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Buzzfeed & the Collapse of Democracy

Tien Tzuo
CEO, Zuora

Are media subscriptions bad for democracy? Buzzfeed CEO Jonah Peretti seems to think so. “If you are thinking about an electorate, the subscription model in media doesn’t support the broad public,” he said recently at the Wall Street Journal’s WSJ.D Live Conference in Laguna Beach.

Perretti anticipates a dystopian future in which only the monied elite (like, say, the kind of people who can afford to attend a digital media conference in Laguna Beach) has access to quality journalism, while the vast majority of the reading public is consigned to clickbait, quizzes and listicles.

This kind of upside-down logic makes my head spin. Subscriptions are killing democracy, but advertising is saving it? It’s exactly the opposite! Publishers that prioritize membership programs are incentivized to produce quality journalism that engages their readers, while publishers that depend on advertising are incentivized to crank out vapid content that generates clicks.

Peretti seems to be pining for the old days when none of the news sites had paywalls, but I think he’s engaging in some revisionist history here – the news has never been free. Take the New York Post, which is no one’s idea of a publication aimed at wealthy elites. As a kid in New York, I remember when the Post cost a quarter on weekdays and $1.25 on Sundays. If you do the math, that adds up to around $150 a year.

Back when newspapers had much more regional influence, there also used to be much stricter barriers between advertising and editorial. That system allowed editors to focus on news, not drivel, while the papers were flush with local advertisement dollars because there weren’t many other outlets. The old model was never about monetizing content, it was always about monetizing access. But those days are over.

In hindsight, it’s not surprising that most newspapers launched free news sites, because advertising was such a huge part of their business in the old world. It didn’t work out – Google, Amazon and Facebook swiped up over 60% of the market. But when the news sites eventually decided to offer subscriptions instead of giving away their work for free, guess what happened? Surprise, surprise – they discovered that people were willing to pay.

Why? Because they’ve always paid! News has never been free! We’ve helped dozens of media companies launch subscriptions over the last decade, and they’ve all been happily surprised at the willingness of their readers to support them.

Don’t just take it from me. According to the latest Reuters Report on Journalism, Media & Technology Trends, subscriptions remain the number one priority (79%) for commercial publishers in 2022, ahead of display advertising (73%) and native advertising (59%), events (40%) and funding from tech platforms (29%).

“Journalism is no longer being taken for granted,” says David Walmsley, Editor-in-Chief, Globe and Mail, Canada, “The industry is explaining itself better and money is flowing proportionately to economic growth.”

As a result of this membership-first strategy, mainstream journalism is on the rebound. Well over half of the Reuters report respondents (59%), which includes publishers from more than 50 countries, say that overall revenues have increased, with only 8% reporting that things had got worse. Overall, the majority of publishers (73%) say they are optimistic about the year ahead. Contrast that attitude with the recent public struggles of ad-based digital media ventures like Vice, Vox Media, Quartz and (yes) Buzzfeed.

So how do we help democracy by promoting an informed population? As it turns out, there are many ways of solving the “access” issue. In the old print days, some places would plaster the news on public walls. Today we’re seeing similar kinds of experiments in the digital market.

Buoyed by subscription revenue, many publications are expanding access with campaigns aimed at students, the elderly and the disadvantaged. The Daily Maverick in South Africa offers a ‘pay what you can afford’ membership and El Diario in Spain allows people to pay nothing at all. In Portugal, lottery funding has been used to fund 20,000 free digital news subscriptions for eight media outlets.

Closer to home, the New York Times gives discounted subscriptions to students, and we’re also seeing carriers like T-Mobile offer free internet to ten million households. The latter project is important because you can’t promote worthwhile journalism and educational material without giving more families access to reliable broadband. Nearly one in four households don’t have the Internet.

Here I’ll note that subscriptions provide the financial viability that allows all these publishers to expand access to their journalism. So honestly, where’s the real threat to democracy coming from? Subscription models that prioritize quality content, or advertising-based platforms that thrive on outrage and fake news? It’s no wonder that social media companies like Twitter and Instagram are experimenting with subscriptions. When is Facebook going to finally wake up?

Smart journalism starts with a strong and sustainable business model. The “get big and get bought” ad model espoused by companies like Vice and Buzzfeed is neither of those two things. The “build an avid membership base” model exemplified by companies like The Athletic and Politico, on the other hand, is paying dividends for both readers and journalists alike.

Subscription models treat readers like people, not products. You don’t need to take a quiz to figure that one out.

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