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Despite existential crisis, new media start-ups keep coming

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Journalists are notorious drama queens when it comes to their own industry. Still, this has been an undeniably bleak start to the year. So far in 2024 there have been lay-offs at The Wall Street Journal, Time, Business Insider, LA Times and Sports Illustrated, plus the abrupt closure of media start-up The Messenger. On Thursday, Vice News announced hundreds of lay-offs and said that it would stop publishing on its website. 

As fear permeates the sector, the lure of a more independent career is growing brighter. Who wants to labour in an unstable newsroom job when you can become a content creator and post your work yourself? 

There is a theory that the future of media will consist of a handful of global organisations and many thousands of individual newsletters, video channels and podcasts. This is likely to mean less news and more commentary. Reporting is expensive and difficult. Without the infrastructure of media companies it could dwindle.

Still, it is better than some of the other imagined futures being touted. Here in the US, there is a line of thought that says the era of media is on the way out altogether. Cheap generative artificial intelligence could gut the sector. Perhaps, says Politico, journalism will become a hobby “like scrapbooking”.

One spectacularly gloomy blog about the recent lay-offs by freelance magazine writer Jack Crosbie attracted attention by suggesting that the set up of media organisations already felt out of date. The idea of journalists publishing “under one masthead in service of, generally, a shared ideological goal — that’s going tits up”, he wrote.

This is the sort of bracing language that lets you know how deep journalists have descended into an existential crisis. Physical paper and magazine sales keep dropping. Online brands that once seemed the future of reporting, like BuzzFeed News, have disappeared. Social media has turned its back on the sector. After Elon Musk purchased Twitter he set about removing profile verification blue ticks from journalists, limiting the reach of posts with links and removing article headlines. Last year, Meta announced that its Twitter-like app Threads would not encourage “hard news”, whatever that means.

The sector’s saving grace is that a lot of journalists like their work. That tends to encourage ideas. In California, one start-up is testing out a new model. Since August, 404 Media has been publishing an eye-catching range of stories about the tech sector, including reports of AI personality tests at job interviews and Instacart AI recipes with ingredients that do not exist. Not only is it producing good stories but its founders say it is breaking even.

How do you create a new media company when the background noise is so negative and tech companies absorb the majority of online advertising revenue? The answer is to witness first hand how mistakes are made and how they can be avoided.

Jason Koebler and his three co-founders of 404 Media met while working at Vice. In the early 2010s, life there was as fun as it looked from the outside, he says. Headcounts were rising and ambitions were high. But as he rose up the ranks, becoming editor-in-chief of Vice’s tech-focused brand Motherboard, he realised that the business had costs that the journalism could not meet, no matter how good it was or how many views it attracted.

Vice kept pivoting in search of ad dollars, but operating losses grew. The company, once a global empire valued at $5.7bn, filed for bankruptcy last year. It was later sold to Fortress Investment Group for $350mn. 

After watching their old employer struggle, 404’s founders took a very different approach. They are pursuing every online revenue stream available. That means subscriptions (from $100 a year), digital ads, an online tip jar and merchandise. There are plans to sell intellectual property to documentary and film makers.

The founders produce the content themselves and own a quarter of the company each, keeping costs down by working from home and controlling expenses. They push their stories out to every available platform — posting links on X, Bluesky, Threads, TikTok, Instagram Reels, YouTube and Mastodon. Readers must supply an email address to read stories online. 

By taking responsibility for monetising, distributing and promoting the content they create, 404 Media’s founders certainly seem more proactive than many traditional newspaper and magazine journalists, who tend to sit far away from the moneymaking and audience-building sides of their business. Yet unlike most content creators on YouTube, Instagram and elsewhere, they have a shared ideological mission that goes beyond clicks. The newsroom may be virtual but it still exists. 

elaine.moore@ft.com

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