compete with the ones that are already there?

Right.

I think, I think to your point, you could call it malpractice that they missed the opportunity and allowed these new entrants to take that space.

And it's a big question mark as to whether or not they could actually come and claw it back.

Yeah.

And then the other thing that's part of this plan is, is basically for the casuals, 80 percent of, their audience are casuals at the end of the day, I would define that, if you're not, if you're not consuming like one page, you've got a lot of one and dones and, you have people who, who will come in and bounce when they hit a paywall, and, I think it's a particular problem, probably, with younger, audiences, I think a lot of these subscription programs are, they age up.

I mean, it's, it's, the journal, they literally, their churn is, is sometimes it's, it's, it's the end of the line for their subscribers because it's, it's a pretty older subscriber base.

but, I think what, what he's talking about are, and that's the, probably maybe the most interesting part is how do you bring value out of these casuals?

It used to always be, we're going to make, we're going to do it on ads.

or we're going to put some dollar offer in front of people and then we're going to hope that we're just going to stay quiet and cross our fingers and hope that we can whack their credit card.

and make them call, to, to complain and, and just between nine and 5 p.

m.

And, and we'll just go, go from that, but he's talking about, pay as you go, almost the, the micro transactions, I hate to say.

but it is interesting.

I, I, I, I'm interested.

What do you think it is?

I always feel like.

There's this conundrum where it totally makes sense to have an option.

And just as from a consumer perspective, a lot of times we land on a, I'll take vulture or something.

I'll land on one of their articles and I want to read it and stuff, but I'm like, I don't know, vulture?

I, maybe it's just, just cause it's not in my, sort of world.

I mean, taking out a full annual subscription just because I want to read an article.

Mm hmm.

but this never works.

And first of all, explain to me why it never works, the like paper article microtransaction model.

And.

Is this the time that maybe it can work?

Yeah, I so, good, good point about it never works.

I actually don't I'm not aware of a lot of evidence that the fact that it doesn't actually work.

I think outside of media, we have a lot of evidence that it does, in fact, work

Okay.

It never works in media.

hmm.

I'd love to see specific examples.

My, my hypothesis

are all the microtransactions?

Why can I not pay per article?

Yeah, that's a great question.

I feel like that's a, that's a matter of, corporate indecision and a lack of, guts to try something.

But there is an element of technology that makes it challenging and the costs associated with these technologies that, on a very basic level, kind of make each individual transaction seem not very valuable.

but the truth is, at scale, these are potentially really valuable as a, as a, another option for, To engage another portion of an audience that you would otherwise not engage.

super excited about this, and I'm hopeful that it really kicks off a trend in the industry to begin to provide these options.

I think the biggest hindrance, quite honestly, is that the functional interaction of a microtransaction can be a challenge itself.

And for an individual, Media publisher to solve that problem specifically for themselves or for everyone to solve it specifically for themselves creates a really challenging user experience as you consume content across a lot of different places.

So in, in, in the case of other platforms like video gaming, it's centralized, right?

Or in the case of like audible, your ability to purchase individual tiny transactions is based upon that one universe operating in the same user experience.

but that's the answer, right?

that's what I always say.

It's meet the new, like I wrote the, this week, I put most of it behind a membership, the membership wall.

but I wrote this week as a little preview for those of you who are not subscribers, hint, about this.

It's, it's, we can talk all about being independent and giving the finger to open AI and all these people like, it's The reality is it's just, it's just not possible for, for most publications and don't bring up the information or some niche little publication.

it is not a reality for most publishers.

And when you talk about something like this, the reality is it's going to have to be centralized and you're going to have to rely on a, a, a technology company, Google, or Apple with Apple pay and being able to just a couple clicks, the idea that someone's going to set up an account to pay you like a few dollars is, is don't, don't even consider it.

That would be

That's, that's exactly it.

I think it's, you're spot on.

you have to leverage the, the realities of this relationship that you're looking to establish and the value of it and bring in existing out of the box technologies to help you solve that user experience problem.

And, and it can, I think it can succeed.

I also think that the post is in a really interesting position with arc.

Because potentially it has the opportunity to create a micropayments platform across

you know, that wasn't mentioned and that wasn't mentioned in there.

I think they're going to sell off ARC.

That's my, I have no, I have no, I have no insight knowledge.

Um, but, don't cool.

I don't think it is, is.

it's not core to the direction that I read here, but maybe I'm, I'm missing that piece.

That to me was a function of the, the days right after Bezos, bought the posts and they, they talked about, it being a technology company.

I, I remember they were like building different pieces of technology.

And this was at a time when a lot of publishers were thinking that, that they could pretend to be tech companies.

or try to be, and that was the whole idea behind the voxes and, coming out with, their CMS is that they would license and chorus and look, it's I think that ship has mostly passed.

I think ARC is a, is a, is a great product.

I don't necessarily know that.

who knows?

I mean, Jeff Bezos, he's got, he's got a fair bit of money, but we'll see if they, if they keep that around.

or if it makes more sense as an independent entity or part of a different company.

Right.

Yeah.

It's an interesting tactic.

And I, again, going back to that, that interface conversation we were having earlier, I don't know a lot about ARC technically, but My understanding is that the user experience is still based in sort of the traditional news consumption experience.

And it's a missed opportunity, right?

While that was being built, and while that was being deployed, so too was Instagram and TikTok and all these other different kinds of innovation, interfaces that are proved to be more innovative and more engaging and more able to capture and retain audiences.

Yeah.

And I mean, look, and also the reality is like in the marketplace, when you're out competing, it's hard enough and to have a, a real or perceived hindrance of being owned by a quote unquote competitor.

It's just obviously it's going to be used against you in the marketplace, but, and we're like, why do you want to do business with your competitor and all this?

You can talk about all the firewalls and, but I don't see the necessarily the upside translating in the marketplace, but it could just.

Based on, not on ARC specifically, but just on all the other people who had all the other publishers who came out with similar, products.

I give, I give them a lot of credit cause they, they poured a lot of money into ARC.

and from what I hear, good product.

okay.

So, and I think the other thing, the last thing is, I think it's interesting there.

Look, there is a little bit of spaghetti against the wall.

I feel like in this because, and, and it's always the case for these grand plans.

They almost, they remind me of like state of the union addresses

that are not done by Trump.

because there's always like a laundry list.

I'm sure the president wants to do, famous state of the union stuff, but then Every single cabinet secretary gets like, no, but you got to mention this and you got to mention this thing we're doing, and they're just like, Oh my God.

and so they ended up just becoming a laundry list of things.

But one of the things that, that stood out, because I think every publisher is trying to figure this out is they talked about like elevating, individuals and, quote unquote talent, which is a reality.

I mean, again, I go back to Ezra Klein was in the building.

They did not, he wanted to start Vox at the Washington Post, and they were like, you're a journalist.

And again, malpractice, unforced error, and I think that they're trying to allow people to, I thought this was really interesting, being able to subscribe to an individual author, for instance,

I think that's a pretty interesting approach.

Yeah, this this is a trend.

I would say that we're seeing through the likes of puck and what's happening at Axios, putting journalists forward for their own specific appeal to an audience, and I think it's fantastic, quite honestly, in this current age where there's so much discussion around how much work the robots are going to do.

It's really great to see investment in.

In people in the human interactions, and there's talk of this concept of journalists playing the role of a convener in their communities.

This is a fantastic direction, I think, for for things to go in terms of just providing an experience that the robots can't provide and creating a unique proposition that truly is going to be more and more valuable as the, the content Tsunami, I think is how you refer to it as that continues

to

that was Peter Coffey.

That was a crap tsunami, actually.

Crime tsunami.

But, people are, uniquely valuable and they're enduring in a certain way.

And the, the idea that, you know, having a relationship with to some degree with the journalists connects you to the story over time in a more emotive way.

There's all there's a ton of value in all of that.

All of that does literally translate to the dollars that people are willing to spend on this sort of thing.

And it gives you more of an opportunity to truly get into the community and to give people the exposure to journalists.

And one of the things I love, I was, scanning across various newspapers, home pages today, looking at how they're covering the Trump story.

And the New York times of course, stands out because they have, on the homepage, of course, lots of stories, the typical text in photo, but they also have, a reporter kind of talking head reporting from in front of the court or

Yeah.

They're doing like TikTok videos with these, the reporters, which is

Yep.

That's exactly it.

And then just a little bit down below the fold, they have another one going on where somebody is doing a review of open AI chat, GPT 4.

0.

and so they're bringing these, these personalities to present their information in a more human way.

And it's just so much more engaging and it's completely different from what you see everywhere else.

and it's another demonstration of the fact that they're definitely at the bleeding edge of engagement and getting people to connect with their content in a new way that they clearly have been able to monetize more effectively.

If I was in my old job, I would definitely have already assigned a story on the, the New York Times, like TikTok video kind of strategy.

It would do great.

It would be the most read story of the week.

So just the

Yeah.

to my friends.

Top of the trending

cool.

let's leave it there.

Thank you for doing this.

I'm hoping we should do, ones on, on others.

be fun.

Absolutely.

Thank you, Ryan.

Thank you, Matt.

Appreciate it.