Digiday has a weekly podcast about the business of digital media, and two recent interviews with founders of startups had nuggets of wisdom applicable to any media startup.
Digiday's editor-in-chief, Brian Morissey, interviewed The Business of Fashion's Imran Amed about its move to a subscription model, and the founders of TheSkimm, Carly Zakin and Danielle Weisberg, about how they used email to build a loyal community.
Elements of their success formulas:
1. Passion for a topic that you can develop in a way that no one else is.
a) Amed, then a consultant for McKinsey &. Co., began writing a blog in 2007 that talked about fashion as a business. He felt that no one was exploring the meaning of the numbers behind the leading fashion businesses. Over time, he developed a loyal audience who began suggesting ways he could monetize that audience.
b) Zakin and Weisberg were both 25 years old and producers for NBC television news when they decided in 2012 to launch TheSkimm. They were frustrated at the time that none of their friends were seeing their best work. Their friends didn't watch TV news. So they started an email newsletter that aggregated what they thought was the most significant news that young professional women like themselves needed to know for their professional and personal lives.
2. Build community first. Opportunities for monetization will present themselves.
a) Amed told Morissey that he had been blogging about the fashion business for years in his spare time. It was only after six years, in 2013, that Business of Fashion launched their first commercial product: a careers platform in which brands could advertise themselves and their open positions to the publication's audience. This platform was financed with US$2.1 million from various investors. Amed described it as "a global platform to look for talent." It was new because it was truly international. Today they have 300 brands advertising, more than 1,500 jobs listed, and have handled 300,000 applications through the platform. The platform earned recognition from Fast Company as one of the 10 most innovative media companies.
b) At TheSkimm, they decided not to accept typical banner ads but only native advertising or sponsored content. Rather than accepting programmatic advertising through ad networks over which they had no control, they could promise their sponsors brand safety — assurance that their message would not appear next to racist, sexist, or other objectionable content.
3. Organic growth of a niche audience is more important than rapid growth of a mass audience.
Founders of both publications decided from the beginning to focus on narrow audience segments so that they could grow organically and ignore what many other publications were already doing.
a) At the Business of Fashion, Amed chose to exploit a neglected audience that was interested both in the creative side of fashion and how people were making money. The business people wanted to understand the creative people better, and the creatives wanted to find out how they could launch their own successful businesses.
According to SimilarWeb, the site has 1.8 million total visits per month, 4.27 pages per visit, and average visit time of 1:44. The total audience size is relatively small.
b) At TheSkimm, they decided to focus on professional women in the millennial generation, roughly 20 to 35, who lacked time but needed information in formats that fit with their daily routines. TheSkimm has grown to almost 7 million email subscribers, almost double the total in 2016.
TheSkimm's email newsletter aimed to give them the most important news they needed to know in order to appear knowledgeable about the topics that would be discussed among friends and colleagues.
They have 30,000 Skimm'bassadors who have each signed up 10 email subscribers. In other words, their loyal users are recruiting other loyal users.
4. Digital subscriptions work if you offer news and information unavailable anywhere else and in formats no one else is offering.
a) The Business of Fashion launched a subscription service in 2016 with a hybrid paywall. A user can read five articles a month free before subscribing. Some of the content is available only to subscribers and subscription is EUR216 (about US$265) per year.
While many publications expect to convert perhaps 3 or 4 percent of their total digital audience to paid subscribers, Amed told Digiday that their conversion rate has been well above 10 percent.
b) Advertising sponsorship accounts for 60 percent of revenue at TheSkimm, but they have also branched out into several other revenue areas. They now monetize events, offer a subscription app for that integrates professional and personal information for users for US$29.99 a year and have a daily podcast.
5. Growth opportunities
a) Business of Fashion now has a team of 75 working in New York, London and Shanghai. Amed sees a huge opportunity in the global reach of the publication. While the industry in each country typically has several publications that are domestically focused, he believes theirs is the first to recognize and capitalize on the globalization of fashion trends.
The company has launched an online school with videos of leading figures in the fashion industry on topics such as "The art and science of buying and merchandising."
b) TheSkimm recently raised US$12 million in an investment round led by Google Ventures, and now has raised a total of US$28 million from investors. They have 67 employees and a recent article in Fast Company suggested the best ways to get a job there.
TheSkimm's founders frequently talk about how their most important asset is the trust of their audience. Trust and credibility have economic value.
This post originally appeared on James Breiner's blog News Entrepreneurs and is republished on IJNet with permission. James Breiner is a former ICFJ Knight Fellow who launched and directed the Center for Digital Journalism at the University of Guadalajara. Visit his websites News Entrepreneurs and Periodismo Emprendedor en Iberoamérica.