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Aug. 8, 2016, 11:44 a.m.
Business Models

Newsonomics: Sketching in the details of Josh Topolsky’s new Outline

“Being outside looking in, to me, is quite important. I think that, for the audience and also for a lot of the people involved in this, it’s a lifelong feeling of trying to make sense of a world that you’re not necessarily inside of or a part of.”

Don’t call Josh Topolsky’s just-announced The Outline “a New Yorker for millennials.” Or do. The 38-year-old digital media veteran of Engadget, The Verge, and Bloomberg can see it, and explain it, both ways.

I asked the CEO and editor-in-chief of the just-announced site, launching in the fall, what he thought about that shorthand description.

“I get it. It’s not the worst description I’ve ever heard…The New Yorker for millennials in some ways makes sense, and in a million ways doesn’t,” he told me. Topolsky is a rookie CEO and he rejects marketing shorthand in favor of deep and wide editorial explanation. He believes his joint title provides competitive advantage: “There is no other business that I can think of right now, and feel free to correct me, where the editor-in-chief is the CEO. If you can find another new media business where that’s the case, that actually has the ambition that we have, I’d be delighted to hear about it and see it and talk to that person. There aren’t that many. If there are, they’re not executing. I think it needs to be different now. That’s what we’re trying to build.”

I tried another shorthand, but found that Topolsky doesn’t like to use the word “millennials” in describing his intended audience — though it targets 20- to 40-year-olds. (Millennials clock in officially as 18-34.)

“I don’t really care for the term ‘millennials’ because I don’t think it’s meaningful,” he said. “I think it’s a bunch of people who were born in a certain time period. But it’s the audience that I’m a part of, and it’s the audience that I know, and it’s the audience that I’m interested in. It’s the audience that is now changing the world and will change the world in the future. I’m very interested in what are the publications of record for this generation that are smart, that speak to them with intelligence, that respect there appetite for changing and living in a big new world.

“If you were making a New Yorker — and I’m not saying we’re making something like The New Yorker, but if you were going to make a New Yorker today — what would that be? What would that look like? Who would you be trying to reach? I love The New Yorker by the way, but it isn’t built for this generation. It isn’t telling a story to this generation.”

The Outline flies in the face of this moment’s conventional wisdom in the digital media business. It’s too late to start a new digital news brand, many say — the market’s oversaturated with Vices, Voxes, BuzzFeeds, Mics, and Quartzes. Google and Facebook have made the digital advertising game even tougher, data proves. Branded, destination media may be replaced by “platform reading,” though that fear seems overstated. A sooner-rather-than-later recession will kill the small players, say the soothsayers. And finally, another would-be truism: Building a significant, profitable brand is just a lot tougher than it was five years ago.

Topolsky laughs at all those stop signs. “It is very common for people in our industry to say, ‘Well, who needs another X.’ or ‘This is the wrong time because of Y.’ The reality is there’s never the perfect time to make something new, and it’s always the perfect time to make something new. If we think that the last great media brand, the last great media business has been built, if we are convinced that that is the case and that everything is going to be a part of Disney, then I guess this is my Hail Mary. But I don’t believe that.”

Topolsky and his partner-in-startup, chief revenue officer Amanda Hale, have some things going for them. RRE Ventures — a venture firm backing BuzzFeed, Business Insider, and TheSkimm — has taken the lead in The Outline’s $5 million funding; it is RRE’s 17th venture investment this year, out of 375 in total. As the company preps for launch (aiming to be up by November), I talked to the duo last week about their plans, the peculiar American digital media landscape into which they’ll launch, and about playing with Facebook, new native ad formats and The Outline’s outsider intention.

While Topolsky eschews labels of all kinds, he says The Outline will focus on a certain kind of reader. “They live in urban areas. They’re really tech-savvy. They fund Kickstarter projects. They eat farm-to-table food. They care about politics, they’re engaged…The data is really starting to show that there are a lot of people who self-identify as smarter and savvier and less susceptible to bullshit, and are hungry for a story every day, or multiple stories every day, that talk about their world. The world that is important and valuable to them, in a way that serves their intelligence and doesn’t talk down to them. It’s not condescending. It doesn’t dumb things down. It isn’t trying to play for every possible person who might read a story.”

There’s a lot to like in that description. It’s high-minded, though it also self-defines as a blue-state special, a publication that might at times have a tough time crossing the Hudson.

On the product itself, and the kinds of tech that will drive it, Topolsky is cagey. Instead, he emphasizes storytelling and points the curious to his recent Medium piece, “Your Media Business Will Not Be Saved.”

“What I’ll say, what I think brings us back to sanity about what we can do, what journalism can do in the world: We can actually take the control and destiny, our destiny back in some significant ways, and prove it’s worth having in our hands. I want to figure out what that is. That’s what we’re trying to do.”

Topolsky says his initial staff, now being hired, will be between 20 and 30. That means a good amount of content origination in both reporting and commentary, proportion TBA. Like the most significant digital news startups of the last half-decade, it will put its most of its early funding into content and product. (While startups often budget 60 to 70 percent for content creation — to build a big audience fast, mimicking early Silicon Valley conventional wisdom — legacy companies usually devote less than 20 percent of their budgets to product and content origination.) Given its target age group, The Outline will be mobile-focused, of course. It will be browser-accessible, given Topolsky’s antipathy for closed tech like native apps.

I asked him what he liked in digital news storytelling in 2016. “Very little. That’s actually part of my frustration…The open web and digital gives us an incredible palette to paint with in terms of how you can tell a story, and I’m very interested in the how, not just the what but the how. We paint with very few of those colors.”

Topolsky is direct in his criticism of digital news media that write to the traffic, deciding their journalistic output by what Facebook wants. “I see every day, as does the audience that is increasingly numb to this stuff, things are made not for them, but to solve some exchange — some algorithmic and business exchange. I think there is a long tail that we are just starting to come up, and you’re going to see it from Facebook business stance and you’re going to see it from the stance of the audience.”

I suggested that The Outline will launch into what currently appears likely to be the post-Trump era in American life. “I think that Trump is actually this incredible avatar for a lot of what I’ve been thinking about when I think about how power and the future have converged, how popular culture and power are now meeting in really interesting ways,” says Topolsky, whose last gig as top digital editor at Bloomberg Media ended a year ago, as he tangled with the guy whose name is on building. “I do think there’s going to be some deep introspection and thinking about what are we making, what world are we making now, and how will we make it?”

That’s a strong “we,” and that’s how we return to millennials.

“I think about this generation raised on the iPhone, where it’s not a novelty. It’s been around for eight, nine years now…It’s not so much about ‘this is the cool gadget I have in hand.’ It’s like: What is the world going to be made through this thing and with these things? And what is the world that we see through them and with them? So on the future side of it, that’s the part that I think is really interesting — of interest to me even when we started The Verge.”

The Verge — which Vox Media funded and Topolsky cofounded, when he broke away from AOL’s Engadget in 2011 — won much acclaim for its innovations. If a tech-driven future serves as one focus of The Outline, it’s that future’s connection to power and culture that most intrigues him. What does power look like going forward?

“What is the next iteration of our world? And so I think Trump is the great example…I think there are big societal, cultural, social changes that are happening and there are major things happening in business, in industry, and certainly in politics that are impacted by the way we communicate, the things we use to communicate. How many scandals, how many leaders have been brought down? How many major news events have occurred in the past five years that are a direct result of how we live with technology?”

These are weighty topics, ones we see explored in places as diverse as The Atlantic and Quartz, Slate and The New York Times, and by Medium contributors, among many others. Topolsky’s belief is that The Outline can provide thought leadership, and do so in a way that will bring in millions of regular readers.

How many millions? As The Outline debuted itself with piece in The Wall Street Journal, Topolsky noted the number of 10 to 15 million monthly unique visitors as a goal. Then, he modulated that number some, as he talked to Recode’s Noah Kulwin last week. Indeed, that number does seem a way’s off; Quartz — often seen as a model digital news startup — just announced it had reached 20 million unique visitors this month, four years after its founding, and it launched as the mobile web was in early expansion. Whatever that top-line audience number, it will be the engagement of those uniques that will determine The Outline’s success. He must prove to readers that they should make time for his new brand.

“Culture” — added to power and future — drives the site’s thinking, as its third narrative. “Most consumers of things aren’t sitting around going, ‘What narrow vertical does this fall into?’ They’re saying, ‘Is this a great story? Is the story told well? Do I trust the voice?'” That means competing for premium audiences who can be sold premium advertising, a general-interest variant of Quartz’s concentration on “influentials.”

Quartz has built its success in part by being a “business” publisher. How will The Outline try to distinguish itself, sans labels?

“Josh and I were talking about this the other day,” Hale said. “You have smart publications — smart opinion-leader publications like the Times, The New Yorker, The Atlantic. You have youth-oriented publications like BuzzFeed, Vice, Vox. But the smart things aren’t really cool. The cool things aren’t really smart. I think that we’re going to set the market niche that there’s a lot of demand for: stylish and smart, style plus substance. I don’t think anything really exists and I think that’s going to really help us break through.”

If Topolsky can sound more like an editor than a CEO, he’s made a good decision in picking a business partner. In landing Hale, The Outline imports a digital ad leader with both a proven track record in innovation and someone who knows how to make the most out of a less-than-giant brand. Hale is a go-getter, whose work at Talking Points Memo I wrote about two years ago here at the Lab. If The Outline does succeed in bringing in a definable, niche audience, Hale has experience in how to monetize it. As an early convert to branded content, Hale has emphasizes the kind relationship-building consultative selling that is now sweeping the news media business.

Hale will soon be out looking for a couple of launch sponsors, as she puts her sales team together. Then, as the audience is built, she’ll focus on a kind of branded content she believes will fetch good premium rates, even for a site with relatively smallish traffic.

One key word: “micro-native.” Does that mean we’ll see branded content at smartphone sizes? No, micro-native means native advertising and branded content that’s less resource-intensive than the kinds of campaigns that companies like the New York Times Times’ studio has won attention for. “An article, it might be native because you’re surfacing it via a story post, but how do we really slot content into the content consumption process?” Hale asks. “What’s that area between a native article, a narrative native article, and a banner ad? I think that there’s a lot of unexplored territory in that middle. We’ll be servicing lighter-touch, more turnkey native with an mid-sized in-house account management team.”

For very large projects, The Outline will partner with the full-service creative shop Code & Theory. “That partnership will allow us to turn out the very big projects in a way a no startup’s early stage creative studio could.” (Code & Theory, which designed the new Bloomberg.com when Topolsky was there, will also design The Outline’s products.)

If branded content is to win more dollars, the business execution will have to get easier. If campaigns demand too much costly weightlifting, they’ll likely only be used by the largest of advertisers.

This is a startup that will be dependent on advertising. Events, niche subscription products, and other ways to make money can be found in the far slides of the business plan, but for now, it’s making this next gen of native work.

Hale rejects the idea that the ad space is too competitive: “I think it’s absolutely the opposite. It’s competitive if you’re selling a commodity — and I have this very, very strong feeling that everyone is selling the same thing. If everyone is selling the same commodity, well, there’s no competitive differentiation, and so it’s going to be very competitive.”

She says “everyone is selling the same oversized banners — at best, everyone is selling the same, 1,500-word, highly produced, advertising knock-offs. No one is really, truly starting from scratch, thinking about what advertisers are actually trying to do, proactively and creatively solving the problems, constantly iterating products, constantly bringing new things into the market, listening to their advertisers and solving that way.”

Hale argues that a brand with a strong relationship with its audience can break through that commoditization. “I realized that at TPM, and I think that there are a lot of similarities between what we’re building there and the kind of audience we had at TPM.”

Despite any protestation, the market will likely first characterize The Outline as a player in that crowded millennials market. Mic, the five-year-old startup, has tried to define and seize that market, though it’s transforming its own strategy. It has an audience of almost 10 million monthly millennial unique visitors, according to comScore’s June U.S. multiplatform study. (Millennials make up 60 percent of Mic’s total readership.) BuzzFeed, Vice, Vox.com, Mail Online, and The Guardian all also overindex millennials, and they all have massive audiences and advanced sales operations.

But Topolsky embraces the idea of being an outsider, down to his site’s name. He didn’t turn to a branding agency. “It just came to me. The first [reason] is that I think it sounds cool. The second is that when you think of an outline in the realm of illustration, the outline is the defining strokes of an image. They are the thing that, whether you embellish or not, whether you color in or not, the outline defines very clearly what that thing is. I think that’s really an interesting way to think about some of what we’re trying to do, and when we tell our stories.

“The word ‘out’ and the concept of being outside of things, to me, is very important. Being outside looking in, to me, is quite important. I think that, for the audience and also for a lot of the people involved in this, it’s a lifelong feeling of trying to make sense of a world that you’re not necessarily inside of or a part of. It’s kind of fundamental.”

POSTED     Aug. 8, 2016, 11:44 a.m.
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