On the internet, the hypothetical audience expands to take in the entire world. But that’s only in theory. In practice, only a few players can command huge scale. For the rest it makes more sense to find that tiny percentage of people — who can be located anywhere — with a strong interest in what you make. This is niche publishing.
The rise of niche publishing is the result of big changes in the way news is produced and consumed. On the supply side, the proliferation of easy to use web publishing tools such as Blogger and WordPress, plus the internet itself as a substitute for delivery trucks and broadcast licenses, lowered the barriers of entry — the cost of publication and distribution — to almost zero. As Clay Shirky puts it: “There’s a button that says ‘publish,’ and when you press it, it’s done.”
This has led to a vast increase in the supply of published material, or what the advertising industry calls “inventory.” Advertisers now have many more choices for where to spend their ad dollars, which means lower revenues for most publishers. Because digital publishing produces far more data about individual users, targeting (reaching the right people with the right message at the right time) is more efficient and effective. The companies that do it well are Google and Facebook. They have sucked up most of the digital ad revenue, forcing newspapers to reduce costs, often by reducing the quality and scope of their coverage.
On the demand side the big change is the unbundling of the news package. Print newspapers provided a package of content that included a little of everything: local stories, sports, cartoons, gardening tips and editorials, all bundled together into a single product. People had no option but to subscribe to the entire package. Advertisers had no option but to pay for all the readers who subscribed. A digital news economy undoes the logic of the bundle. People find the news they are interested in and disregard the rest.
A second way consumption changed is what Ben Thompson of Stratechery calls “the end of average” for news. Readers can now access the best work published on the entire internet. Before they had to settle for the best their local paper could produce, or subscribe to expensive specialized journals that typically came monthly. Today if you are highly interested in something you can read a specialized site that is published daily and has been accumulating knowledge on a subject long before it reaches the radar of general interest sites.
Put all this together and you get the logic of niche. But it is not just a matter of size. True, most niche publications are small operations and have small audiences, but that’s not a good definition. The fundamentals of niche publishing are these:
- Niche publications — also called single subject sites — focus on one topic or issue.
- This allows them to accumulate deep knowledge and track important stories over time.
- High quality, sophisticated content earns them interested, engaged and loyal users.
A benefit of being niche is that it allows you to keep your operation small, and avoid high operating costs. There are also problems. Advertising is still one of the main revenue sources, but advertising is steadily losing value. Niche publications can not make it up on volume because they don’t produce a lot, or reach large audiences. Venture capital is unlikely because none of these properties is ever going to be huge.
Having a small operation often means you don’t have a sales rep, a marketing department, or anyone in charge of business development. Which in turn means that journalists end up taking all these roles for which they are not prepared or well suited.
Then there’s the technology gap. Technology requirements in digital publishing are constantly changing. Tech talent can be expensive for a small operation. This is why Ben Thompson recommends subscription models. “Niches are best served by making more from customers who really care than from milking pennies from everyone,” he says. Events can be a source of revenue for some, benefactors or foundations for others.
Put it this way: Niche is not a way to get rich. The reason to do it is to produce great journalism by training a steady eye on a subject.
Nichepapers are different because they have built a profound mastery of a tightly defined domain — finance, politics, even entertainment — and offer audiences deep, unwavering knowledge of it.
I am, of course, acutely aware that there is a tradeoff when it comes to the subscription business model: by making something scarce, and worth paying for, you are by definition limiting your number of readers. Stratechery, though, serves a niche, and niches are best served by making more from customers who really care than from milking pennies from everyone.
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