 Hey, I'm Tracy Burns with the street here with us right now Ken doctor contributing columnist author of news Anomics and man, you're making some noise out there with the columns. You're writing lately Ken. Thanks for being here Hey, you're quite welcome. There's just a lot of news There's a lot of news and I suppose you could thank our president for a lot of it, right? So the president actually is helping our business in spades, isn't he? It is an amazing thing first right Actually in the run-off to the election, but right in the immediate aftermath I wrote a bunch about the Trump bump and the Trump bump was a real thing of subscriptions hitting Unpredictable levels at a number of publications and the question was how long that would last and now I've called it So see subscription surge because we've seen it we're into April already and Subscriptions are still up over what they were a year ago at about a half a dozen high quality national outlets It's amazing actually especially when you and I both know our business was dying The president in the midst of the election Hammered half of our fellow brethren out there, right destroyed them as fake news and now to your point We have the New York Times past three million subscriptions the New Yorker subscriptions up two hundred and thirty percent Versed same time three months ago. This is all based on your reporting. The Atlantic is up and now vanity fair. Why why what's happening? So it could be a Trump plan It could be make the American news media great again, but we don't know if it's that strategic What's really happened if you look at each of these companies that you just named They have had Successful paywalls meaning that they allow readers to sample usually six or ten articles a month but then they make people pay if they want to read regularly and they had developed successful businesses over the last two To five years and then having this business ready having the technology ready And there's a lot of technology and messaging and marketing smarts that go into it Trump comes along and paints the news media as the enemy and they have greatly benefited from it so it's important to see that that that there was a precedent for it that he helped goose the numbers up the numbers are still up But what I think is most important when I wrote about Vanity Fair joined the New Yorker at Condi Nast in the paywall parade is that these Publications almost uniformly are ones that have increased their national reporting and are seen as reality checks on Donald Trump and Readers all have just flocked to the these publications and said we need a reality check and Even in this era of fake news where we have there's practically the whole fake news industry at this point People say I trust this publication. I trust the New Yorker. I trust the Washington Post I trust the New York Times and the logical thing in the business world is when you trust something you pay for it But if what's interesting is most of the publications you mentioned lean left So interesting that people are trusting organizations that don't truly support the president Well, absolutely. We remember that there were there were more popular votes against Trump than there were for him And if you look at paywall economics, and this is something that people have a hard time with they had a hard time back when the New York Times Lost his paywall and announced it in 2010. I remember having interviews with reporters then as an analyst and I would say if they can get 3% of all of their digital audience in the United States to subscribe. They'll have a thriving Subscription business and they will have crossed over to the digital world. They are now at about two plus 5% so in this world and it's in its count it's kind of counterintuitive if you can get One two three percent of your digital audience to pay You can make a quite a business a lot as long of course as that national digital audience is big And that's why this is working for national publications like the New Yorker and the Washington Post and the Times and not working as well for local publications People should know that your article went up on April 17th about Vanity Fair and the other Publications so they should check it out. Okay, but let's play now devil's advocate here. What happens if people? Well, we get bored of it I mean, we're slowly getting bored of the daily tweets from the president, right? What happens if everyone loses its interest What happens to the subscription model then? well the subscription while Importantly for all the publications we've named was successful before Donald Trump got elected It has simply been goosed and goosed by a large number The the thing that we have learned and it's about five to eight years of learning now about how digital subscriptions work Is what do we do as consumers? We give our credit card over and it's on an auto renew and so the churn rate is Relatively low if a news medium continues a trusted relationship with its audience We've seen very low churn So that is the number to watch especially for all this these Trump bump subscribers over the next year Do we have a higher rate of churn and already we're seeing it slow down? But I would think that even if there's another major change at the top I don't think these numbers are gonna go down at all They may just slow, but then again, we have no idea what the next step of history is gonna be Right, and it seems like skies the limit with this administration So I suppose to your point subscription or churn rates might be lower than than people are hoping Let's talk remember that Mark Thompson the CEO of the New York Times He dropped into a conversation at the UBS conference in I think it was in November that his new goal is 10 million Subscribers they have 3 million now between print and digital. It's 10 million So we're just at the beginning of digital subscriptions And you think of this world and how it's changed from music subscriptions and movie subscriptions and TV subscriptions Among all the companies that are out there. This could be be the beginning of something But it's that trusted relationship between a news medium and the audience. Yes, you're absolutely right And I suppose You know God forbid there's an impeachment trial. That's not gonna hurt All right, let's talk about Univision because you now have a new piece going up on the site about Univision's purchase of Gawker Which happened back in August 135 million dollars. What was the rationale to begin with with that purchase? It was I thought it was an interesting story and it turned out to be a fascinating story As we know we have the whole Hulk Hogan mess and it was and we all covered it And then all of a sudden Gawker becomes toxic and the question is well Who would want to buy this thing has been in lawsuit and and what are the legal implications and what's going on here? It turned out that Univision and Zip Davis we think were the last two bidders for it Univision got it and I talked in depth with Univision executives about it and they said that they were interested in it because they thought It had some interesting aspects to it But the one jewel they found in it that they hadn't expected was the e-commerce So Nick Denton the founder of Gawker had gotten some press for his e-commerce because he had done a lot more of it than others and Gizmodo and their and their other five sites sell stuff and Well, we're hearing numbers like they're selling a lot of stuff and they're making a fair amount of profit And in fact that had helped turn the company around before the lawsuit Well, it turns out that Univision in doing its due diligence saw that the e-commerce was more than a quarter of the business of Gawker and that was a pretty profitable business and they really liked the look of it and Looking as everybody in the news publishing business is doing for alternative revenue streams They said this is really interesting Number one and number two we can scale this. We're Univision. We've got the number five broadcaster in the country We sell stuff on air. We don't sell anything online So this is an e-commerce story of the return of e-commerce in The publishing world and this was tried 10 and 15 years ago But now it's coming back and we're also seeing Buzzfeed box and the New York Times as well as business insider Makes them significant investments in e-commerce CEO of Gizmodo saying a third of his total revenue comes from e-commerce I so I I understand what you're saying. This is not new though, right affiliate business has been tried before It hasn't been successful for a lot of companies along the way. What's going to make this work for them? well, it's interesting they've got this slogan and It's part hype I think but it's part reality to it which is trust Truth Transaction three keys. So they have sites the sites they bought they they retired doctor Now where they never bought because it did not buy gocker.com. It bought it bought the others Jezebel and lifehacker and Gizmodo and the others And what they had what they knew is that a lot of these sites were a decade old or almost that and That they had really developed a trusty and trustee Readership and Using that trust those readers believe that the journalism they're seeing is truthful. It's the right take It's often it was often pretty casual, but it seemed to hold no prisoners So they they trusted it. They thought it was truthful and that made them more willing to trans act the I think the secret sauce of what What Univision was able to buy from the old gocker was how they created the deals They actually created deals. They have a separate staff Which is for editors separate from the news the newsroom who create offers and they will look for the best products They will disclose up at the top there that the sites are making money off it if you buy But they're saying these are the best and here's the deal and they're writing it in a way that is engaging to read So each site has maybe three or four offers a day Well, it is it is read unto itself and that all of these deals are aggregated at Kinja deals dot com So they're seeing really interesting sell-through. They're saying conversion rates once somebody actually gets to an offer page of As high as 16 percent, which is really high That's really high if you do a lot of volume if you have that big audience if they trust you you present the offers in the right way They have a money machine going now a lot of questions here Amazon is changing its affiliate rates overall consternation In that community, but it's not changing them yet for the big suppliers of commerce like like a Gizmodo or Univision. Well, I tell you this is a fabulous ongoing story that I know you are going to continue to coverage Cover Ken story will be up on our site soon. Check it out. Ken. You are wealth of knowledge Thank you for taking the time to be with us today