In this bonus episode of Media Voices, we hear from Nicholas Thompson, CEO at The Atlantic. We first had Nicholas as a guest on the podcast back in 2019 when he was WIRED’s Editor in Chief, about what he’d learned a year after introducing a paywall to the brand.
Nicholas has since been credited with being a driving force behind The Atlantic’s recent return to profitability and subscriber strategy success. So we were keen to invite him back on for a wide-ranging conversation about how he achieved the turnaround, as well as what happened to their paid newsletter scheme, Apple News+, and his thoughts on wider industry trends like AI.
Nicholas spoke about the experiments The Atlantic has run around its paywall strategy over the past few years, transforming the business holistically, and doing less but in much more depth. He also shares his outlook for the rest of 2024 – including the election effect – and how he’s setting his next goals for the publication after meeting both the 1 million subscriber and profitability milestones earlier this month.
Here are some highlights from the interview, lightly edited for clarity:
Nicholas’ purview on joining The Atlantic
When I was hired, I was given a very specific mandate. The company was losing money, and the ownership didn’t want to lose money any more. So they wanted a strategy that would get us to sustainability.
It was fairly clear fairly early that the core of the strategy would be trying to make the paywall more efficient and the consumer revenue number larger. Obviously you want to improve your advertising numbers and sell better deals and get better margins. But the core of it was going to be working through how to optimise our consumer revenue strategy.
My initial instinct was that the way to make The Atlantic profitable would be improving the advertising business, improving the consumer business, but that a lot if it would come from launching a third revenue stream. I wasn’t sure what the third revenue stream would be.
We ran a lot of experiments and we built out some models, but we never actually built a significant third revenue stream, it just didn’t happen. But what we did do is almost tripled the amount of money that was coming in from the consumer revenue division, which is what led to the financial success…
But actually the most important point is this, and it took me a little while to realise it when I came in. The way to run The Atlantic, when I came in, I thought it was, ‘Alright let’s come up with the perfect business model, and we’ll work in tandem with editorial and create the content that supports the perfect business model.’
That’s not really it. It’s, let the editorial team do what they’re going to do, and then build the best business model you can with that as your baseline assumption. So they are pursuing their editorial strategy, which I love. And we’ve built a business model that supports it, and is downstream of that strategy.
The outlook for 2024
The subscription arc here was the number of subscribers grew dramatically during the Covid years, and during the 2020 election. We published some incredible stories. And then it stalled out – readership started to decline significantly, both because a Biden presidency is not as exciting to Americans as a Trump presidency, but also because the social platforms started to deprioritise news on their platforms. That was a complexity we had to deal with, so we had far fewer readers. So in 2021, the total number of subscribers to The Atlantic at points was certainly flat, business was not going well.
We were publishing great stories. It’s just our traffic wasn’t as high and our subscriptions weren’t high. So it was around then that we started to make a lot of changes; offering trial subscriptions, changing the way the paywall works, all the pricing tests, the product selection page, all of the nuts and bolts of how you get people to subscribe.
Now we’re going into the 2024 election. My guess is that there’s not remotely as big a Trump bump as there was last time… I think there’s a certain amount of fatigue with Trump. So when I model out the economics for the rest of the year, I assume a small increase in traffic, maybe slightly larger than small, but not a huge increase in traffic. Maybe a modest increase in subscriptions, and a major decline in advertising, because every advertiser wants to avoid the chaos of the election. So I think our revenue will probably be fairly stable across the year.
Setting future goals for The Atlantic
[Next goals] are actually one of the most important questions. I have the strategic plan for The Atlantic with all of my problems and priorities on sticky notes on my wall. Part of that is the question of what the next goal should be. I don’t know what the next goal should be – you can imagine maybe 2 million subscribers, but that’s not quite it, it’s going to be a while until we get to 2 million subscribers.
I’m very conscious of the fact that whatever you set as the goal for the company incentivises people to get there, sometimes not doing things that are good for the company. So if we had only a goal of getting to a million subscribers, and not a goal of profitability, there are all kinds of things – you could just run paid marketing or offer discounts for people to get The Atlantic for $1, and you’d get to a million subscribers very quickly.
So it was the twinning of the profitability and the million subscribers that actually put us into a good place and incentivised good behaviour. So what I need to do is to come up with a goal that incentivises good behaviour and gets us to wherever we need to go next.
For a full day of publisher podcast and newsletter best-practice, from what publishers are doing with paid podcasts to harnessing AI in newsletters, make sure you’ve got June 12th in your diary. Tickets are now available for the Publisher Podcast and Newsletter Summit at a pre-agenda rate until the end of April.
