ROBERT SMITH, HOST:
We have been hearing for a long time that the media is in trouble. And I'm sure you've heard this - right? - reporters, journalists losing their jobs, foreign bureaus closing, local papers going out of business.
ZOE CHACE, HOST:
It's clear we need a new business model for media, but it's been unclear what that model will be.
SMITH: But recently, we got a sign, a little bit of insight into how things might look in the future, and this sign has a name.
CHACE: Andrew Sullivan, a political blogger - up until now, he who himself would admit he is an unlikely expert.
ANDREW SULLIVAN: I'm not a businessman. I'm a journalist. I don't want to be a businessman. I want to be a journalist.
CHACE: He's one of the most famous journalists around, actually. Andrew Sullivan has been writing his blog "The Dish" since the year 2000. And for most of his career, he didn't have to think too hard about money. Big journalism companies paid for his work. He was editor at the New Republic. The blog lived at The Atlantic, at The Daily Beast/Newsweek. But he couldn't help but notice over the last few years, like a lot of journalists have noticed, that many of the places that paid for his work - they were struggling a lot.
SMITH: Yeah, and Sullivan started to think, if these big media companies can't figure out how to make money, maybe I can all by myself. After all, he could see he had something that people wanted.
SULLIVAN: When we looked at our data, we saw that we had readers that spend an average of 17 minutes a day on the site. We know that they are - you know, that 80 percent check twice a day. 70 percent of them have bookmarked it. We were like, this is the strength of the site - the readers. So why don't we go to them first? Asking the customers to pay something for something you give them - this radical concept of actually providing a good for money.
CHACE: You're not allowed to do that on the Internet.
SULLIVAN: (Laughter) I know.
CHACE: And so a little over a month ago, Sullivan took a big step. Rather than find another big company to pay for his site, he decided to put himself in the hands of his readers. He would ask the readers for money. It worked for The New York Times and The Wall Street Journal, but would it work for just a lone blogger?
SULLIVAN: Yes, it is one of these awful moments when you're standing in front of a curtain, and it's going to rise, and you have no idea if there's going to be anybody in the audience at all (laughter). Well, it's just a brutalizing process to say, OK, will you pay for us, please?
(SOUNDBITE OF RILO KILEY SONG, "PORTIONS FOR FOXES")
SMITH: Hello, and welcome to PLANET MONEY, I'm Robert Smith.
CHACE: And I'm Zoe Chace. Today - what Andrew Sullivan's experiment tells us about the future. Will this work for him? Might it work for the rest of media? How might it change what we read on the Internet?
(SOUNDBITE OF RILO KILEY SONG, "PORTIONS FOR FOXES")
SMITH: Five years ago, this experiment that Andrew Sullivan is trying now - it would've been insane. Five years ago, most stuff was absolutely free on the Internet. In fact, when The New York Times tried to charge for access to its columnists, it didn't work. They had to give up on it. Now, to have a little blogger - even a really popular, experienced blogger - charge readers for content, that would've seemed really arrogant.
CHACE: But everything is different today. We know things that we didn't five years ago. The advertising model is changing. There's a ton of competition for ad space and dozens of ways to present ads. It's gotten really complicated and cutthroat.
SMITH: And at the end of the day, advertising can't support everything a website wants to do. So when you look at the numbers and the amount of advertising coming in doesn't pay for the content, you really have two choices in today's world. You can get even more viewers, more traffic - volume, volume, volume, as the old guy used to say. That's what the Huffington Post has tried - Gawker, TMZ. And how do you get volume? Two words - celebrities and side boobs.
CHACE: Or option two - get more money out of every viewer, more than advertising can supply. Go the subscription route. And this works well for big, essential media - The Wall Street Journal, The New York Times. The Times now gets more revenue from its subscription than it does from its advertising.
SMITH: So the two routes to success once again - go big or go exclusive. But this leaves out a lot of journalists - a lot of journalists who are doing serious, important work. They don't get the big numbers that a TMZ or Huffington Post gets, but they're not big enough, they're not powerful enough to put up a paywall that everyone will automatically pay for. And this is the content that - to be frank, this is what I worry about because these are those great, meaty, smart articles you read from somebody, and you pass it on to your friends and say, you have to read this. But at the end of the day, who pays for those?
CHACE: And that's exactly what Andrew Sullivan is asking. By the time I visited him, it was a week into his new subscription scheme. And he took me into the headquarters of this new media empire that he was building.
I love animals.
It is a closet in the back of his apartment. It is big enough for an armchair. He faces a brick wall. His dogs are running around.
(SOUNDBITE OF DOG BARKING)
SULLIVAN: That's Eddy and Dusty. Shush.
(SOUNDBITE OF DOG BARKING)
CHACE: And the way he set it up, a subscription costs 19.99 or above. At the last minute, he decided to just leave the box open, give you an option to pay more if you want. So he opens up his laptop on his lap and shows me how it's going.
SULLIVAN: 30, 25, 100, 23, 20, 25 - you can see it varies.
CHACE: This is all in the last...
SULLIVAN: Oh, this is all just this afternoon right now.
CHACE: It is actually kind of amazing because at the time that we had this conversation, all this stuff was still available for free. And one week into his little experiment, he had raised a pretty staggering sum of money.
SMITH: Almost half a million dollars - that is just incredible, Zoe, when you told me about this. But then I started to think about it, and I have to remember, I think about this as a journalist. Like, somebody should give me half a million dollars.
CHACE: (Laughter) Oh, really?
SMITH: But remember, like, Andrew Sullivan is no longer a journalist. He is a businessman. And he has to run an entire news site, not just for a few months, but over the long term, year after year. And in fact, the half a million dollars, from what you're telling me - that does not cover his budget.
CHACE: Yeah. I mean, he's not done. He's got a staff of eight, including himself. He wants to pay them health insurance. The goal that he's set up with his staff is to get to a million dollars for the year - this year. Of course, he'll have to do the same next year and the year after that.
SMITH: And then there's another challenge for Andrew. He keeps bragging about how much money he's making off of the subscription model, and I have to think, every blogger listening to this now is like, bring me some of that money. They're going to want to jump on the gravy train. And there is a question about, how many bloggers can this approach support?
CHACE: Well, next up, we find another sort of less-famous journalist than Andrew Sullivan, for sure. And she is trying to figure that out too. Her name is Maura Johnston. She used to be music editor with the Village Voice. And you might have thought the Village Voice, alternative weekly newspaper...
SMITH: They're all cool. They hang out on beanbag chairs.
CHACE: Yeah, lots of freedom - not anymore. Maura says she would get called into her editor's office every week and told exactly how she was failing.
MAURA JOHNSTON: The motto for my - you know, for my evaluation was just, get more traffic, get more traffic, get more traffic.
CHACE: And so they would show you the traffic numbers.
JOHNSTON: Every week, yeah.
CHACE: And the way to deal with this kind of pressure, upping your traffic, is to create stuff that gets a lot of page views, like very simple, easy-to-digest lists, lists with celebrities in them. Maura was feeling the pressure to change her ideas, change the stuff she wrote about.
JOHNSTON: Music is a really tough topic to conquer in the page-view metric world. You might want to do, like, a bunch features on new bands, but then you'll have to, you know, pay the bills, so to speak, by doing some sort of omnibus list that might enrage people and get, you know, a ton of traffic. How many, like, you know, 10-best-love-songs lists are you going to do on Valentine's Day, right?
CHACE: She got fired from the Voice - not enough traffic. And she'd also been fired from her previous job as editor of this great site Idolator - it used to be part of the Gawker Media empire - for the same reason. People were not clicking on enough of her posts. The eyeballs weren't there, and the eyeballs pay the bills.
SMITH: So I imagine Maura at this crossroads at this point, the one we were talking about before. Do you change your style? Do you go for the numbers or do you do what you want and figure out a way to make it pay for itself?
CHACE: So Maura is pulling an Andrew Sullivan. She is going the independent route, as well. She's starting Maura Magazine.
JOHNSTON: It's 99 cents an issue, 2.99 a month and 29.99 a year.
CHACE: She calls it a magazine. It's actually an app. You downloaded it on your smartphone or tablet. And it has articles, like interviews, long-form features about popular music. And as you may have gathered by now, I am a fan of Maura Johnston, and I subscribed.
SMITH: And I have to say, you showed it to me, and it doesn't cover the kind of topics that lend themselves to click-bait headlines, as they say.
JOHNSTON: A look at how The Smiths breaking up when they did probably torpedoed their chances for being rock stars because of their inclusion on the "Pretty In Pink" soundtrack - you know, stuff like that. Like, it's just, you know, people looking at culture in a way that goes beyond best and worst or, you know, like, this sucks, this rules.
CHACE: You might not know who The Smiths are, never seen "Pretty In Pink." It's pretty niche. It's for a very specific audience. But she also has a business plan like Andrew Sullivan. She also has a pretty ambitious target. The dream, the number that would make Maura ecstatic, is 5,000 subscribers.
SMITH: Wow, 5,000 subscribers - that's kind of amazing. That does not seem like that many people, you know, in the context of the Internet and the vast, you know, media world. Like, 5,000 subscribers could mean what for her?
CHACE: Well, when I went and talked to Maura, she was at her publisher's office, 29th Street Publishing in Manhattan. And David Jacobs was there. He made the app for Maura, and he's made other apps like it. And he says 5,000 subscribers - that works out to $100,000 a year for Maura Johnston. That's definitely enough so she can get her own apartment and not have to have a roommate, which is decent.
DAVID JACOBS: If Maura has 5,000 subscribers and she has - from those 5,000 subscribers, she's making $100,000 a year, that's success. Like, unequivocally - like, she will be making more than she made at any other job before, and she'll be doing exactly what she wants to do. That's definitely success, right?
CHACE: She'll use some of that to pay writers and editors, but it definitely gives her a lot more room to maneuver than weekly traffic numbers. So she's one month into Maura Magazine - seven issues. And she's got hundreds of subscribers. She hasn't broken 1,000 yet, but she's hopeful.
SMITH: So in that sense, I guess Maura is still at the same point that Andrew Sullivan is, although a little bit smaller numbers. She has this rush of initial subscribers, but still far from the actual goal.
CHACE: Right. So let's go back to Andrew Sullivan. When we last checked in with him, he'd cleared about half a million dollars in these voluntary subscriptions. And then Andrew implemented phase two. He started metering his site. So what that means is that you can still browse most of it for free, see the headlines, see sort of the first paragraph, but if you click that read-on button more than seven times in a month, the site will automatically ask you to subscribe in order to continue viewing the content. So I went again to visit him last week to see how this part of the plan was coming.
SULLIVAN: Nice to see you (laughter).
CHACE: Good to see you again. Thanks for having me back.
SULLIVAN: Yes, I'm just terrified that every time you see me, I'll look, like, 10 years older. And...
He looks just fine. He's been blogging all day. He has bed beard.
SMITH: Wait, what's bed beard?
CHACE: He just - he has a massive beard, and it looks like it was on a bed for a long time.
CHACE: All he's eaten for the day has been a Five Guys burger without the bun. Like, he's been working hard.
SULLIVAN: Since we last spoke, we've earned another $100,000 on top of the 500,000. And we're only halfway through February. So if it carries on at this rate, we're golden, but it won't.
CHACE: It won't because we're now at the point where there's this vast amount of people who have clicked the read-on button a few times, but not the magic seven. And those people are sort of in the store, and we don't know what they're going to do. They're kind of browsing around, picking things up. Will they subscribe when they get to seven? Will they pay? That's unknown. The fear now for Andrew Sullivan is that the momentum is tapped out. All those who love Andrew Sullivan, they've already signed up. These sort of newer shoppers, the people who get to 7 - will those people subscribe?
SMITH: And so that must freak him out because, I mean, he sees the data. He can see the people looking at one, two, three, four articles, but not quite paying yet.
SULLIVAN: Our worry is - I'll tell you what my main worry is. That big burst of enthusiasm at the very beginning is going to be very hard to replicate in a year's time.
CHACE: I mean, more importantly, what he's seen already - this is for a year. A subscription is supposed to mean a re-up. So can the activity that happens around Andrew Sullivan's blog this year, can it be replicated next year? Like, what is the annual budget for this business going to be? Is this a sustainable model?
SMITH: There is one thing that he is excited about. And that's something we talked about earlier, which is the way in which your content changes in order to chase viewers, in order to chase subscribers. He's seen something which actually gives him hope for the future, which is the kind of articles people are actually willing to pay for.
SULLIVAN: I've been most surprised by the popularity of the longer essay posts that I write.
CHACE: Oh, yeah.
SULLIVAN: ...Which I always thought were probably boring, long things that people would skip. Actually, they read them. And we know. We can see that now much more clearly than we could before. And not only that, but it's on those posts that they click to pay.
SMITH: A long-form essay - not exactly the classic way to make money on the Internet, but...
CHACE: Maybe that's the old Internet.
SULLIVAN: No one really wants to read all that about replacing Medicaid with Obamacare if you're just out for page views, right?
CHACE: So the experiment is still underway. It's just impossible at this point to extrapolate from the numbers now to the numbers next year or the year after. And Andrew Sullivan - he might be the one who makes it, sort of The New York Times of the blogging world. And good content gets a paying model that other people can replicate, and this could be a very happy ending.
SMITH: Yeah, happy ending for Andrew Sullivan if he's going to be The New York Times of the blogging world, but who's the Baltimore Sun of the blogging world, and how much money are they going to make? And so when I hear this story - I mean, it just slightly worries me because I think, what if you're the guy who's behind Andrew Sullivan? What if you're the 100th most popular political blogger? How many subscriptions are you going to get, and how many subscriptions total are people willing to buy? Three, four, five - how many people are you going to be patrons of in the future?
And so I have a little more pessimistic view of the media world. I think Andrew Sullivan will be fine. I'm waiting to see what happens to Maura Johnston. Are there enough people out there who are willing to pay for what she's offering to make her a success and to give inspiration to the other bloggers out there.
(SOUNDBITE OF SONG, "PORTIONS FOR FOXES")
RILO KILEY: (Singing) And it's bad news. Baby, I'm bad news. I'm just bad news, bad news, bad news...
SMITH: As always, we love to hear what you think of PLANET MONEY. Why don't you write us an email - firstname.lastname@example.org.
CHACE: You can find us on the blog, npr.org/money, Facebook and Twitter. I'm Zoe Chace.
SMITH: And I'm Robert Smith. Thanks for listening.
(SOUNDBITE OF SONG, "PORTIONS FOR FOXES")
RILO KILEY: (Singing) I know I'm alone if I'm with or without you. But just being around you offers me another form of relief. When the loneliness leads to bad dreams and the bad dreams lead me to calling you - and I call you and say come here...
NPR transcripts are created on a rush deadline by Verb8tm, Inc., an NPR contractor, and produced using a proprietary transcription process developed with NPR. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.