New Guys Looking to Dominate D.C. Political Scene

POLITICO Magazine’s Growing Voice in Digital and Print Journalism

By Clifford Michel

The news industry is increasingly beginning to shift to affluent readers who can afford to pay a premium price for high cultured or valuable reporting of extremely profitable industries. Leading the shift is POLITICO, a news organization solely focused on reporting every detail of Washington D.C.’s political scene. In 2010, the company announced the initial rollout of its “Pro Reader”. The response to POLITICO Pro has been incredible, “Members of Congress, industry executives, lobbyists, and hundreds of other Washington insiders have already signed up for POLITICO Pro,” the company announced. The company reports more intensely on subject matter such as Campaigns, Cybersecurity, Defense, and Education, than any other news organization in the country.

POLITICO’s reporting is particularly valuable to government officials, lobbyists, and special interest groups in the Washington political circuit. It’s the unique nature of POLITICO’s hyper focused reporting and affluent audience that allows the company to charge $2,500 to $10,000 a month for a subscription to its news service.

In comparison, the three largest broadsheet newspapers by circulation—the Wall Street Journal, New York Times, and Los Angeles Times—charge $33, $53, and $20 a month respectively for full service, which includes home delivery for print and full digital access.

POLITICO’s actions has had multiple benefits for the company: it commanded capital from a wealthy audience. The publication is also able to instantaneously prove to advertisers that their readers are highly engaged due to the high subscription fee.

When the company initially launched its Pro service, it gave discounts to the most powerful and well connected potential subscribers. Subscriptions for Congress began at $1,495, subscriptions for government contractors or lobbyists began at $2,000, and subscriptions any further outside the Washington D.C. political circle were charged with a flat fee of $2,500.

The transition in focus from the general public to the elite has served POLITICO well, as an audit found that it has risen third in full time editorial positions among digitally-native news organizations with 186 staffers in 2014, only behind Huffington Post and Vice.

POLITICO’s focus on a wealthy and impactful audience is part of an inevitable trend that the rise of digital news media companies have caused. No longer can news outlets monopolize entire cities or captivate a nation as they easily did in the past. As POLITICO’s success continues, other new organizations will make aggressive bids to a more wealthy audience.

Expansions by POLITICO and decisions by news media executives in the past few years have shown that there’s an increased interest in appealing to an affluent, and sometimes powerful, audience.

Last September, POLITICO announced that it was acquiring Capital New York, a small news media organization focused on city and state politics. Capital New York proceeded to hire 30 editorial staffers and shifted to a narrow spectrum of coverage on City Hall, Albany, and news media. Capital’s business model is largely the same as POLITICO’s, with Pro services offered in Albany, City Hall, and news media.

Capital’s focus on influential and wealthy subscribers has led the company to become profitable in less than one year since it was acquired by POLITICO. Taking POLITICO’s focus of a highly engaged and powerful audience in the macro political spectrum of Washington D.C. and applying it on the micro level at Capital is a testament to the viability of this business strategy.

Jill Abramson, the former Executive Editor at the New York Times, announced a joint venture with news media entrepreneur Steven Brill. The business model for the magazine start up project will be centered on publishing one lengthy article a month that will pay approximately $100,000 to the writer. Abramson and Brill said that the project will almost entirely be funded by hefty subscription prices. The magazine start up projects a dangerous trend for journalism; that an extreme concentration on a wealthy audience can go beyond the invested audience that politics can regularly produce.

The Brill-Abramson project, which already has investors, is on track to prove that a sole concentration on a wealthy subscription base can still be fruitful and also apply to a general audience.

The New York Times, which already touts a wealthy audience to its advertisers, showed signs of increasingly focusing on an audience that can be more engaged and pay more money for content when it announced the Times Premier app in this past March.

“The Times Premier subscription will cost $45 for four weeks…the subscription, which also includes special content like access to compilations of articles from The Times’ archive and additional crossword puzzles,” a description of the subscription reads.

While Times Premier is only $10 more than the Times’ regular digital subscription, it shows that the shift to an audience that is willing to pay more, rather than looking to expand to a larger audience in general, is now an acceptable form of revenue for the paper of record, which has a historical track record of starting trends in journalism.

The trend has provided an economic uptick for these organizations, it signals distress for journalism and its core purpose to inform the public.

The new and stronger trend to rely on a smaller audience that’s willing to pay exuberant prices suppresses news that aids the democratic process. In late October, POLITICO announced the addition of Labor and Employment Pro.

“Pro Labor & Employment is a direct response to feedback from our Pro subscribers. Labor policy has been undercovered by media outlets in recent years, and we plan to change that. Our coverage will be essential to any company with a sizable workforce, any union that represents one, and policy professionals who track labor and employment issues,” the company announced in a statement.

Labor and union issues have in fact been historically under covered by mainstream media outlets. The issues of labor are largely the issues that directly affect middle class Americans, even more so than coverage of Congress and the White House, which often turns into “horse race” coverage rather than the issues at hand.

Unions in the United States have become especially weaker in the last two decades, making widespread coverage of unions an impactful topic for working class Americans. Instead of a shift in mainstream media to begin informing the public of these issues, the only major push for labor coverage has been POLITICO’s recent announcement to create an entire division of reporters dedicated to labor news and policy.

POLITICO’s coverage will only be provided to users able to pay their premium prices and the subscribers receiving the information have no vested interest in relaying one of the most underreported topics in media to the general public.

The problem also extends to POLITICO’s sister company, Capital, which has extensively covered fracking, corruption in the State House, the rift between charter and public schools, and other topics that tie back to legislation in New York.

The New York Post, Daily News, and the Times all have a larger reach than Capital, mostly because of their age and reputation in comparison to Cap. But for Capital there is no financial incentive to reach out to all New Yorkers.

POLITICO bills itself as “powerful journalism” for a “powerful audience.” The audience its Pro service caters to is highly influential, but its concentrated distribution to high paying individuals brings into question whether it serves journalism’s most essential factor: serving a democracy.

POLITICIO’s revolutionary business model is unique in the increasingly growing field of digital journalism and with more competitors than ever, more companies will likely turn to affluent individuals to support their efforts.

How and to what extent different news organizations implement the business model will vary greatly, but the reliance of the business model signals that a focus on affluent readers will be a staple in news media for the foreseeable future.


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