One year later, as a wave of other journalism stars, including former New York Times blogger Nate Silver and former Guardian writer Glenn Greenwald, prepare to follow Sullivan’s digital path, the answer isn’t entirely clear.
As Sullivan has scrupulously reported on his Washington-based blog, the Dish, the going hasn’t been easy — and it figures to get even harder as he enters his second full year of operation. At the moment, subscription revenue, the Dish’s sole support, is running well behind last year’s pace.
Sullivan’s experience may offer a lesson: Starting a journalism-oriented business on the Web is one thing, but making it pay off is another.
To be sure, the British-born Sullivan, 50, established a somewhat quirky business model for his venture. He declared early on that he wouldn’t take advertising and would be supported only by his readers via subscriptions. He also made it easy for nonsubscribers to view his fast-moving stream of content — collected musing on politics, pop culture and sundry other topics — without encountering a paywall. In effect, Sullivan established a “tip jar” format, with readers volunteering to pay him $19.95 a year. (Newspapers and other publishers are instituting mandatory paywalls to force readers to buy subscriptions.)
The results have been mixed. In his first year of operation, Sullivan reports, the Dish sold 34,000 subscriptions and generated more than $875,000 in revenue, just shy of the $900,000 goal he’d set for last year.
That left no room for a profit, particularly since the Dish’s masthead lists 10 employees, in addition to its founder. Sullivan, who declined several requests for an interview, hasn’t taken a salary since the site began.
“The fact that he’s raised close to $1 million through subscription is quite a feat” and a testament to Sullivan’s star power, says Alan D. Mutter, a San Francisco-based media consultant and blogger. But Mutter is skeptical about relying solely on subscribers. As a general observation, he notes, “Most journalists think about their journalism and not about how to sell it. They think providence will reward them for good work. That’s not how it works in the real world.”
Soon, a new wave of would-be Sullivans will be testing that proposition.
The list includes Silver, the statistics whiz who formerly blogged for the New York Times and who is starting up a new digital venture backed by ESPN. Greenwald, the journalist-advocate who has broken stories about the National Security Agency, is readying a news and commentary site funded by billionaire eBay founder Pierre Omidyar. There’s also Walt Mossberg and Kara Swisher, who broke away from the Wall Street Journal to form a news site funded by NBC Universal. And this week, The Washington Post lost Ezra Klein, founder of its Wonkblog policy news and analysis site, who is leaving to run his own shop.
While each of these ventures will concentrate on different kinds of content, they’ll more or less be selling their founders’ vision and personality, much like Sullivan.
A handful of digital journalism entrepreneurs have found success in recent years by starting with small staffs, low overhead and a singular journalistic vision. If the editorial formula clicks, it can attract a vast audience with relatively little promotional expense. In addition to advertising, a successful site creates a brand name that can spin off a range of subsidiary businesses — conferences, webinars, personal appearances by its founders, merchandise sales and the like.
The earliest pioneer may have been Matt Drudge, a former convenience-store clerk from Takoma Park, Md., who turned a show-biz e-mail newsletter into a political news and commentary site in 1996. The Drudge Report quickly turned into one of the most popular and influential news aggregation sites on the Web.
In 2005, Arianna Huffington founded the Huffington Post on a shoestring budget and built a loyal following with a mix of left-leaning political news, provocative (and unpaid) commentaries and voluminous “aggregation” — links to the work of others. The site was bought by AOL Inc. in 2011 for $315 million.
Politico, founded by two former Washington Post journalists, succeeded through intense and sustained coverage of a single topic: national politics. So did Business Insider, edited by Henry Blodget, a former Wall Street research analyst who was barred from the business after fraud allegations in 2002. (Jeff Bezos, owner of The Washington Post, is an investor in Business Insider.)
Gawker, founded by another British expat, Nick Denton, has mixed salacious scoops and gossip about celebrities and media personalities; its parent company, Gawker Media, now oversees eight sites, including the feisty sports blog Deadspin and Gizmodo, a design and technology site.
Visionary journalists were also the driving force behind such leading sites as gossipers TMZ and PerezHilton.com, the show-biz news chronicler Deadline.com and TechCrunch, which focuses on information technology.
It’s not clear that Sullivan’s relatively slow start as his own boss says much about the prospects for others who want to do the same, says Rick Edmonds, the media-business analyst for the Poynter Institute, a journalism education organization. Greenwald, Silver, Mossberg and the others, he notes, have deep-pocketed backers who can afford to sustain years of losses and experimentation. Their ventures also appear likely to be more diversified, both in content and in their revenue streams, than Sullivan’s is now, he said.
In fact, Sullivan, a frequent CNN commentator and former editor of the New Republic, has noted that he could be headed for some choppy water.
Since Jan. 1, his site has raised $420,000 in subscription revenue, about $17,000 less that it generated in just its first week last year. More important, the number of people signing up for new subscriptions is “down considerably” compared with last year, he wrote, adding ominously, “We are emphatically not out of the woods yet.”
The real crunch will come over the next month or so when about 25,000 of the Dish’s subscribers will decide whether to renew for another year. Magazines typically lose some of their subscribers at each renewal, a process known as churn. And with the bulk of his subscribers all coming up for renewal at once, Sullivan is highly vulnerable to churn.
“We need many more [renewals] if this model is to succeed without sponsored content or venture capital,” he wrote Wednesday. “It’s just one model for journalism in new media, and many others make sense as well. But it’s the simplest, clearest and most transparent there is. . . . You can decide to endorse this model and help sustain a fledgling new era in journalism. Or you can be a by-stander.”
Sullivan’s cliffhanger aside, Poynter’s Edmonds says the “journalist as brand” is likely to continue. “It used to be that the stars wanted to be at The Washington Post and the New York Times,” he said. “Now, the notion seems to be that the stars come out of The Washington Post and the New York Times.”