Ceilings, walls, slow growth

This week:

• A conversation with Defector Media’s Jasper Wang on incremental growth
• The Rebooting's next online forum will go inside Hearst’s first-party data strategy
• For TRB members: Hitting ceilings vs hitting walls

Reminder: Upgrade to TRB Pro to get full access to all of The Rebooting’s content. I’ve extended the 20% off offer for the rest of the week. Appreciate the support.

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Defector’s Jasper Wang on slow growth

Defector, the sports and culture publication launched four years ago by former Deadspin writers, is an example of the mixed picture for the future of the media business. The tradeoff of sturdier business models is slower growth.

On the plus side, Defector is a solid business, operating profitably with $4.6 million in revenue and 42,500 paying subscribers while fully employee owned and without any outside investors. At the same time, Defector’s revenue grew by just 2.2% and its subscription revenue, which accounts for 83% of the business, grew by 1.3%. It ended its fourth year of operation with 42,500 paid subscribers, up 400,000 from year three.

Defector’s revenue growth shows a business that’s hit a wall. After accruing $3 million its first year, Defector’s annual revenue growth has gone from 16% to 18% to 2.2%.

"The state of Defector is strong," said Jasper Wang, COO of Defector Media on this week’s episode of The Rebooting Show. "I mean, it's fine. It's steady. In some ways, that's the best thing you can be."

That steadiness means approaching the business with a healthy dose of realism.

"I don't think anybody in-house is under any false ambitions or pretenses that we will find the next gear in the next year that gets us back on the 20% year-over-year growth," .

In some ways that’s the story of the modern media business. Incremental growth is the new meteoric growth. Subscription models are more reliable. Defector has a solid renewal rate but even the subscription business isn’t immune to macro challenges like the difficulty in gaining organic distribution through search and social platforms. 

Jasper and I also discussed Defector’s plans to expand its ad revenue, the inevitable challenges of fast decisionmaking in an employee-owned business, the “lean stack” approach of outsourcing as many publishing and corporate functions as possible, and the growth of its Normal Gossip podcast and diversification of Defector’s audience.

Listen on Apple| Spotify | other podcast platforms

Inside Hearst’s first-party data strategy

Digital advertising is in the midst of profound change in the use of audience data. For publishers, this represents a challenge but also an opportunity. On Oct 31 at 1pmET, I’ll be joined by Matt Kyme, senior director of product at Hearst, and Patrick Crane, director of core sales at BlueConic, to discuss how Hearst is using the “crisis” as an opportunity to build consented first-party data strategy in order to create valuable audience segments for advertisers.

Ceilings and walls

Hitting the wall is a reality of most endeavors, not least publishing. The days of heady growth inevitably taper to a trickle. The early gains, which themselves felt difficult, slow. The business requires new tactics. 

The wall is surmountable. Hitting the ceiling is different.