Postgame is one of the times when The Athletic’s live rooms shine. The writer-hosted live rooms — which sometimes get called “live podcasting” because the finished results are often posted to podcast feeds — are a two-way audio platform for Athletic beat reporters to have conversations with subscribers. If you’re a longtime sports fan who has turned an AM/FM dial or two in your day, the format might feel familiar.

“Technology is cyclical in a lot of ways,” Will Bartlett, The Athletic’s senior audio development specialist, acknowledged. “It feels like we’ve just reinvented sports talk radio, just making it a little bit more accessible to people in the 21st century.”

“We try to encourage writers to do it around Moments with a capital ‘m,’” Bartlett added. “So when, you know, the Celtics lose on a last-second shot from James Harden and the Sixers, let’s try and get on there as quickly as possible. People are going to be on edge and wanting to vent to [The Athletic’s Celtics reporter] Jay King the way they would want to vent to [Boston-area sports radio] WEEI or something like that.” (Boston sports fans on edge? Can’t imagine it!)

The live rooms I’ve joined do replicate the fun ephemerality of sports radio and — more recently — certain struggling social audio apps. The Athletic’s live rooms are recycled into specific team podcasts and league-level feeds, but most are not exactly evergreen content. Anyone can listen in, but only subscribers can ask questions using the chat-like text box or being invited to speak by one of the hosts. Non-subscribers run into The Athletic’s paywall after clicking on one article, so live rooms are one of the only ways readers can sample the outlet’s content before getting their wallet out.

The Athletic’s first live room took place in September 2021. By January 2022, they’d done 100. Today, they’re closing in on 1,000 live rooms. Most have between 50 and 250 listeners. They tend to follow a similar format: the beat writer(s) give a “State of the Union”-like update about the team before opening the floor to questions, comments, and provocations from listeners.

“It’s sort of an in-app version of Twitter Spaces for us,” Bartlett said.

But, unlike Twitter Spaces, the live rooms exist on The Athletic’s app. With prominent cautionary tales about what relying on social media platforms can do to a newsroom ringing in our ears, The Athletic’s choice to build on its own turf makes plenty of sense.

The Athletic prompts all subscribers to follow a team or league and uses these preferences to build a user’s homepage — and to send push notifications when a live room begins. A user who has followed tags for football’s Cincinnati Bengals and the NFL at large, for example, might get pinged for a live room about Cincinnati’s draft picks as well as league-wide news like quarterback Aaron Rodgers being traded to the New York Jets — even if the breaking story discussed in the live room isn’t about their local team.

The majority of listeners make their way to the live rooms through those push notifications from the newsroom’s app, Bartlett said. Others find them through organic discovery (i.e. clicking around in the app) and social media.

If looking to kill time and fill your brain with even more #Bengals draft theories and rumors, @JayMorrisonATH & I are doing a live room on @TheAthletic app at noon today.

Anyone can listen, subscribers can ask questions. Come on over. https://t.co/rNhRwlWtxI

— Paul Dehner Jr. (@pauldehnerjr) April 27, 2023

No podcast today because @thrace and I are gonna hang out in a live room on @TheAthletic tomorrow to discuss #NWSLChallengeCup and anything else y’all want to talk about!

2 ET. Bring snacks and questions. (And if you miss it live, it will be a podcast episode right after!) pic.twitter.com/LbxqdBxA6d

— Meg Linehan (@itsmeglinehan) March 17, 2022

Scheduled off day for the #STLCards today, but still plenty of things to talk about!

Let’s do a one-hour trade deadline live room at 12 pm CT. You don’t need to be a subscriber to @TheAthletic to join, but you do need to subscribe to ask questions.

Link posted here at 12.

— Katie Woo (@katiejwoo) August 1, 2022

When going live postgame, journalists and fans rehash missed opportunities, on-the-field celebrations, and more. During the offseason or in pregame coverage, the group can prognosticate and predict to their hearts’ content. The whole time, both writers and those invited to speak can assume they’re among fellow diehard fans. In my corner of the sports world, that means Jay King might feel free to mention the Kornet contest — a goofy vertical leap a certain Boston bench player attempts even when half a court away from the shooting player — one moment and, the next, dive into bigger-picture narratives like how two of the team’s brightest stars work together or how All-NBA selections could shape the team’s future.

There aren’t strict requirements or quotas for Athletic reporters around the live rooms. (“Our writers are writers first and foremost,” Bartlett said. “We want these to be something that writers want to do. There’s never going to be a mandate around these.”) But for new hosts looking for guidance, Bartlett encourages them to slot something in between 8 a.m. and 10 a.m. or between 4 and 6 p.m. local time. Noon has also proven to be a popular option, presumably because listeners are tuning in during lunch breaks.

“We’ve definitely seen our highest rates of engagement around times that you would see in traditional sports radio, including those commuting times,” Bartlett said. “One advantage that we do have over traditional sports talk radio is the ability to send push notifications to all of our followers at different times.”

The largest audiences haven’t always been for rooms about teams in the largest cities. The beat writers who cover the Cincinnati Bengals host a popular live room every Monday at noon. Live rooms from a writer who covers NHL’s Minnesota Wild team were popular enough to break the app a couple of times. The beat writer for the St. Louis Cardinals also tends to draw a crowd.

“Not a lot of those [locations] are super-saturated markets in terms of news coverage,” Bartlett said. “This is a way for us to serve some of the markets [that] don’t have national writers living there or ESPN there every day — but we happen to have a very well-plugged-in writer in that spot.”

Katie Woo, the staff writer for The Athletic who covers the St. Louis Cardinals, said she likes being able to drop information and ideas she might not use in a story in live rooms.

“It’s a great way to make fans and subscribers feel connected to their teams,” Woo said. “Being able to have people call in and actually ask their questions in real time to a real voice, instead of debating online, has led, in my opinion, to productive conversations.”

A lot of listener questions are hypotheticals, “usually pertaining to roster moves, trades, or free-agent signings,” Woo said. She occasionally gets story ideas from the conversations, she added, “but the main reason I use the rooms is [that] it helps me feel more connected to the subscribers. Hopefully they feel the same.”

Saad Yousuf, who covers the Dallas Stars for The Athletic, recently held his first live room. (He has a side gig hosting a weekly radio show in Dallas, so he’s not exactly new to audio.) He described the live two-way audio form as a “great supplemental tool” for his written coverage.

“The fans who joined the live room are subscribers who read my work routinely, which differentiates it from something like Twitter Spaces, where anybody can join, even if they aren’t subscribers,” he said. The rooms help him “get a pulse” on which topics readers feel most strongly about, and which questions he should make sure to answer in his next article.

Bartlett said the live rooms can be a type of training ground — an opportunity to get some audio reps in — for writers who may eventually launch a podcast or earn a hosting gig on an existing show with The Athletic. “It’s one way for us to identify talent down the road,” he said.

With more than 800 live rooms completed, The Athletic has had roughly 2,000 people get “on stage” to ask questions live. Hosts have moderation tools, similar to the ones Twitter Spaces offers, but Bartlett says said they’ve had “zero trolls” thus far. From what I’ve heard, plenty of subscribers “call in” with a question-that’s-more-of-a-colorful-rant that brings legendary sports radio meltdowns to mind but, overall, there’s less casual racism and sexism.

“It’s one of the more positive places on the internet, for the most part,” Bartlett said. “People are just there to talk sports.”

The New York Times bought the sports news site for $550 million in cold hard cash back in January, but it’s only this week that bundle subscribers are being offered the chance to hop The Athletic’s paywall.

A slide deck presented to investors by The New York Times earlier this month announced the addition and shed light on what the Times hoped to gain by acquiring the 5-year-old sports news site. The Times sees a “highly attractive opportunity” to cross-sell individual subscriptions and — crucially — add value to its bundle because of the “modest” overlap between subscribers to the Times and the 1.26 million with a standalone subscription to The Athletic, the deck explained. The Athletic joins Cooking, Games, Wirecutter, and, of course, news in that all-access digital bundle.

Unsurprisingly, The New York Times sees multi-product subscribers as the most valuable. They pay the most, retain the best, and engage more than any single-product subscriber group. Bundle subscribers churn at rates 40% lower than subscribers who pay for the basic news-only subscription, according to the Times.

In addition to bolstering its bundle, the Times plans to implement a more flexible paywall at The Athletic to give potential subscribers a chance to sample the sports content. It will also use the Times’ digital advertising muscle to “unlock significant advertising revenue” at The Athletic, which currently brings in under $10 million in ad revenue each year through limited sponsorships. (The site’s founders originally envisioned an ad-free site.)

The Times, which has been experimenting with personalization including geotargeting in its news division, also highlighted The Athletic’s customized notifications. “Following one or more leagues is one of our strongest predictors of retention,” according to the Times.

You can see the full slide deck prepared for investors here. Current home delivery and all-access digital subscribers should head to the Times to claim their access to The Athletic.

Congratulations to both sides of the deal. For the Times, how much pleasure must there be in reading old (but not that old) takes arguing the Old Gray Lady would soon breathe her last? Instead, it’s built a world-class subscription engine that throws off enough sparks that they can drop half a billion on something and pay in cash.

And for The Athletic, they’ve proven out part of its original thesis: that you could create a high-quality national sports product that, even in such an overcrowded space, gets more than a million people to pay for ir. The web has spawned a zillion sites that cover sports from coast to coast, but they’ve almost always been free to read, funded by ads. The Athletic thought The National was just 30 years too early to build a big paying audience, and they were right.

(That that last link is to a Grantland oral history of The National is a reminder of how unforgiving certain corners of the sports media market can be.)

The part of The Athletic’s thesis that still awaits its Andrew Wiles is: …and you can be profitable doing it. The Times — with its subscription prowess, its huge marketing platform, and its plug-and-play ad system — has as good a chance as anyone to figure that one out.

But this team-up has re-raised questions about The Athletic’s impact on local newspapers. Back in 2017, one of its co-founders famously let these words come out of his mouth in front of a reporter:

We will wait every local paper out and let them continuously bleed until we are the last ones standing.

We will suck them dry of their best talent at every moment.

We will make business extremely difficult for them.

Which were very jerky things to say! And, maybe worse, saying it in front of a reporter solidified the impression that these upstarts saw an industry to be fleeced more than an audience to serve.

Hmmm. I subscribed to a humble startup that I was rooting for. Perhaps, before being poached, I’ll cancel my subscription. https://t.co/PuFEDsg27Y

— Barry Svrluga (@barrysvrluga) October 23, 2017

Damn, The Athletic pivoted to evil

— max (@MaxOnTwitter) October 23, 2017

Silicon Valley founder nerds talk like Marvel villains. “Hear now: we offer no quarter. Expect none.” Okay man, good luck with your website.

— David Roth (@david_j_roth) October 23, 2017

And now, combining that attitude (which The Athletic immediately regretted voicing) with the Times’ reach and power is resurfacing many of those worries. Here’s the always perceptive Aron Pilhofer, for instance:

It turns out, The New York Times does really care about local news — just not in the way we thought. By purchasing The Athletic, which covers 270-plus sports teams in more than 47 local markets, The Times has placed itself in direct competition with every local news site for the same pool of subscribers. And since the average number of news sites people will pay for is one, that is very bad news indeed for local legacy news organizations.

Newspaper execs will say The Times has been competing with them for decades, which is true. But The Times has never competed as directly in a domain (local sports) that, until now, was largely owned by local news.

Sports is among the last vestiges of the regional monopolies local newspapers enjoyed before the internet era. Granted, sports isn’t the only reason people subscribe to a local newspaper, but it is one of them. It is also one of the topics local newspapers traditionally do well. Passionate fans can name their favorite columnists, their favorite writers. Those are the folks The Athletic was courting when it launched in 2016.

You can bet those newspaper execs slept not a wink last night imagining their hard-won subscribers receiving solicitations for a future bundle that includes the nation’s best news site, Cooking, Games, Wirecutter, and all the local sports coverage anyone could ever want.

At the risk of being proven wrong (and Aron laughing at me at some future post-Covid gathering): I’m not as worried about the impact this will have on local newspapers. I think those newspaper execs can probably go back to sleep. (Or, perhaps more accurately, there are lots of other things that should be giving them more nightmares.) Here are a few reasons why.

The talent pool isn’t dry

Let’s get this out of the way first. The Athletic did, in fact, hire a lot of talent away from newspapers. Some of them were big names famous in their markets; others were the younger reporters stuck behind those bigger names in the newsroom hierarchy — the journalism equivalent of talented adjuncts bitter toward the full profs who somehow lucked into an endowed chair.

But the market for sports reporting is strange; there are always more people who could be capable sports reporters than there are jobs to employ them. So as a profession, it can take a little, er, “pillaging” without too severe a talent drop-off.

(It is, in other words, precisely the opposite of NFL quarterbacks.)

Bet you can’t eat just one

It is often said that, as Aron puts it, “the average number of news sites people will pay for is one.”

First off — how great would it be if the average American actually had one digital news subscription? In reality, the median number of news sites people will pay for is a big fat zero.

Second, not all digital subscriptions compete directly with one another — and those that do don’t all compete in the same way.

I mean, there’s a zero-sum sense in which people only have so much total money to spend, and all digital subscriptions “compete” for those dollars in the same way that McGriddles, parking tickets, HBO Max, and rent are all constrained by a common overall budget. But most digital media subscriptions aren’t as interchangeable as, say, print newspapers used to be in a two-newspaper town.

Take a market that’s hits-driven — streaming services. There, multiple subs can be the norm. 92% of Apple TV+ subscribers also get Netflix, as do 90% of HBO Max subscribers, 87% of Disney+’s, 85% of Hulu’s, and 84% of Amazon Prime Video’s. Now, Netflix is obviously the big game in town, but there’s plenty of overlap elsewhere too. (Of Hulu subscribers, 79% get Amazon, 68% get Disney+, 38% get Apple TV+, and 32% get HBO Max.) It makes sense: Netflix might be your go-to evening watch, but a lot of people will be happy to pay a bit more not to miss “Ted Lasso,” “Succession,” “The Mandalorian,” or “The Handmaid’s Tale.” The average American household pays for four streaming services.

But look at a different kind of market: streaming music. Apple Music and Spotify will each give you access to pretty much all the music you need. There’s very little reason to have a subscription to both; witness Spotify’s attempts to differentiate itself through having its own exclusive horse-paste enthusiasts.

Now, to be blindingly obvious, digital news is not like either streaming video or streaming music as a market. For one thing, a larger share of high-quality news is available for free than the share of, oh, high-quality dramas about Waystar RoyCo. Individual news stories are shared socially, of course, but they rarely become must-consume cultural touchstones in the way a TV series can. And the total time most people spend seeking entertainment from a flatscreen dwarfs the total time they spend looking for news.

For streaming music, a subscription gets you access to (practically) all music. You could buy a dozen digital news subscriptions and there’d still be thousands of paywalls all over your Twitter feed.

But it’s also true that different outlets compete on different playing fields. The Washington Post and The New York Times? Definitely direct competitors. The New York Times and, say, Slate? Yes, competitors — they cover broadly similar topics — but it’s unlikely someone who subscribes to one would cancel the day they started paying for the other. They’re differentiated in tone and editorial approach; one aims to be comprehensive while the other picks its spots; one puts a huge amount of its subscription value on podcasts, the other almost none.1

The Atlantic and The New Yorker? Definitely direct competitors. The Atlantic and Wired? Yeah, there’s some overlap there, but not one-for-one. Wired and Vogue? Very little.

Axios and Politico? Definitely direct competitors. Axios and The Skimm? They’re both free email newsletters that aim to bullet-point the news for busy people — but their subject matter, tone, and relative tether to the news cycle make them quite different.

There’s a big difference between products that might be competitive and those that might be substitutable. I think a sports product like The Athletic and a local newspaper are distinct enough that, for consumers, they’re pretty weak as substitutable goods.

A rising tide

Has The Athletic wrecked the digital subscription business of local newspapers? Not really. And, to be honest, neither has the Times.

Digital subs for local newspapers are way up from The Athletic’s threatened continuous bleeding. In 2017, Gannett had 341,000 digital subscribers; in 2019, it had 712,000; today, it has 1.5 million, up 46% year-over-year. Less than two years ago, the smaller chain Lee was psyched to announce it had 100,000 digital subscribers; last month, it said it had passed 400,000.

Now, would those numbers have been, say, 5% higher if The Athletic had never come along? Maybe — but I doubt it’s actually made much of a dent. The markets for “local news and information” and “national sports teams, some of which are based nearish my house” overlap less than you might think. And the same is true for the Times: All of that local digital sub growth has come at the same time that Times subscriptions have been rocketing up too.

There’s no question: The Times has been wildly more successful than your local daily at signing up digital subscribers. But why? I think there are two ways to look at it — and one, derived from the days of print, can lead people astray.

Thought 1: “The New York Times and the Townsburg Daily Gazette are both newspapers. They both assemble similar bundles of information — news, opinion, sports, arts, food — and compete for the audience’s attention and dollars.”

Thought 2: “The New York Times and the Townsburg Daily Gazette are fundamentally different products. One of them is all about national and global news, politics, culture, business, and discovering that monocles are a trend. The other is all about this community, Townsburg — what’s the mayor’s up to, why’d that restaurant close, what’s that construction project on 4th Street, is Townsburg High’s football team any good this year? Both of them produce “news,” broadly defined, and they both have tremendous value. But there’s rarely a story in the Gazette where I wonder, “Huh, I wonder what The New York Times says about this” — and almost never a Times story I expect the Gazette to be competing on.”

I think the misconception is that the Times and your local daily are making the same thing, just at different levels of quality and with different levels of resources. They’re not. In the print days — when huge swaths of newsprint were given over to national and international news, wire sports and agate, syndicated columnists and national ads — there was an argument for that view. But not in a digital world.

“Local” isn’t local

Finally, I think it’s a misconception that The Athletic is offering “local sports.” The Athletic covers national sports leagues, professional and quasi-professional, which happen to have teams in large metropolitan areas around the country. An NFL game will be more interesting to people who live in the urban conglomerations that the teams call home — but it’s in no way only interesting to them.

Is The Athletic a competitor to, say, the Atlanta Journal-Constitution for Falcons news? Sure.2 But it’s hardly the first. ESPN, Fox Sports, Yahoo Sports, SI, Bleacher Report, SB Nation, CBS Sports, NBC Sports, Defector, the corpse of Deadspin, wire stories, Twitter, the Falcons itself, Matty Ice’s sparkling Facebook presence — there’s a ton of competition.

What have been the three biggest drivers of interest in those national sports leagues over the past decade? Social media, fantasy sports, and gambling. Social is all about individuals — players and reporters tweeting cryptic diss tracks and free agent scoops. Fantasy is also about individuals — all the players league-wide, not just your local team’s mediocre tight end. And if you let your personal fandoms drive your gambling habit, well, you won’t be a very good gambler. All three of these forces push fan attention away from your local team and up toward the league and its array of personalities.

(It’s also worth noting here that of the 1,200-plus daily newspapers in America, the vast majority of them don’t cover a single team that The Athletic does. We’re really talking about 40 or 50 metro papers here.)

“Local sports” isn’t the Lakers or the Yankees, from a local publisher’s perspective. That’s a slice of national sports that’s been deposited in your region, and the competition over it is already fierce. If someone is really buying the L.A. Times only for its Lakers coverage, well, they likely weren’t going to stick around for very long anyway. There’s just too much competition, the vast majority of it free.

And not to harsh on The Athletic too much — but their output makes it clear that their editorial ambitions for deep-market coverage are…constrained.

I root for the Louisiana Ragin’ Cajuns, who had a very good football team this year. They went 13-1, won a bowl game, and finished the season ranked No. 16 in the nation. I follow The Athletic’s coverage of the Cajuns — want to guess how many stories they actually wrote about the team this year? Two.

I also root for the New Orleans Saints, who had a super-dramatic finish to their season on Sunday afternoon. How many Saints stories has The Athletic run in the nearly 48 hours since? One. It’s a good story! But the hometown paper, The Times-Picayune, has run 10 in the same time.

“Local sports” is high school football, the volleyball star getting all the D-1 offers, the D-III college that no one else covers. The Athletic is never going to touch that. It’s not as sexy as the big leagues — just as covering city hall isn’t as sexy as covering the White House, and covering the logistics company that’s your region’s largest employer isn’t as sexy as covering Google or Apple.

But that’s just…reality. The Townsburg Daily Gazette isn’t going to win by putting reporters on Joe Biden and Tim Cook full time — a newsroom should stick to what it can do best. For a local newspaper and The New York Times, there’s almost no overlap between those two “bests” — even with The Athletic aboard.

1. I’m not saying the Times doesn’t put lots of value on podcasts — of course they do. I’m saying they don’t put a lot of subscription value on them, because The Daily and its other shows are free to everyone. They convert people into subscribers, but access to them is not why people type in their credit card number.
2. This is a trick question: No human alive today has ever cared about the Falcons.

“We will wait every local paper out and let them continuously bleed until we are the last ones standing,” Mather said. “We will suck them dry of their best talent at every moment. We will make business extremely difficult for them.”

Four years later, is the business of local news extremely difficult? Yes. Will The Athletic be the last ones standing? Probably not, according to a report in Axios.

The New York Times is in talks to purchase The Athletic and it would not be a “joint venture” or partnership but a full acquisition, Sara Fischer reports. (A Times spokesperson declined to confirm the talks: “As a general matter of policy, we do not comment on rumors about potential acquisitions or divestitures.”)

The Athletic gobbling up all the local beat reporters to then be swallowed up by the Times is a perfect window into the modern media landscape. https://t.co/0gqrUbCEz2

— Aaron Nagler (@AaronNagler) May 25, 2021

You could argue that the NYT’s share of wallet in news subscriptions puts it in direct competition with local publishers. This has the potential to do it further. https://t.co/xIu9rchk69

— Daniel Petty (@danielpetty) May 25, 2021

The New York Times is a more natural home for The Athletic than Axios, where previous acquisition talks fell apart. Unlike Axios, the business models of the Times and The Athletic both revolve around subscriptions. But though The Athletic brought in a reported $80 million in revenue last year, the sports news site is not profitable. It also employs 600 full-time staffers — including 400 in editorial alone. What might The New York Times want from the deal?

Some of The Athletic’s 1.2 million subscribers, for starters. The Times could be thinking about a building out a subscription product for sports, like Cooking for recipes, Games for puzzles, or Audm for audio. (The Times is already testing subscription products around its consumer review site Wirecutter and content for children.)

The Athletic has generated other revenue streams, including a paid partnership around online sports gambling. Here’s how The Athletic put it to readers when announcing its partnership with BetMGM:

We’re going to be getting data from them that will make stories and columns deeper and more insightful. Yes, we’ll be linking lines and odds back to their sportsbook (and most links will carry a generous sign-up offer) — but you have to play somewhere, right? […]

We’re well aware that sports betting isn’t for everyone — and chances are it’s not even legal yet in your state — but a good sports betting story is a good story, period, and we think you’ll enjoy nearly everything we publish, regardless of what you do with the information afterwards.

Is sports betting a revenue stream that The New York Times is willing to embrace? The other scoop in Fischer’s newsletter — she’s good, people! — suggests legacy news organizations may be getting comfortable with the idea.

Fischer reports that the Associated Press is partnering with the online sports gambling company FanDuel, who will pay the AP “an undisclosed amount” to link, exclusively, to FanDuel when referring to betting odds. (The AP will not link directly to betting pages, so this is more paid content than direct affiliate marketing.)

See this, to me, is how The Athletic *really* monetizes; I’d have guessed there’d be no way in hell for the NYT to get over that hurdle, but if the AP is in on the sports gambling bonanza, I likely guessed wrong https://t.co/It1wun8Oke

— Chris Krewson (@ckrewson) May 25, 2021

As we learned this week, top leaders at the Associated Press are very concerned that the wire service’s stories may appear biased, but not so concerned that they won’t allow FanDuel to pay to include the company’s betting odds in AP sports stories. https://t.co/R1QS43qc9Q pic.twitter.com/FVYWgvS7Lz

— Max Tani (@maxwelltani) May 25, 2021

Dirty secret about The Athletic is that it’s actually a sports gambling play. I paid like $10 for six months and while the articles are good, they don’t even write up every game. Plenty of odds though. Interesting to see how hard the NYT/AP are leaning into sports betting.

— Gautham Nagesh (@gnagesh) May 25, 2021

You can read the full report — including a recap of the Times’ rather “mixed track record” in dealmaking — here.

As Tronc reckons with the crash of its stock price and oh-so-private Alden Global Capital gets publicly accused of financial irregularities, the plot of who will own America’s newspapers companies just thickens.

Let’s look at the big questions arising out of the Tronc and Alden news, and a few others generated by this remarkable news week.

What’s the sound of a Tronc crashing?

Thursday marked a day of reckoning for Tronc. The company — the last big public newspaper company to report year-end earnings — released those numbers for 2017. They weren’t good, as I had signaled in my earlier reporting on the chaos at and subsequent sale of the Los Angeles Times. But what followed seems to be much more than a reaction to that report. In a single stunning trading session, Tronc lost almost a quarter of its market value — or $160 million, down 24 percent.

From a January high of $21.55, Tronc shares closed at $15.05. That’s 30 percent down in total.

Why? It’s always tough to pinpoint investor rationale. In this case, though, three factors seemed to drive the crash.

First, the company’s financials themselves. Its adjusted earnings per share fell by more than 35 percent year over year, and overall revenue looked down by almost a tenth.

Second, the company, oddly, offered little “visibility” into how it would perform this year. That’s de rigueur on such quarterly analyst calls.

Instead, Tronc CEO Justin Dearborn surprised the call’s four analysts by saying: “Looking ahead to the remainder of 2018, given the pending material divestiture [the L.A. Times sale]…we are going to deviate from our normal practice of providing a financial outlook for 2018. We anticipate providing it on our first quarter 2018 earnings conference call as we have a better understanding of the impact of our recent actions on full-year performance.”

In other words: We haven’t yet figured out how Tronc will perform financially without the Times and San Diego Union-Tribune. Or alternatively: You wouldn’t like what we’d have to tell you.

Third, it failed to answer several questions from the analysts on the call. Read the call transcript, and you can see the analysts pushing for answers on the business ahead, the impact of tax changes, and even the performance of the recently purchased New York Daily News. Further, analysis of Tronc’s performance was made more difficult by the need to account for a “53rd week” in the fourth quarter, something the calendar forces them to do every few years. Most newspaper companies have broken out both a 53-week and 52-week comparison on their key metrics, but Tronc’s such reporting was limited.

Doing the math, Tronc appears to be down 9.6 percent in overall revenues year over year, on a “same-store basis.” That puts it no better than the middle of the pack of its newspaper group peers.

The fourth quarter posed particular issues — and no surprise, sources tell me, the circus at the L.A. Times exacerbated ad sales.

In that fourth quarter, Tronc was down 19.7 percent in its print ad revenue. Circulation revenue was down 3.5 percent. TroncX, the company’s digital division, was up 1.4 percent in revenue. (These results all reflect close-to-apples-to-apples 2017 to 2016 comparisons, with that 53rd accounting week of third and fourth-quarter financial contributions of the New York Daily News removed.)

Overall, analysts found themselves unpleasantly perplexed, and we have to believe that their investor advisories helped send Tronc shares tumbling.

If the numbers and the lack of outlook were surprising, the bigger questions may have sounded an alarm with the investors who had bid up the stock since September. That question, in a nutshell: What’s chairman Michael Ferro’s strategy now, after selling the California papers?

On Feb. 7, as it announced the Times’ sale, Tronc said it was “embarking on a national digital growth strategy through its newly reorganized Tribune Interactive division.” On Thursday’s call, again oddly, there was no mention of the Tribune Interactive push, or of its leader, the newly reinstated Ross Levinsohn, the just-departed L.A. Times publisher.

That digital strategy also now includes more promises of newsroom transformation.

According to Poynter’s Rick Edmonds’ well-detailed piece, “the company is launching big plans to get its editors and reporters pivoting to digital.” Yes, pivoting to digital in 2018, at a company that as Tribune had been an early digital innovator and that was renamed Tronc — short for Tribune Online Content — by Ferro two years ago.

Tronc’s strategy, of course, has been a moving target since Ferro took over the company, with a series of transformations promised and under-delivered. Instead, the company has been much more about deal-making in its short history. Just this month, Tronc lost its bid to buy the Austin American-Statesman (as did with Hearst) to GateHouse Media. Now, as I’ve reported that GateHouse will likely be the winner of the Palm Beach Post auction as well, Tronc is probably looking at another failed buy. It’s in the market for more digital properties as well, as I reported in February, including talks with The Street.

(Last year, the Department of Justice thwarted its efforts to buy the Orange County Register and the Chicago Sun-Times. Tronc has been successful in buying the New York Daily News and a majority interest in the BestReviews shopping comparison site. )

Why are those losses significant?

When Patrick Soon-Shiong formally takes over as owner of the L.A. Times and San Diego Union-Tribune, a deal that is now likely to close before the end of the month, Tronc becomes a much smaller company. By various metrics, it will lose as much as half of its size. And to Ferro — who has talked about building a big national network — size matters. Tronc has long touted its march toward a national digital audience of 100 million; selling the Times puts it farther from that goal.

Secondly, the company finds itself confronted by “trapped overhead” costs.

Chains like Tronc routinely allocate the cost of corporate management to their properties. These headquarters costs — from top executive compensation to HR, finance, and other increasingly centralized functions — form a significant outlay for companies like Tronc with struggling financials. As the California newspapers disappear from Tronc’s books, so do their substantial payments to the mothership, their “allocated expense.” Now, Tronc needs more newspapers (or other properties) to help make up those lost payments.

Takeaway: For a company that is used to shooting from the hip, Tronc seems unusually tight-lipped. Maybe Ferro will pull another rabbit out of his hat — or maybe the market is turning on him.

Did Alden cook the books?

That’s the allegation now moving into Delaware’s Chancery Court. This week, Solus Alternative Asset Management LP accused Alden Global Capital — the increasingly maligned majority owner of Digital First Media — of “possible mismanagement and breaches of fiduciary duty.” The big charge: Alden took profits from DFM properties and moved them into “poorly-performing investments.”

Solus asks for access to the books of Media News Group Enterprises Inc., the company through which Alden controls dozens of newspaper properties, including the Mercury News, The Denver Post, the St. Paul Pioneer Press, and Southern California News Group, all of which have been hit with major newsroom cutbacks as recently as this year. In fact, word is now out that The Denver Post, which saw its publisher suddenly resign in January, apparently over plans for further reductions, may soon be making another major newsroom cut, further decimating a newsroom of fewer than 100.

Already, the suit alone has revealed new information about Alden and DFM operations. We’ve learned that Alden controls the company with 50.1 percent of its shares, while Solus holds 24 percent.

A court battle may well reveal more about Alden’s DFM management, recently excoriated in The Nation and in the American Prospect. Even LexisNexis’s Law360, which first reported the lawsuit, describes Alden as a “much-maligned ‘vulture fund.'”

Alden’s “milking” of its newspaper properties has been apparent for years. What the lawsuit may reveal is what’s happened to the 20 percent-plus margin profits that Alden continues to methodically wring out of distressed newspapers.

The 24-page lawsuit:

• alleges “mismanagement”;
• accuses the MNG board of being beholden to Alden, “four of whom are directly or indirectly connected with Alden”;
• points to “a series of insider transactions”; and
• argues that Alden launched a new subsidiary (InvestmentCO in 2016), and that “those investments may involve transactions with Alden that are entirely unrelated to the Company’s core businesses, may disproportionately favor Alden, or may entail Alden and its hedge fund affiliates using InvestmentCO to monetize illiquid or losing positions. The extent to which InvestmentCO’s activities overlap with those of Alden and its affiliates has been purposefully obfuscated.”

In more detail, the suit alleges self-dealing by Heath Freeman, president and co-owner of Alden.

Takeaway: On the surface, of course, this appears to be an obtuse battle between two investors whose company has pursued the most aggressive, and sometimes mean-spirited, evisceration of some once-proud newspapers. They’ve done damage to the papers, but more importantly to their communities and readers. DFM’s business activities have seemed like a legal looting of the public trust. It may be as likely that these two parties will settle their profiteering differences out of the public eye. As one seasoned private equity investor cautions: “Most times, it’s wrath and fury signaling nothing, but every once in a while there is actually self-dealing or fraud of some sort.” For the moment, the lawsuit provides unusual visibility into the nest of secretive vultures.

Has NewsGuard pulled the right anti-fake news lever?

The latest Steve Brill/Gordon Crovitz startup (which I described in detail last fall) takes an easy-to-understand traffic light approach to combatting the scourge of fake news. Its promised green/yellow/red signals seem like they should be brain-dead simple for even the least brand-aware of news readers to discern fact from fiction.

Now the dynamic Internet duo (who built and sold — twice — their Press+ paywall tech company) have secured the $6 million in funding they wanted. Most notable about the announcemen is the lead funder: Paris-based Publicis Groupe, one of the biggest ad buyers in the world.

Why did Publicis participate? In two words, brand safety. Digital advertisers have grown increasingly leery of finding their brands alongside hateful, deceitful, and incendiary material. A NewsGuard-like system could help ad placers stay away from the dark sides of the web.

But consider one other possible scenario. What if ad-serving platforms — including those of Google and Facebook — incorporated such signaling into their own tech? They could offer brand-safety assurance — and maybe even add a tiny surcharge for it. Of course, such a signaling might also cut off their ad serving business on the no-goodnik “red sites” — but they’re saying they want to be good citizens, right?

“Publicis is a dream lead investor,” Brill says, but keep that thought of platform use in mind as NewsGuard aims to get traction and launch later this year. The startup, of course, craves that standard of digital success: ubiquity. The first step in that is getting a major platform to adopt its rating system, and apply it. That would mean Facebook deploying it on its publisher content and Google on its publisher search and mobile presentation offerings.

That’s the big win: getting both of them to adopt. Unless at least one of those two do, though, it may well fail in its anti-fake news mission. Might Microsoft’s Bing, or Twitter, or LinkedIn, or YouTube be a first adopter? Would it be enough?

With its funding announcement, NewsGuard also announced that the versatile Jim Warren, who just finished a good run with a daily Poynter news industry column, will head the presumably green eye-shaded digital news checking crew. That group could grow to 50, as NewsGuard aims to signalize and write a “nutrition-label” is-this-site trustworthy précis on the top 7,500 or so news sites in the U.S. Eric Effron, last at Reuters, will serve as managing editor.

The redoubtable Warren and artificial intelligence? NewsGuard should be interesting to watch.

Takeaway: NewsGuard could be a simple, elegant solution to both the honest hand-wringing and the overwrought blather about fake news. But we still have to ask the question that NewsGuard won’t answer until it has to: What color is Fox News? Wait for the next NewsGuard announcement. Can it get either Facebook or Google to sign on, or work its way upwards with a next-level player?

How grows the millennial market?

Two local-news companies have focused on the large millennial populations in urban centers. Now, with several years under their collective belts, we can report some intriguing numbers.

By far, their number one source of revenue: sponsorship.

“Advertising with Facebook and Google is effective and they’ll continue to gobble up the majority of local advertising dollars,” Ted Williams, who started up Charlotte Agenda three years ago, told me this week. “We don’t sell against them — that’s dumb. We specifically target clients that understand digital brand advertising and want to reach the next generation of Charlotte. This means turning away potential revenue from clients only focused on lead generation or maximizing low-cost impressions.”

Williams says Charlotte Agenda pulled in $856,000 in sponsorship revenue in 2017, generating 65 percent of its $1.3 million in revenue. That’s up about 55 percent over 2016, says Williams, who says the Agenda, with “6 FTEs, 2 PTEs, and about 5 core freelancers,” is profitable.

Meanwhile, 21-person-strong Spirited Media — Jim Brady’s three-city (Philadelphia, Pittsburgh, and Denver) operation — takes in 75 percent of its revenue from a combination of sponsorship and events. Unlike Charlotte Agenda — which focuses on site, social, and newsletter sponsorship — Spirited’s sites still focus on events. (The span of Lab coverage of Spirited here.)

Brady acknowledges a rough patch in 2017, which included layoffs, but says the last four months have restarted the revenue engines, as his sites have better learned how to pull in sponsors. Further, the sites now actively pursue membership — and have connected a newsletter strategy to that conversion well. After revving up that initiative, Brady says, “we’re at just under 600 after five weeks in Denver, three in Pittsburgh, and two in Philly.” Spirited is also beginning to license its self-developed platform, which it calls Bridge, and consult for other startups.

Brady spoke candidly to last week’s Megaconference in San Diego, sharing the travails of a four-year-old startup. One slide sums up a lot of learning, below.

Down the Y-axis are Spirited’s revenue categories, all in some stage of development. On the X-axis, he’s arranged four factors that he’s learned drive — or don’t drive — revenue lines. There’s a lot in this one chart for rising entrepreneurs and those who follow them.

Takeaway: Small can be beautiful. These lively sites, staffed by young journalists, do attract readers, and increasingly loyal ones. Using newsletters and Instagram, they can find audiences that are under-served by existing local media.

Will Advance join the paywall pack?

Rumors have swept across Advance Publications country, from Portland to Syracuse and in between, of Advance “going paywall.” The Newhouse family’s company made big news six years ago when it chose to throw itself headlong into the digital world, cutting print frequency back to three or four days a week in big and medium-sized cities.

Over the years, it’s stuck to its strategy and that’s brought in little digital reader revenue, other than from e-editions. As digital ad sales have gotten tougher, observers, including me, have suggested that Advance’s strategy and its forsaking of reader revenue was poorly timed.

So is Advance going paywall?

I asked Randy Siegel, CEO of Advance Local. The answer: sort of, slowly, maybe.

“Advance Local is researching a number of options for digital subscription revenue, including recent tests with paid newsletters and high school sports,” he told me. “Due to our success in building highly engaged local audiences, and in light of the evolution in consumer behavior toward paying for high-value digital offerings, we believe now is the right time to explore options to diversify our revenues with various paid digital content strategies.

“We expect this work to take several months of discovery as we leverage learnings from our own experiments and from industry peers. If we decide to test anything, it will be a dynamic meter in a single market but a final decision won’t be made until much later this year.”

Takeaway: Expect a test, and one using the new “dynamic” meters now increasingly embraced by everyone from The Wall Street Journal to smaller titles testing with Piano Media and Mather Consulting. Given recent layoffs at Advance’s Oregonian and buyouts now in process at several other Advance properties, the need for digital reader revenue seems fundamental to any daily newspaper’s business model.

Is the daily newspaper’s sports franchise dying?

The Athletic has turned a lot of heads over the past year. This week came another $20 million in announced venture funding, further indication that it’s going to be a big, serious enterprise — and one aimed competitively at metro newspapers’ sports pages.

Evolution Media, TPG Growth, and Creative Artists Agency have led 18 investors in pouring $30 million in total into CEO Alex Mather’s operation, the no-ad, subscription site (currently $48 a year), plans on expanding to 45 markets across North America from 23. It may double (or more) its staff of 120. The company says it has signed up 25,000 subscribers and attained profitability in a couple of its cities.

There’s lots more to be written about The Athletic and its model, but for now, its innovation tells us so much in what is a bleak time for the journalism business overall.

As a subscriber and analyst, what I find about The Athletic is how unremarkable its model is: Find top reporting and writing talent, pay them fairly, and give them the freedom to communicate with their readers directly, writing short or long.

The Athletic has poached many top talents from metros — and has benefited as national outlets like ESPN and Sports Illustrated have laid off staff. That’s good luck for The Athletic. But its good fortune it’s earned in a simple well-executed product that relies on old-fashioned — but contemporary and deep — journalism.

Takeaway: Jessica Lessin’s The Information has become a darling of new paywall thinking, and it deserves kudos. Yet, The Athletic’s act — with an easily affordable subscription — reminds us that the digital reader revenue game, for the masses, is still in its infancy.

Is consolidation in the cross-Atlantic air?

The story of German media giant Axel Springer’s big U.S. push, and the principles behind it, has been well told. Its big move came in late 2015 when it paid about as much for Business Insider as Patrick Soon-Shiong is paying for the L.A.Times, half a billion dollars. Then, two years ago, it bought eMarketer. In total, it’s made about 19 U.S. investments, including Tony Haile’s emerging Scroll, Ben Lerer’s Group Nine, Mic, and Ozy.

Now, Jens Mueffelmann, the CEO of Axel Springer Digital Ventures & President Axel Springer USA, is leaving the company. Mueffelmann, a well-known face in the venture trade, will stay in the U.S. and pursue venture work on his own.

Takeaway: Consider the news just one more sign of consolidation. Even the biggest companies now circle their companies around their largest investments — BI and eMarketer, in Springer’s case — with the case for new newsy startups harder and harder to justify.

As print subscriptions have plummeted, digital subscriptions have slowly emerged. It’s really a six-year-old phenomenon, as daily publishers followed The New York Times’ 2011 lead with paywalls, and digital subscriptions are still, at best, a work in progress.

Today, they offer a tale of two worlds. The national/globals — The New York Times, The Wall Street Journal, The Washington Post, and the Financial Times — build their new and increasingly digital businesses on digital subscriptions, greatly aided this year by the Trump bump. But regional dailies, both in North America and in Europe, continue to struggle with them.

One ratio highlights the gap. While The New York Times today has twice as many digital-only subscribers as Sunday print subscribers (and three times as many as daily print), most newspapers’ subscriber totals still tilt heavily to slowly dying print. In fact, 90-plus percent of all subscriptions to regional dailies remain to print products, less than 10 percent to digital.

That disparity explains the economic divide we see between the still-transforming-but-smiling national-global press and the local newspapers worrying about their very existence after absorbing double-digit decline after decline in revenue. Reader revenue is working to transform the big press, but largely leaving the local press behind.

All publishers see the similar math. At most, 1 or 2 percent of those mammoth monthly-unique audience numbers they report will actually pay for a digital subscription. (Yes, the actual number of humans is probably a little more than twice as high, in the 3 to 4 percent range, since so many readers use two or more devices — desktop and mobile, for instance — to access news sites. For consistency, though, we’ll go with those numbers of 1 to 2 percent.)

Those numbers are still okay if you’re The New York Times with a U.S. monthly audience of 97 million, according to comScore data for August, or The Washington Post with 92 million. If, though, you’re The Baltimore Sun, The Sacramento Bee, or the Arizona Republic — with audiences one-fifth to one-twentieth that size — the math’s a lot harder.

That’s why we see that huge disparity in digital subscriber counts. The Times has surpassed 2 million paid digital subscribers, while the Post is now over 1 million.

Meanwhile, among the regionals, the Los Angeles Times now ranks first, as I reported Friday, with 105,000. Then, The Boston Globe follows with 90,000, while the Chicago Tribune and Star Tribune can count about 50,000. That’s the high end; for most of the local press, the numbers are far, far lower. Which leads to this question: If daily newspapers can’t successfully compete with Google and Facebook for ad dollars and reader revenue is stalled, what’s their future?

When they look at that anemic digital subscriber growth, they ask the old Peggy Lee question: Is that all there is?

While we can hear strains of that heartbreaking song, we can also hear a new background hum. It’s the hum of new reader revenue strategies.

Today, a few eager entrepreneurs are readying launches. Some of the activity has been fairly public, but there’s lots more going on behind the scenes. Let’s preview what’s coming.

The new entrants

Among those new players, consider Tony Haile. The Chartbeat founder is making a simple proposition with his new startup Scroll: Give me $5 a month and I’ll turn off all the ads on a lot of premium news sites.

Haile believes that that pitch (and that price point) he can tap a market far larger than that 1 or 2 percent. He’s planning for growth up to 2 million users. Haile describes his model, and the thinking under it, in an extended Q&A here.

Scroll will launch in beta early next year. Its value proposition might be easily understood by readers, or it may stumble. Haile emphatically notes that he’s not offering “all-access” to top news sites. In fact, whatever paywall limits those sites put on visitors — now often down to 2 to 5 free articles per month — stay in place.

Rather, when Scroll customers reach these “premium” sites, their pages will be ad-free. The sites will recognize Scroll customers and remove ads from the pages they visit, whether that’s a couple or an infinite number in the case of say a free site like HuffPost or CNN.

What do publishers get for giving up ad dollars on those pages? They share in a revenue share pool. Of each $5 monthly payment, Haile says $3.50 will go into the pool. Publishers will divvy up the money based on the amount of time spent on their content by Scroll subscribers.

Haile believes he’s cracked an old nut of cross-title sales, and I hear a fair amount of preliminary enthusiasm for Scroll. Last week, Haile told me he is adding one contracted publisher per week. The names in his pipeline aren’t yet public, but they’re impressive. So is the money — admittedly small bets — that is funding him: News Corp, The New York Times, and European powerhouse Axel Springer have led the $3 million funding. Joining them are Founder Collective, SoftTech, and O’Reilly AlphaTech Ventures.

While Haile’s basic rev-share promise appears to be its major value proposition for publishers, I believe it may end up being as compelling as an on-ramp to subscription sales. There should be no better would-be convert to a $200 a year annual digital subscription than someone already paying something for news.

Speaking of on-ramps, consider LaterPay. The German-founded venture recently exxpanded in the U.S. LaterPay acts on the premise that readers need to sample news content.

Like Scroll, and unlike Blendle — which many in the industry compare it to — LaterPay enables publishers to offer a new paid alternative on their own sites. It doesn’t require learning a new app to use or a new discovery pattern to access news content.

Its premise seems simple enough. Publishers decide how to price individual articles — often in the 39-cent range — allowing readers a cheap taste of premium news content. Then, it doesn’t charge their credit card until they’ve consumed 10 articles. (Hence, LaterPay.) It’s a gimmick — a psychological scheme to break through a barrier to customer payment. Readers can also buy time-based passes, for a week or a month.

That’s a potential small revenue stream for publishers, and it offers — like Scroll — the promise of on-boarding new potential full-freight subscribers.

LaterPay founder and CEO Cosmin Ene has thoroughly thought through the minefield of reader payment.

For those who like to pitch an “iTunes for news” metaphor, he says, “most ones who talk the talk, don’t walk the walk. Walking the walk requires you to unbundle content and sell it in individual pieces, as well as in re-bundled form and in subscription form. After all, iTunes didn’t become known for selling the entire album, but rather for unbundling it and offering your favorite songs piece by piece. iTunes was the first truly user-centric model of the digital economy. By unbundling music, iTunes created a huge consumer appetite and created confidence in subscription models. Without unbundling, we wouldn’t have Spotify and Netflix today.”

Rather than that binary world of pay/don’t pay, Ene, like Haile, indeed believes that’s not all there is: “Walking the walk would require a diversified approach to monetizing content, allowing individual sales and time-based models and not just trying to push towards subscriptions only. There is a whole universe living between ads and subscriptions.”

Ah, that great potential in-between. CEO Cosmin Ene makes a great case for his product, and he’s now out pitching it to U.S. publishers.

He can point to some success in Germany, with a regional daily and with Der Spiegel, the highly respected German weekly. In a limited test, Spiegel both sold an increasing number of articles and grew revenue via LaterPay. But Spiegel doesn’t have a digital paywall, enmeshed in its own strategic complexity, so its test doesn’t tell us everything.

And what of Blendle? With much fanfare (and financial backing from The New York Times and Axel Springer), Blendle announced in December 2015 that it would attempt to transplant its model from the Netherlands to the U.S. That expansion has remained in beta, with the company now pivoting to a Blendle Premium in the Netherlands. “We are indeed still working on achieving product market fit,” CEO Alexander Klöpping told me last week. Klöpping also convinced Nikkei, parent of the Financial Times, to invest new money in the company this spring.

Blendle’s attractive interface won plaudits — and it’s seemed to work in its native country with relatively few major news sources, though with some hiccups — but the U.S. has proved tougher to figure out. Blendle has offered a pay-per-article approach and built its initial plans around being another node of news discovery.

The big point that Haile and Ene, among others in the would-be pay trades, point to: Will consumers want to go to a new branded site to get the branded news they expect from well-known providers?

That’s just the top of the entrepreneurs aiming to create new markets of paying but less than super-fan subscribers. Expect more ferment in this field in the year to come.

Facebook subscriptions

Then there’s Facebook, the platform that’s eaten the world, and made it part of many a news industry — and national political — conversation.

No one’s got any doubt that people read a lot of news on Facebook. Publishers, though, remain deeply uncertain about how that reading does — or could — translate to new reader revenue. Over the past year, buffeted by the political winds of fake news, Facebook has worked more earnestly with publishers on “partnership.”

This week, as it prepares to add a subscription feature to Instant Articles, it’s meeting more headwinds from publishers than it expected. While it originally had touted a subscription feature as aimed at aiding the deeply struggling local/regional press, Facebook instead turned to national players. They’re hesitating to join, and that could end up torpedoing the profile, and P.R. benefit, of the initiative.

Yet, Facebook will get some traction — and testing. For Tronc, the third biggest U.S. daily publishers, it’s a third leg in a partnership.

“We were happy with the speed and the consumer experience,” Mark Campbell, Tronc’s senior vice president of consumer revenue, told me last week. “We’re happy with the ad revenue. And so, the third leg of the stool needs to be solved if we are to continue with Instant Articles and expand it to other properties. We’ve been testing Instant Articles in San Diego since April. And on those first two dimensions of ad revenue and consumer experience we’ve been very happy. We just need to shore up our subscription-driving ability, because we can’t enable a free experience ad infinitum.”

Tronc will deploy the next test at the Los Angeles Times and The Baltimore Sun.

Money is one thing; consumer data is another. While Facebook has shown movement on that question, publishers much want a sharing of article consumption habit. Many readers actively consume news on both publishers’ sites and Facebook. How, publishers ask, can they see these customers’ behavior across platforms?

Niches

When I’ve explored potential “Paywalls 2.0” approaches in the past — another spin on getting beyond the 2 percent number — I focused on The New York Times’ digital niche tests.

That testing has been slower than the Times has liked — and it’s being rejiggered again, as the Times completes both top executive and mid-management shuffles.

Of all the forays it has it tried — the late NYT Now and NYT Opinion most prominently — it’s simple old crosswords that have found small traction. The Times now takes in about $3 million a quarter on crossword subscriptions, of which it can count 300,000 subscribers. That’s nice change, and proves out a niche point, but again, is that all there is?

At mid-year, the Times converted its highly useful and attractive free Cooking app to paid, but only for non-subscribers, at a rate of $5 for four weeks. It’s too early to know how successful Cooking may be in finding significant new revenue. In the wings are its tame-the-Platinum-Age-of-TV app Watching and something in health — if it can figure out what enough people will pay for.

Then there’s the launch of The Athletic — perhaps the dear departed National (what Grantland called “The Greatest Paper That Ever Died“) for the digital age.

We’ll plumb into it more deeply soon, but The Athletic smartly follows readers’ passion. Will enough find reason to subscribe among the welter of free sports news and information? Consider that voice and expertise — two factors that have proven out another Netherlands original, De Correspondent — may make the critical difference here. We can hope so, and will be watching.

Are they dreaming?

It’s easy to look that reader revenue landscape and say: No more than a tiny group of people will pay for news. But that sounds like an echo of “Nobody will pay for news,” and today that seems so 2009ish.

Who would have believed The New York Times’ digital numbers — and revolution? I doubt that even the Times executives who put it into place could expect the success they’ve found long after the initial McKinsey estimates.

Similarly, who would have believed that Netflix would evolve from a DVD sender to a global entertainment machine counting more than 100 million worldwide subscribers. Or that Amazon, Hulu, Spotify, and Pandora, among others, would get millions to pay for digital media.

In fact, we in and around the news industry know nothing (or close to it) about where this is all headed — or where it’s been. Consider that in the 1950s — the height of Miss Lee’s fame — household penetration of newspaper sales was more than 100 percent. That’s right — the average household took more than one paper, given the thriving popularity (and great editorial spirit) of afternoon papers arriving for the dinner hour, long after their staider morning competition had hit the doorstep.

More than one paying news subscription per household? That seems as unbelievable as the nadir of news subscription we now encounter. We’re clearly at a low point, with print circulation cratered and digital circ disappointing for the country’s 1,350 dailies. So, maybe there’s a new in-between — somewhere between that apex of “The Life Of Riley” 1955 and “Game of Thrones” 2017.

What’s the holdup?

Here’s the fascinating question: Why is seemingly so hard to get people to pay for news? It’s a tougher question that might first appear.

In the spate of answers offered up by those entrepreneurs and others in the news business, we see how many points of buying inflection — and what we might call dis-inflection — there are. Let’s briefly catalog them, some for future exploration:

• Pricing: Who’s right here? The Times with its couple-of-hundred dollar model, a model borrowed from print? Or Jeff Bezos, with the pricing philosophy he long ago espoused in Sun Valley to those who would become his newspaper-owning peers: Get ’em in the tent cheap, for less than a hundred bucks a year, and extract more value down the line? Or is it the under-$10-a-month crowd, Scroll included, who are borrowing from entertainment models?
• Sampling: The FT, the father of the metered movement, has come to believe that “trialing” is better than metering. The idea: Readers need at least 30 days to thoroughly sample a new paid product.
• Experience: Could it be that the news websites, so desperate for revenue to keep the doors open, have made the ad-interrupting experience so nasty that paying consumers avert their eyes and close their wallets?
• Ad-free: Eliminating ads — the core of Scroll’s pitch — may make sense. But, clearly, on such successful subscription sites as the Times, Journal and FT, readers don’t mind a tasteful ad presence much.
• Proximity: That’s the Facebook pitch. Fish where the fish are biting.
• Friction: There are simply too many steps to saying yes — especially on mobile. And lots of other frictions, too: UI, UX, and more.
• Currency: Civil is coming on as a blockchained, Ethereum-based news foray, while Hubii has already become the first Ethereum-based content company
• Content: Let’s not forget the basics. If a publisher can’t offer sufficient unduplicated, high-enough-quality content, nobody’s going to pay for it for very long. For regional papers that have halved their staffs (and their community knowledge), that’s a huge issue. And few talk about it.

That’s an impressive list. And within it, we see two things. First, how much we don’t yet know about the selling and buying of news products. And second, all the potential in the work being done to get better answers to those questions.

Starved for real consumer affection, news companies can only put another Peggy Lee standard, written by the Gershwins, on their playlists: “Somebody Loves Me.”

Somebody loves me, I wonder who
I wonder who she can be
Somebody needs me, I wish that I knew…

Somebody loves me, I just wonder who
Or maybe, maybe, maybe it’s you.

Excited to join The Athletic as its Chief Content Officer. Will have more details about my assignment in the coming days and weeks 1/5

— Paul Fichtenbaum (@Fichtenbaum_SI) July 24, 2017

And pumped to be conspiring again with former Sports Illustrated colleagues @slmandel and @SethDavisHoops on their college verticals 2/5

— Paul Fichtenbaum (@Fichtenbaum_SI) July 24, 2017

As well as the many talented journalists already producing premium local content in Chicago, Toronto, Cleveland and Detroit 3/5

— Paul Fichtenbaum (@Fichtenbaum_SI) July 24, 2017

San Francisco and Philly are up next, then six more Canadian cities that will have a special focus on hockey 4/5

— Paul Fichtenbaum (@Fichtenbaum_SI) July 24, 2017

Fichtenbaum stepped down from Time Inc. in a June 2016 editorial shakeup and has been advising startups in the interim. He is one in a series of The Athletic’s recent editorial hires, from national college basketball and football to the Bay Area.

Bloomberg’s Joshua Brustein noted that The Athletic’s cofounders Alex Mather and Adam Hansmann are “following the well-worn entrepreneurs’ credo to zag when everyone else is zigging.” Instead of pivoting to video like MTV News, Fox Sports, and other news organizations have done, The Athletic is doubling down on well-written stories, taking advantage of recent layoffs by online sports news behemoths ESPN, Fox Sports, Sports Illustrated, Bleacher Report, and Yahoo Sports. Instead of treating sports like the cherry on top of a vegetable sundae in the traditional style of newspapers bundling local news content, they’re betting that people will pay more for just top-notch sports coverage. And instead of selling advertising — that’s right, it’s foregoing ads across its websites — The Athletic is relying on loyal subscribers.

The Athletic’s subscriber model allows us to focus entirely on high-quality written content. NO ads, NO auto-play videos, NO clickbait.

— Stewart Mandel (@slmandel) July 24, 2017

The company is profitable in only one of its four existing city-focused sites so far (Toronto, with over 10,000 subscribers) but has attracted attention from investors. The Athletic raised $5.4 million in a funding round that closed last week, in addition to $2.6 million in a winter 2017 funding round. It probably helps that the price tag for consumers isn’t outrageous — a subscription will cost you $5.99 per month or $39.99 a year. Plus, studies show that people are increasingly willing to pay for online content.

As my colleague Ricardo Bilton noted at The Athletic’s Chicago launch last May:

The Athletic’s target readers are the most diehard Chicago sports fans, people who are “used to the idea that if you pay for things, you get good things,” said Hansmann. He said that The Athletic will be able to build a “pretty big” business off of this small but dedicated audience.

The idea that that the site could succeed by intentionally avoiding the scale-for-scale’s-sake imperative gripping other publishers was born out of the founders’ experiences working at Strava, which creates software for people to track their workouts. Hansmann said that Strava “wasn’t trying to be everything to everyone” and, as a result, was better able to serve a specific, much smaller segment of runners and cyclers.

At The Athletic, serving a hardcore audience means not only just covering games and player movements, but doing so in a way that’s steeped in data and analytics. Access is also core to the approach: The Athletic regularly interviews players and front-office personnel, bringing an air of exclusivity to the site’s content. The site’s four full-time writers and five freelancers publish five to eight stories per day. …

“It’s very easy today to be click-driven and produce articles that don’t have a lot of substance or depth and don’t cost that much to produce,” Hansmann said. “But that dynamic is disappointing for fans who want higher-quality content. We’re not about trying to be the next ESPN or something, but finding the segment of fans that care deeply about their teams and serving them with something that’s high-quality.”

That was part of the calculus for the Chicago launch of The Athletic, a subscription sports site that charges $10 a month (or $60 a year) for access to premium news and analysis. And, indeed, Chicago has been a good place for sports fans lately: The Cubs finished the 2015 seasons with the third-best record in the Major Leagues, and currently top the National League standings with a 29-13 record, as of this writing. The White Sox, too, are at the top of the standings, and while the Blackhawks lost in the first round of the playoffs this year, they’ve won three Stanley Cups since 2010 — including last year. It’s a good time to be a Chicago sports fan.

“We wanted to avoid a scenario in which we went into a market with a great idea and were executing well, but the teams were crappy and people just weren’t as interested,” said co-founder Adam Hansmann, who launched the company with CEO Alex Mather earlier this year. “We didn’t want that false start.”

The Athletic’s target readers are the most diehard Chicago sports fans, people who are “used to the idea that if you pay for things, you get good things,” said Hansmann. He said that The Athletic will be able to build a “pretty big” business off of this small but dedicated audience.

The idea that that the site could succeed by intentionally avoiding the scale-for-scale’s-sake imperative gripping other publishers was born out of the founders’ experiences working at Strava, which creates software for people to track their workouts. Hansmann said that Strava “wasn’t trying to be everything to everyone” and, as a result, was better able to serve a specific, much smaller segment of runners and cyclers.

At The Athletic, serving a hardcore audience means not only just covering games and player movements, but doing so in a way that’s steeped in data and analytics. Access is also core to the approach: The Athletic regularly interviews players and front-office personnel, bringing an air of exclusivity to the site’s content. The site’s four full-time writers and five freelancers publish five to eight stories per day.

“We want to make sure we’re putting numbers behind the opinions,” said Jon Greenberg, The Athletic’s editor and lead columnist. “If you want to stand out and want people to pay for your stuff, you have to give them a different kind of coverage.”

Greenberg, who spent seven years as a Chicago-based ESPN columnist, said he was initially skeptical when The Athletic’s founders approached him with the idea of helping to run a subscription-based site. After all, there are many reasons why a subscription sports site wouldn’t work. Sports is a hyper-competitive space on the Web, with no shortage of big and small publishers churning out free content. That’s hard for any site to fight against, particularly one that locks its content behind a paywall.

But while it’s hard to compete with free, it’s far from impossible. The Athletic’s strategy may draw obvious comparisons to recent paywalled efforts such as the Information, but the model actually most closely resembles DK Pittsburgh Sports, the two-year-old sports site created by Pittsburgh sports media veteran Dejan Kovacevic. DK Pittsburgh Sports, which charges $24 for an annual subscription, attracted 14,000 subscribers in its first year.

It’s too early to say whether The Athletic will rise to similar heights, but Hansmann said that the base is “growing very well” so far (he wouldn’t share specific numbers). While the site has raised a small amount of outside money from Precursor Ventures and several angel investors, and plans to raise more down the line, the team so far doesn’t feel the pressure to scale its readership quickly, as many venture capital–backed media business do. The site plans to test and build the formula in Chicago before expanding it to other cities.

“It’s very easy today to be click-driven and produce articles that don’t have a lot of substance or depth and don’t cost that much to produce,” Hansmann said. “But that dynamic is disappointing for fans who want higher-quality content. We’re not about trying to be the next ESPN or something, but finding the segment of fans that care deeply about their teams and serving them with something that’s high-quality.”