Good morning,

Thanks so much for spending a part of your Saturday morning with us. For those of you who are new here, I’m Jon Kelly, the co-founder and editor-in-chief of Puck, our nearly four-month-old media business endeavoring to provide the unfettered, inside conversation at the nexus of Hollywood, Wall Street, Washington, and Silicon Valley. On behalf of our extraordinary team of elite, trailblazing journalists, thanks for your support. We hope that your 2022 is off to a great start.

It was another world-beating week at Puck—replete with Dylan Byers’ dish on the Ben Smith project; Tina Nguyen’s incredible, Orwellian epilogue to January 6 (and prologue to Mitch McConnell’s next crisis); Matt Belloni’s one-of-a-kind analysis on a confounding streaming crisis, plus so much more. Please enjoy some of our most electrifying journalism of the week and stick around, below the fold, for the backstory.

HOLLYWOOD:

Matt Bellioni breaks down the Yellowstone streaming crisis.

WASHINGTON:

Tina Nguyen previews the G.O.P.’s post-Insurrection civil war.

And…

Peter Hamby explains Biden’s succession calculus.

WALL STREET:

Bill Cohan reveals the story that would have brought Geithner and Obama to their knees in ‘08.

SILICON VALLEY:

Teddy Schleifer reports on Bill & Melinda’s new politics.

MEDIA:

Dylan Byers has the latest dish on frenemies Jeff Zucker and Donald Trump.

PODCAST:

Get the real inside story from our elite team on The Powers that Be, our weekly show.

PODCAST

The Backstory: Ben Smith’s NewMediaCo

Last month, during the blessed pre-holiday-party moment before Omicron descended, I headed uptown from Puck’s cozy West Village office to grab coffee with Ben Smith, the former editor of Buzzfeed News and, at the time, the feared and revered media columnist for The New York Times. Ben and I have known each other, off and on, for years. Back when I founded The Hive, in 2016, I sought his advice while he was the steward of Buzzfeed’s colossal journalistic ambitions. At the time, he had become the industry’s favorite digital media pin-up—a charming former byline beast equally comfortable in a reporting bullpen or a Central Park West parlor. Ben once described his upbringing to me as “that kid from Metropolitan,” the Whit Stillman classic about a Manhattan prep school outsider. I’ll admit that I’d used that line once or twice to describe my own sociological bildungsroman. A friendship was born. 

In the years since, we’ve become off-and-on, coffee and gossip pals. I was elated when I learned that he’d taken the job as the Times’ media reporter back in pre-Covid 2020 for a number of reasons. First, it was obvious that he’d restore the cynical good cheer and harumph to the column. Second, it was clear that Buzzfeed was losing altitude from its original, Herculean ambitions, and his creative talents would have been wasted in managing the decline. I also assumed that, unlike the late and great David Carr, Ben didn’t have the temperament to reign in that throne for the rest of his days. Anyone who has spent any time with the guy knows he is a restless, entrepreneurial spirit, an underdog-sider, an irrepressible post-institutionalist.

I had no agenda for our coffee date other than to catch up, trade observations, exchange a little dish, and wish him well for the holidays. The chat ended up being shorter than planned—I’d gone to the Sant Ambroeus on 61st, where the LionTree executives hang out; he’d headed to the one on Madison, where the real socialites roamed—and we both had things to attend afterwards.  Even truncated, however, the conversation was enjoyable, convivial, hilarious, fun—and, of course, off the record. 

All I will recount here is that some chattering media people, who always speculate on the careers of others, had been in a state of near-constant heat regarding whether Ben was loose in the saddle at the Times. I suggested as much, and told him that his professional moves, or lack thereof, had become a favorite parlour game for a flank of the industry. In return, he offered me nothing but a faint, bemused smile.

So when I saw the news come across Twitter, on Tuesday, that Ben was joining outgoing Bloomberg Media C.E.O. Justin Smith to create a wildly ambitious (and yet still largely amorphous) new media entity, I was at least partially surprised. But I was also elated. As I’ve noted in the past, after a long somnolence, our industry is changing fast, perhaps faster than it has in generations, at least since the early 2000s when companies like Buzzfeed were born. 

News media has entered the next stage of a very, very important evolution. In my mind, our industry is following the previous transformative arc of the music business, from Napster to Spotify, and we’ve just crossed the Pandora threshold. There are a number of obvious factors at work, and you know them all by now: 1) new business models, built around subscription economics, are transforming the ecosystem premised on superscale; 2) journalists, themselves, have become influencers, and their value is currently underpriced in the market; 3) those journalists have direct connections with their audiences, who yearn for that authentic touchpoint, often devoid of an old school or inauthentic Mt. Olympus-like brand filter. The term “newsletter,” as we all know from our personal experiences, has become an obscure catch-all that one might more accurately translate as: an email, on-demand delivery of a well-written, bullshit-free, thoughtful piece of journalism that you truly want to read because you actively signed up for it in the first place.

As a result, a cavalcade of new media businesses are invading the scene and replacing incumbents at an unparalleled clip. Based on Ben and Justin’s veiled comments, I first wondered if they were devising a nouveau Buzzfeed for a more mature, cosmopolitan audience. Or was it a modern International Herald Tribune? The more I thought about it, however, it was clear: they are after a Davos-inflected New York Times of the Western World—an alchemy of their past experiences with a little Hermès-ified, Economist-ish non-partisan pro-capitalist rigor. These types of entities used to exist, discretely, in the middle of the last century. Now this duo wants to come in, recreate them, and sit them atop a shared platform. I wish them tons of luck.

NEWSLETTERS

Will it work? That was the question everyone in media was asking hours after the news came out. I’m not an expert, I can’t predict the future, and you could argue that I’m a competitor (though I don’t look at it that way). But here’s my read. 

After I left The Hive, I spent a year and a half working with TPG, the private equity firm, analyzing the broader news media industry, which we divided into three categories. Category One, which included the Timeses or NPRs of the world, was the front-line of our news ecosystem—the first read that you needed to begin your day. Category Two, which you might think of as the “step back” reads or affinity driven media, coalesced around what had once been known as the magazine industry, among other content. And the third, or Category Three: well, that was everything from 60 Minutes to evening news to Vice on HBO to streaming content—high-gloss, production-intensive, filmic, expensive and long-lead. 

It was pretty clear from my market research that Category Three had endured at least mezzanine-level disruption, with more to come, which you might expect given the size of the streamers and the economics at stake. Category One, to me at least, also seemed like it was in a mature state of remodeling: The Times, Journal, Washington Post, and FT had pivoted to subscription and business-to-business models with great success. Many competitors had been vanquished in the process, and it seemed like the space was sorting itself out. (As proof, the Times just acquired The Athletic for $550 million on less than $60 million in annual revenue–a 10x multiple that portends the power of the lifetime value of a subscriber.) To me, at least, it seemed like the opportunity lay in the second category, which was filled with more talent than ever before and deeply in need of economic re-imagining and new models.

From what I gather, Ben and Justin’s new play is situated entirely in that first category. Beneath their platitudes, it promises to be large, global, expensive, and long-term. Will they be able to raise money sufficient to launch a large newsroom without sinking themselves in the process, creating foolish valuations that leave them in investor quicksand? I assume that they are aware of this challenge and will overcome it. Will they have the patience to invest in their own tech stack rather than overly rely on off-the-shelf options that give them a primitive view of their own data and opportunities? I think they’ll be okay there too. I’ve been in business meetings with Justin and marveled at his talent as a media operator. Will they have the gumption to go at it in full view of all their peers, competitors, well-wishers, and haters?  Resoundingly, I think they will.

The true reason that innovation came so late to journalism, in my view at least, boils down to culture and history. Newsrooms are, by their mission, error-free zones. Reporters live in fear of making mistakes. Editors tread cautiously. As fortunes waned, and layoffs loomed, managing up often eclipsed the need to think creatively. Journalism has historically emphasized a fear of failure. Entrepreneurism, of course, requires imperviousness to it. Or at least a fulsome embrace.

So will it work? Well, we’ll never know until they try. And here at Puck, where we take innovation in new models pretty seriously, we know that this NewMediaCo will succeed wildly if, for no other reason, it will tempt future executives and newsroom machers to take a risk and bet on themselves and show their old peers that there are other options and brighter futures. And we’ll all be the better for that.

Ben and I traded texts briefly after the news came out. And he asked me, I think earnestly, if I had any advice. I laughed it off, but I’ve been thinking about it in the days since, and here goes: I’d implore him and Justin to lean into an economic model that puts journalists’ economic interest—near and long-term—at the core of the business. If they do that, and I bet they will, they won’t have to worry about my market theories (as if they do, anyway!). They’re likely to be building something that the Times Company, FT, Axel Springer or someone else will envy, and maybe even love to buy one day.

Have a great day,

Jon

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