News Media Collapse

This week we talk about The Messenger, ads, and generative AI.

We also discuss search engines, algorithms, and Semafor’s new curation tool.

Recommended Book: The Coming Wave by Mustafa Suleyman

Transcript

There was a piece published on McSweeney's, a humorous, often satirical writing site, recently, entitled "Our Digital Media Platform Will Revolutionize News and Is Also Shutting Down," written by Devin Wallace, that includes gems, ostensibly from an announcement by some kind of new media business, like this one:

"Our new digital media platform is changing the way people consume content. We’re a one-stop-shop location for breaking news, long-form journalism, and in-depth art criticism. We’re also currently shutting down without any notice whatsoever."

It goes on to say:

"Mainstream media will try to shut us down, but they’ll never succeed since we already shut down at 3 a.m. with absolutely no warning to our readers or even our employees."

This piece is a completely unveiled criticism of The Messenger, a news-focused digital media company that launched in May of 2023 and was dissolved on January 31, 2024, about 8 months after its founding.

It was started by 70-something Jimmy Finkelstein, the former owner of The Hill, a DC-based politics and policy-oriented publication he bought in 2012, which was then acquired by another media company in 2021, who said he wanted to start The Messenger for legacy purposes, and which he raised $50 million to fund, before scooping up the assets of another new online media company, Grid News, and hiring a bunch of well-known writers and journalists from other publications, promising higher-than-usual for the industry wages for the 150 employees it hired for its launch, and that number was doubled to around 300 within a handful of months.

The Messenger was then unceremoniously shut down, the company's staff learning about its collapse and their layoffs from other publications reporting on the matter, many of them suspecting a closure, though, when their Slack conversations were suddenly shut down and their connections to the company, company emails, insurance, and the like, all stopped functioning or simply shut them out.

Company leadership, including Finkelstein, had bragged that The Messenger would defy the slow-motion collapse the rest of the news media world was experiencing, with few exceptions, because it would expand aggressively and publish constantly, increasing employment to 750 people and earning $100 million in annual revenue on the back of 100 million unique monthly visitors by 2024.

That...did not happen. It did achieve 100,000 unique daily visitors shortly after launching, but it was only able to earn about $3 million in total revenue by the waning days of 2023, and it burned through cash faster than its competitors.

That $50 million in funding had dropped to around $1.8 million in the bank from May to December of 2023, and the sudden closure seemed to be an effort by company leadership to cut their losses, though the explosion of activity and sum of money invested, followed by such a rapid decline and disappearance has earned The Messenger and those involved in its sudden shut-down the reputation for having invested in one of the most spectacular collapses in online news media history.

What I'd like to talk about today is the broader online news media industry, the challenges this industry faces, and how those challenges are shaping what's happening now and what's likely to happen next.

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Explanations for The Messenger's rapid and explosive demise are rampant, but some of the most popular orient around Finkelstein's apparently outdated ideas about how to run a news publication, his reportedly bad attitude and horrible relationships with upper-management and other underlings (alongside his reported homophobia and misogyny, which may have amplified those issues), a lack of effort or capability within the ad sales team, which by some indications barely existed, the wasted money spent on Grid News, which was apparently doing some interesting things, but which was almost immediately shut down, killing its brand equity and losing its talented staff, and the incredible amount of bias Finkelstein injected into the publication, despite his claims that he was aiming for something more in the middle for folks who were sick of ideological bias.

It's also been claimed that talented journalists were forced to work in content-farm conditions, churning out dozens of click-bait calibre stories a day, and that Finkelstein and his cronies were basically accustomed to failing-up their entire lives, and thus were caught off guard when their out of touch, but to them brilliant assessment of what was going wrong in the news media world, today, proved to be not just wrong, but company destroyingly wrong—and that then led to a frantic attemp