The Nikkei-owned, UK-based Financial Times is believed to be negotiating to acquire or invest in The Information, the subscription-based digital media company founded by Jessica Lessin in 2013. The Information derives some 90% of its revenue from subscriptions (the rest from events) and more than 10,000 subscribers pay $399 for a service which now employs more than 20 tech reporters and has been profitable for more than two years.
Subscribers get two exclusive (and sometimes ground-breaking) stories a day, invitations to networking events round the world, access an to compelling telephone conferences, subscriber summits, and the sense of being part of Jessica’s network as one of the best-connected people in Silicon Valley. The content includes detailed organisation charts of leading tech companies and “courses” of emails on specific themes.
Some media commentators were once sceptical about the all-subscriptions/ no-advertising strategy. But that was when the ads-supported BuzzFeed, HuffPost and Vice were spending like slam-dunk winners. It’s all different now and, even Business Insider – which led the sceptics at the launch of The Information – is chasing subscriptions, courtesy of owner Axel Springer which recognises that paid-for newsletters are the future of so much quality journalism. Everybody is following Jessica Lessin, and the business model for the upcoming UK launch of Tortoise (“slow journalism”) smacks of The Information.
Many observers (and Lessin herself) actually believe she pitched the subscription price too low, evidenced by the high pass-on readership and a negligible churn rate. She is now selling gilt-edged VIP subs to (sort of) make up for it. The point is that this brilliant media success is based on the production of high-quality content you can’t get anywhere else – wrapped in some smart personalisation.
It was Lessin’s frustration as a tech reporter on the Wall Street Journal that first got her thinking about the flaws of a conflicted journalistic model which depended on revenue from advertising as well as readers. She became fascinated by Politico and its ability to build a loyal paying audience, despite the prevalence of free content. Six years later, she says: “We’ve moved markets, gotten the early scoop on billions of dollars of acquisitions and told you what’s happening deep inside companies like Apple, Facebook and Google. Our stories have been followed by the Wall Street Journal, the New York Times, Bloomberg and other major outlets thousands of times. How we compete is simple. We recruit the best reporters, give them the freedom to write about important topics and tell them not to worry about the small stuff.”
She used family money to start the San Francisco-based business and owns it 100%. It’s a funding model that has imposed a distinctly unfashionable sense of financial discipline – and has given her independence. But the obvious question she has been debating with a small group of advisors (including Politico and Axios founder Jim VandeHei, Paul Steiger, chair of ProPublica, and Tina Sharkey, of Sherpa Capital) is: how to grow from here? She has identified fintech, biotech and media as key areas of expansion.
The 900k-subscribers, £300m-revenue FT likes Lessin’s strategy and has been discussing ways it could help to accelerate the growth, especially in Asia. The FT’s global reputation as a solid long-term supporter of quality journalism and also a supportive business partner has more than survived its 2015 acquisition by Nikkei. It could be a great fit for The Information if they get the structure and the deal right.
Lessin has said: “We are pretty ambitious and we don’t want to close off an opportunity because it means joining up with an investor. But it would have to be a case of an investor helping us to go after a big opportunity we couldn’t go after alone.” Is that the signal the FT was looking for?