Puck News is a three-year-old digital media company self-consciously focused on the four centres of power in the United States: Silicon Valley, Hollywood, Washington DC, and Wall Street. It’s now expanding also in sports but you get the picture.
It was founded by editor-in-chief Jon Kelly (ex New York Times, Bloomberg and Vanity Fair) with the now-departed Joe Purzycki (co-founder of podcast company Luminary); and Max Tcheyan (ex The Athletic). Kelly recruited a handful of established writers (including Dylan Byers, Julia Ioffe, William D.Cohan and Matt Belloni) who write their own newsletters.
He had started his career on Vanity Fair and experienced some of the vintage days as a bag-carrier for editor Graydon Carter. But he also witnessed the steep decline as advertising and readers were snaffled by the web. Kelly gave up publishing to join TPG private equity and distantly watched what had once seemed to be the future of news. The free sites BuzzFeed, Gawker, Vox and Vice had huge audiences (and investment funding) boosted by platform traffic – until Facebook and Google decided to change the algorithms and manage their businesses for themselves. Of course.
The apparent collapse of the free digital news business model (at least at the clickbait end of the market) was accompanied by the growth of subscriptions at quality news brands like the New York Times and The Guardian and new specialists like The Athletic and The Information. Subscription newsletters fuelled the rise of the Substack platform and vice versa.
Even while the egregiously-funded BuzzFeed and Vice limped on (and still do), it had long been obvious that the business models were broken – not the demand for news itself. Many businesses had been wrecked, ultimately, by their long-term, pre-internet dependence on advertising – and, then, by the historic folly of flooding the web with free newspaper content even while print readers were expected to pay.
But, in a world of flaky politicians, fake news, geopolitical menace and tech-enabled frenzy, there is a renewed appetite for good journalism.
That’s why the events-rich Semafore – which has so far eschewed paid subscriptions – has succeeded in turning a profit within two years of launch, why Axios justified a sale price of $525mn in 2022, and Morning Brew was worth $75mn in 2020. They are but three of a fleet of digital newsletters including Punchbowl (politics) and The Ankler (Hollywood) which have adopted similar strategies with exclusive content, tight targeting and cost control. The Axios trademarked “smart brevity” slogan says all you need to know about captivating a smart, picky and time-poor audience.
Puck was launched in 2021 to bridge not only the four pillars of US domestic power but also the two worlds of traditional journalism and specialist newsletters under which writers make money directly from subscribers. As its website says: “Puck is a platform for smart, engaging (and, yes, occasionally dishy) journalism owned and operated by the journalists themselves.” Its named after the know-all, comic character in Shakespeare’s A Midsummer Night’s Dream.
Jon Kelly has told his readers:”I first began imagining Puck sometime in 2019. Part of it was personal. I’d begun my career nearly two decades earlier, in the heyday of the magazine business, working under the tutelage of Graydon Carter, the legendary editor of Vanity Fair. In those days, Graydon’s office was a bustling operation—manuscripts came in hourly for top-editing, handwritten notes to politicians and executives and writers had to be dispatched, the commercial side of the business needed to be managed, as did the egos and vicissitudes of photographers, stylists, and illustrators. All while the phone rang endlessly – David Geffen, Sue Mengers, Barry Diller, Annie Leibovitz, Fran Lebowitz, Sidney Poitier, David Halberstam. The most important part of the entire enterprise, however, was that Graydon always put the writers at the center of the business.”
He added: “But the business, as we knew it then, was all starting to change. During my subsequent tours at the New York Times, Bloomberg, and eventually co-founding The Hive (at Vanity Fair), I saw the irrevocable transformation first-hand. Just as Napster had deconstructed traditional music albums into individual songs in the aughts, social media platforms were unbundling magazines into articles. And yet I was optimistic that there would be a new heyday to come. After all, the music industry had boomeranged back in the streaming age by leveraging the powerful connection between artists and their audiences to create a subscription-based business model, which helped listeners to discover other artists that they might like along the way. Journalists, perhaps the original influencers, were due for the same transformation.”
He launched Puck with funding from TPG (which had backed Graydon Carter’s Air Mail newsletter). Even the business model is distinctive with each of the founding partners owning a share and being paid bonuses for the subscriptions and advertising revenue generated by their newsletters. Writers are said to receive a base salary and $10k for every 1,000 subscribers they bring in above a threshold. It all feels a bit more like a co-operative than the other ambitious incarnations of the Substack-ification of media.
The journalism is all very personal too and the $100 annual subscription gives readers “private emails” from the authors; $250 gives access to conference calls and events with the staff. Part of the appeal is that its writers are seen actually to move in the same circles as the people they are writing about; they’re on the inside and use all the snippets and gossip to emphasise that. It’s the highly personalised community approach so deftly employed by The Information, launched by Jessica Lessin in 2013. Readers pay to read stories they can’t find anywhere else and enjoy being part of a community – and on the inside of news and events that matter to them. Puck’s pitch deck for funding claimed its audience comprised “the most influential people in America.”
By contrast with many subscribers of legacy news brands, these newsletter readers also like the idea of relatively quick, same-time-each-day reading rather than a whole bundle of news, information and entertainment to sift through. While its financials are closely-guarded, Puck – which has raised about $20mn in total – is not thought to require additional funding. It is believed to have 40,000 paying subscribers but the majority of its reported $10mn revenue in 2023 came from advertising including sponsorship of the newsletters and 25 events. “We believe that Puck has the ability to be a big business” Jon Kelly said on the recent appointment of CEO Sarah Personette (ex Meta, Twitter and Refinery29). She is now expected to speahead the rapid expansion of events and podcasts – and the breakthrough to sustained profitability, espected in 2024-5.
It’s a bit of a stretch to assume that the future of news is all about newsletters and the email inbox. But they have certainly proved an effective way to capture large tranches of a digital-native readership that remains beyond the reach of newspaper-centric brands. In many cases, they have succeeded in building innovative, habit-forming new media at surprisingly low cost.
The Puck emphasis on putting the writers at the heart of the business as well as the stories they are writing is, arguably, the logical follow-on from the evolution of a news business that once depended on a mountain of mechanical resources, people and capital. Now, of course, it can come down to not much more than the journalists themselves. You know the story of how newspaper owners once needed to own printing presses… Well, a handful of journalists, steeped in their subject, can now compete profitably with legacy newsroom teams of hundreds more.
This “Creator Economy”is defined by the way that journalists have come to realise that they can be revenue drivers by themselves and no longer need a large-scale media company to help them find an audience. In recent years, many of these awoken journalists have been quitting their jobs in mainstream media to launch newsletters, podcasts and YouTube channels. It’s also happened in specialist magazines.
Suddenly, media is all about the journalism.
That’s why Puck has just 40 employees. While it would be ridiculous to contrast the headcount with the New York Times’ 5,800 (30% are journalists), the numbers are a reminder of how traditional businesses can be prisoners of their past – with costs that owe more to where they have come from than where they may, ultimately, be going. Puck is providing readers with only a tiny fraction of the NYT’s wealth of journalism. But that’s the point. Newsletter specialists are giving readers the opportunity to choose what they want while traditional media insists – and depends – on providing the whole bundle, whether in print or digital.
It’s a timely reminder after a month during which the New York Times, Guardian, the Times of London and others have demonstrated that – even at their much-reduced levels of advertising and hugely enhanced subscription revenues – they can be rocked by falling digital ads. Things can still get worse for traditional news brands – at least until readership revenues really are sufficient to fund the scale of their businesses. The news brands, once happily trapped by “excessive” advertising revenue, arguably, now need the remaining ads more than ever. Ads were once most of the revenue, now they’re most of the profit.
That’s another reason why traditional media should learn the lessons of the low-cost newsletter insurgents.
For all the marketing emphasis on the newspaper-like news, information and lifestyle “bundles”, traditional news publishers know that readers value the columnists, op-ed and viewpoint journalism in a way that, arguably, mocks their relatively low share of the overall content and budgets. That’s why many journalists can so readily benefit from going it alone.
Many breakout journalists choose the Substack platform simply because it requires them to do little more than write the content as they have been doing for newspapers and magazines. They may not care that (unlike, for example, most podcasters) they have sacrificed some of their independence by signing exclusively to the one dominant platform.
But there’s more.
Some 200 newsletter journalists have recently been in revolt over (reportedly) more than a dozen Nazi-sympathetic newsletters on Substack and the realisation that the open-access platform may become a less comfortable ‘home’ than they thought.
The backlash may be a golden opportunity (or, at least, a cue) for traditional news and magazine brands.
Media companies should consider the potential advantages of operating in the ‘Creator Economy’ by publishing independent newsletters, including those written (and owned) by their existing or former journalists. News brands could publish newsletters on behalf of their columnists and, say, motoring magazines could do the same. They could consider building a self-publishing ecosystem like Substack – and get comfortable with the fact that many of the “clients” will be competing with their own digital and/or print publications. They can (and should) become partners with the very journalists they once employed. That’s the future.
In doing so, legacy media would be building (however gradually) a new business for the longer term. Acquiring the appetite and skills for specialist, self-supporting newsletters (not mere promotion for existing brands) really could be at least as important as podcasts for traditional media.
The alternative is just to stand-by and watch while the lean and hungry insurgents continue to wage a war of attrition against heavyweight incumbents. There is almost no area of traditional media that should not be inspired and motivated by the “new journalism” vibe of Puck, Axios, Semafor, Air Mail and the rest. But some should be more vigilant than others.
What are you waiting for?
