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Business Models of Digital Longform Publications

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Business Models of Digital Longform Publications BUSINESS MODELS OF DIGITAL LONGFORM PUBLICATIONS _______________________________________ A Thesis presented to the Faculty of the Graduate School at the University of Missouri-Columbia _______________________________________ In Partial Fulfillment of the Requirements for the Degree Master of Arts _______________________________________ by ALEKSANDR GORBACHEV Professor Randall Smith, Thesis Supervisor MAY 2016 © Copyright by Aleksandr Gorbachev 2016 All Rights Reserved The undersigned, appointed by the Dean of the Graduate School, have examined the thesis entitled BUSINESS MODELS OF DIGITAL LONGFORM PUBLICATIONS Presented by Aleksandr Gorbachev a candidate for the degree of Master of Arts, and hereby certify that in their opinion it is worthy of acceptance. ______________________________________ Professor Randall Smith ______________________________________ Professor Tim Vos ______________________________________ Professor Paige Williams ______________________________________ Professor Ton Stam ACKNOWLEDGEMENTS I would like to thank Randy Smith for serving as my academic advisor and then as my committee chair. Since my first month in the Missouri School of Journalism, you have been helping me to navigate in the exciting and complicated world of American graduate studies. Your advice both regarding my research and my studies helped tremendously. I would also like to thank each member of my committee. Paige Williams, your Advanced Writing class was my absolute favorite in the two years that I spent in Columbia; I learned a great deal and hope that this knowledge will ultimately help me bring the great tradition of American narrative journalism to Russia. Tim Vos, your methodological recommendations were always on point, and your guidance in the world of academic research (which I was quite unfamiliar with) was very important to me and my work. Ton Stam, I learned a lot from you about business, and I also hope to implement this knowledge further in my career; also, the Mail & Guardian team you led was great and a lot of fun. Speaking of people who will probably never read this, I would like to thank my wife, whose love and support is what got me through this whole invaluable educational and cultural experience; my family, who resolutely coped with me being far away for so much time; my American friends, who made me feel at home in unfamiliar place, and my Russian friends, who never let me forget that they want me back. ii TABLE OF CONTENTS ACKNOWLEDGEMENTS..................................................................................................... ii Abstract ..................................................................................................................................v I. Introduction ..................................................................................................................... 1 II. Literature Review ......................................................................................................... 4 Towards the definition of longform journalism ............................................................................. 4 Longform journalism in the historical perspective ....................................................................... 9 Business model: A definition ............................................................................................................... 10 Media business in the digital age ....................................................................................................... 11 Business models of digital journalistic publications ................................................................. 16 Longform journalism in the digital environment........................................................................ 20 The Rules of Competition in the Age of Disruption: Theoretical Framework ................. 23 III. Research Questions .................................................................................................. 26 IV. Methods and Analysis ............................................................................................... 27 Methodological Framework ................................................................................................................. 27 Participants ................................................................................................................................................. 27 Instruments................................................................................................................................................. 30 Analysis Procedures ................................................................................................................................ 32 Verification .................................................................................................................................................. 33 V. Analysis ........................................................................................................................... 35 A Grand Experiment In the Times of the Great Disruption: How the Business Models of Digital Longform Publications Are Developed ........................................................................ 37 “Why Don’t We Launch Something?”: Seeing the Market Opportunity ........................ 37 “I Just Do S**t That’s Really Good:” Formulating the Vision and Defining Core Competencies ........................................................................................................................................ 41 “We’re a Part of a Growing Ecosystem:” Thinking About the Audience and Identifying the Competition ............................................................................................................ 46 “Fundamentally It’s Not the Business:” How the Business Models of Digital Longform Publications Are Structured ................................................................................................................. 50 Revenue Streams: Advertising ....................................................................................................... 50 Revenue Streams: Individual Sales .............................................................................................. 52 Revenue Streams: Subscriptions .................................................................................................. 54 Revenue Streams: Donations ......................................................................................................... 58 Revenue Streams: Venture Capital............................................................................................... 60 Revenue Streams: Structural Partnerships .............................................................................. 61 Revenue Streams: Licensing and Publishing Partnerships ................................................ 63 Revenue Streams: Ancillary Rights Partnerships .................................................................. 65 Revenue Streams: Miscellaneous ................................................................................................. 66 Expenses: Staff ...................................................................................................................................... 68 Expenses: Content Production ....................................................................................................... 70 Expenses: Miscellaneous .................................................................................................................. 74 “How Does A Network Happen:” Marketing Strategies of Digital Longform Publications ................................................................................................................................................ 76 “No, no, no:” Editorial Decisions v. Business Considerations ................................................. 81 VI. Discussion ..................................................................................................................... 83 Disrupting the Media: Understanding the Phenomenon ......................................................... 83 Who Is the Competition? Established Rivals, New Entrants and Substitute Products 85 Where’s the Customer? Creating and Curating the Demand .................................................. 87 iii The Suppliers’ Dilemma: The Quantity of Good Writing .......................................................... 89 The Power and Weakness of New Entrants: Business Against Journalism ...................... 90 VII. Conclusion ................................................................................................................... 93 References .......................................................................................................................... 98 Appendix: Interview Transcripts ............................................................................ 105 Marc Herman, a founding member of Deca ................................................................................. 105 Ben Wolford, CEO & Editor-In-Chief of Latterly ........................................................................ 132 Michael Shapiro, founder of The Big Roundtable ....................................................................... 150 Evan Ratliff, CEO, editor and co-founder of The Atavist Magazine ..................................... 183 Mark Lotto, editor-in-chief of Matter and editorial lead of Medium ................................. 215 Joshuah Bearman, co-founder of Epic Magazine
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