The past few years have been bumpy for many publishers. Quartz is no exception; squeezed by plummeting ad revenues and a slow takeup of its membership offering, it has seemed to struggle to find its place. Could independence give it a fresh start and a tighter focus?
Change is something staff at Quartz will be very familiar with. In 2018, Atlantic Media sold the publication to Japanese intelligence firm Uzabase for between $75m and $110m. But two years later, as the financial impact of the pandemic began to bite, rumours began circulating that Uzabase was looking for a buyer.
In a twist, Co-Founder and Chief Executive Zach Seward announced in November 2020 that he was partnering with Editor-in-Chief Katherine Bell in a management buyout to operate the publication as a private company. The terms of the sale weren’t disclosed, but Uzabase has said it will record a loss of $55m on the deal.
Now, the publication is refocusing as it looks to chart its own course. We caught up with Seward on the Media Voices Podcast to find out how he and the team are getting on just months after taking ownership.
Seward has anticipated change from the beginning, and will continue to embrace it at Quartz. “We’ve tried to be open about what we know and don’t know about what works in digital media,” he told us. “We said on day one, we expected that consumer habits and the industry writ large would be rapidly changing.”
“We wanted to set Quartz up to be ready to adapt to all those changes as we went, and be open about what we were thinking and doing along the way.”
A bumpy start to membership
Adapting to the changes hasn’t all been plain sailing. Quartz launched its membership programme in late 2018 – a move the Uzabase takeover was supposed to accelerate – and shifted all its content behind a metered paywall in 2019. The membership offering was priced at $15 per month or $100 per year for unlimited access to articles, exclusive guides, and shows.
But the membership launch didn’t go smoothly. In the first year, they attracted just 10,438 subscribers; far below expectations.
By the end of 2019, the company was reporting a $18.4 million loss on $26.9 million in revenue. As the pandemic began in early 2020, advertising sales dropped by 54%, and the company laid off almost half its staff, and closed offices in London, San Francisco, Hong Kong and Washington D.C.
“As industry furloughs and layoffs continue, Quartz has joined a growing club of publications that seemingly got caught in the mushy middle of 2010s digital media, like Mic and Mashable,” wrote Digiday’s Steven Perlberg back in June 2020. “Not quite niche enough to be essential to a small group of readers, but not quite big enough to compete at scale.”
Things were beginning to look up by September 2020. Quartz reached 21,000 paying members, doubling its subscriber base in less than a year. Then-President Katie Weber credited this growth to fattening their membership offering, and the launch of a ‘Need to Know’ coronavirus-themed email newsletter.
But the Covid-induced collapse of the US advertising market earlier in the year meant that Uzabase couldn’t meet their target of making Quartz profitable within three years.
An opportunity to refocus
Following the management buyout, the publisher is seizing the opportunity to refocus and find the audience it will become essential to. A key part of this has been making their own mission clear. In a post announcing their independence last November, they revealed a new tagline; Make business better.
“There’s a desperate need to rethink a lot of the fundamental ways in which business is conducted. That’s a perspective that Quartz has had from day one, but we hadn’t gone out and made it our explicit mission of the news organisation until now,” Seward told us.
“We all thought that was crucial to do in this membership era. When you’re pulling out your wallet to give money to a news organisation, a lot of that is about signing up for that organisation’s mission. We need to be clear about what that mission is for Quartz.”
Evolving ad revenue
Membership won’t be the publisher’s only focus going forward. Seward is aiming to have revenue from advertising playing a part – albeit much diminished – and has a target to get to 50:50 advertising and membership revenue within the next five years.
“The subscription business benefits from a slow and steady build-up,” he explained, adding that it has doubled over the past year and is now in a place where it is driving significant revenue. “But it’s still a minority of our business. Advertising is still much larger.”
Sponsored content plays an important part in Quartz’s advertising strategy. But although Quartz was an early adopter of sponsored content, the nature of the relationship and work done with clients has changed significantly over the years.
“There was a period when everybody wanted the flashiest possible interactive,” he said. “These days, a lot of our clients have invested in their own content creation and building newsrooms internally, which is, to my mind, a positive development and a sign that they are taking brand content really seriously.”
“What they’re coming to us for is a variety of things to help make that work more effective. They work with us to run surveys of our audience to help inform their marketing strategy… or to transform a whitepaper into a piece of content that fits what we know our audiences desire.”
It may be early days for the newly-independent publisher, but there are signs that the shifts in strategy are paying off. In the week after its announcement in November, it saw a surge in membership, taking the total to 25,000 paying members globally. Now, the publisher confirmed to us that they have over 27,000 paying subscribers.
There are also signs of an ad market bounce-back. Companies in the US are expected to spend more than 15% more on advertising this year than they did in 2020, thanks to increased consumer confidence, and pent-up demand being released as vaccinations continue to be rolled out.
As for its profitability, Seward has said he wants that to return as soon as possible. “I want, and have always wanted, to build a long-term sustainable business,” he told Press Gazette. “You get to that long-term proposition by really, really strong performance in the short-term, so that remains our focus.”
The publisher may have been caught in the ‘mushy middle’ during a tough few years for digital publications, but it’s clear that they are well-positioned to make the most of post-pandemic opportunities. “We’re only eight years into this,” Seward reminded Digiday. “The history of Quartz won’t be written for quite some time.”
Listen to the full episode featuring Zach Seward here [interview begins at 16:20]: