Arjun Moorthy - Nov 9, 2018

Why isn’t there a Netflix for News?

For most content — music, video, TV — there are subscription models that allow people to access a wide range of content for one low monthly fee. Spotify and Netflix have shown the demand is high for such offerings. So why isn’t there something similar for news?

This question is timely as news organizations grapple with the loss of the advertising revenue to Google and Facebook. Many are realizing subscriptions are the solution and are putting up paywalls. But people are used to content being free and even if people subscribe to one paywall what’s their appetite for subscribing to two or more? Not much. So why hasn’t the news industry come together to create a bundle like Netflix or Spotify?

Cannibalization — the elephant in the room

A couple months ago I met with senior leaders at The New York Times, Washington Post and Wall Street Journal. I asked them why there wasn’t a Netflix for News given that all three cannot seem to convert more than 3% of their monthly uniques to paid subscribers. Their paraphrased answers are below.

paywall success
Even with best-in-class funnel optimization, nobody converts more than 3% of traffic

The folks I met admitted that they had optimized introductory offers and the number of free articles allowed each month as much as possible. So to break past the 3% barrier another tactic was required.

They conceded that the 97% that don’t subscribe contained a large number of people who may never be loyal to a single news outlet. To get this segment a multi-publisher bundle — i.e. Netflix for News offer — might be attractive, giving them only the content they want from each publisher.

But they disclosed that even within their existing subscribers there is a large contingent of customers who log in infrequently. Hence any multi-publisher bundle that is cheaper than a single publisher’s price would likely cannibalize their customer base. And the bundle would likely not make it up in volume fast enough.

News is not entertainment

One executive I spoke to pointed out that even if Netflix for News existed the market is small because most people just don’t want to pay for news. Because unlike music or video, news is not entertainment.

With music and video people want more of it and there’s never enough. With the news, it’s the opposite problem. There’s too much news and most of it is rather depressing. So people want less of it and that means outside of news geeks most people just don’t care to pay for news.

Or…actually, is news entertainment?

What’s striking is that news consumption is at an all-time high and goes far beyond news geeks. Look at Twitter’s 350M monthly users, or Reddit’s 300M monthly users, and you can see that a huge part of their usage revolves around news. How come?

Twitter, Reddit, Facebook etc have done what publishers haven’t been able to do — fuse entertainment with the news. The comments people leave on news stories can be hilarious, infuriating, thought-provoking, and much more. So many people skip the news story and just read the comments… which is how you suddenly find you’ve sunk hours into reading a comments thread or arguing with some random person on the internet.

As long as news is paid for by advertising is it surprising that fake news gets more views than real news? Or that CNN, Fox, and so much of cable news is focused on salacious headlines? Of course not — it’s entertainment.

Give me what I’m interested in

But what Twitter, Reddit, and other social networks have also shown is that people have all kinds of esoteric interests and are eager to find the best content in these topics. Social networks rely on popularity measures like shares/hearts/votes to surface content but, as we’ve seen in the last few years, popular content is not always the same as best content.

This has led to an ever-increasing range of content specialists who are amazing at a very focused topic. Think of The Intercept when it comes to civil liberties, Naked Capitalism on geopolitics & finance, or The Player’s Tribune for first-person sports reporting.

And as news sources get fractured there’s a resurgence of specialist curators. For example, REDEF is fantastic for news on the media industry. For interesting cultural news, Kottke is legendary and Longreads refines this further with long-form content. For technology news, Hacker News is reliably good at surfacing high-quality content and newsletters like Benedict Evans’s are an excellent wrap to the week.

Is there a market for curation alone?

All the above curators are free or donor-supported so it begs the question, will people pay for curation?

An example of a paid newsletter is Conor Friedersdorf’s, The Best of Journalism. By paying $2/mth, you received Conor’s handpicked selections of some of the best news in the prior week. I’ve only just subscribed but from the first two newsletters I can attest to its quality and diversity.

However, it’s unclear how many people are like me, willing to pay just for curation, and honestly, I might cancel soon. Maybe curation isn’t sufficient value by itself but is a piece of the puzzle.

Be original

What people do regularly pay for is high-quality content that is exclusive. Think House of Cards on Netflix, or Game of Thrones on HBO. You simply can’t find these amazing shows elsewhere, free or otherwise.

So, if a Netflix for News bundle included only high-quality original stories that are not found elsewhere might this increase its attractiveness?

This requirement about bundles needing high-quality, original content gets at the reason why so many people hesitate to pay for news today. So much of it is duplicative, or poor quality, that no matter how low the price people can always find a free alternative that’s decent. But if there is no comparable content then it’s much easier to justify paying for a news article.

The magic formula: personalized original content

Combining the above, maybe the Netflix for News bundle will have high-quality unique content from a broad range of sites, personalized to one’s taste, and behind a paywall that forces people to pay. (I’ve started building a prototype here).

From a personal standpoint, this appeals to me as it gets to why I terminated my subscription to The New Yorker after twenty years. I still love the magazine but I only care for certain topics — those on the environment (often written by the amazing Elizabeth Kolbert), on technology, and on finance.

But these topics are infrequent so, many times, an issue collects dust while I search for good content elsewhere. If I could regularly get such high-quality stories, on topics I care about, then I’d save time and happily pay when required.

That’s certainly the formula used by technology analyst Ben Thompson whose $10/mth newsletter has a committed fan following, myself included. Indeed, Ben himself gets to a similar conclusion on what makes for an attractive news subscription:

Every person has something they care about, something that is woefully undercovered and wildly misunderstood by general purpose publications. How much would that person pay for someone that actually understands and makes them think about that topic, whether it be their city, their hobby, or their career? I suspect the number is a lot bigger than any survey would tell you.

The very success of Ben’s subscription model stands in stark contrast to the vast array of tech news outlets that have lots of news, but most of it shallow and duplicative, and nearly all of which are struggling to be profitable.

There will be a Netflix for News

When the above formula is applied at Internet scale, with billions on people online, it seems likely that there will be a Netflix for News. The bundle may focus on high-quality exclusive content that is tailored to your interests so you read less but better. It may not include the biggest brands, but when you see that the best news comes from a wide range of sources you may not care.


Epilogue 1: Just after I published the above, Buzzfeed announced it will try and merge with rivals. And a few days later Mic shut-down, HuffPo said they might put up a paywall, The Weekly Standard shut down, and Salon decided it’s putting up a paywall again. As Ben Lerer, CEO of Group Nine, says: “Consolidation in digital media is something that is going to happen.” Such consolidation should hasten the creation of a Netflix for News.

Epilogue 2: On Feb 12, Apple News leaked plans for a Spotify-for-News that is deeply flawed. See why.

Written by Arjun Moorthy