Quartz was launched in 2012 as a free business news publication. At the time, the news outlet was innovative, with its mobile-first strategy and its specificity targeting high-earning and highly educated readers. Advertising was its bread and butter. Seven years later, the publication can no longer live off commercials and is strengthening the relationship with its readers through a membership model. In a world in which generalist outlets get most of the subscription and advertising revenues, specialist news publications must build on the only two features that characterize them—their specific content and their readers’ loyalty.
When Quartz was born, it stood out because of its innovative techniques: it was one of the first publications to send out newsletters, it designed its distribution strategy around smartphones and tablets, and it also implemented a healthy Facebook outreach plan. However, everyone followed its steps, and Quartz realized it needed to change. Last year, the publication launched a membership program, without success. Shortly after, its parent company Atlantic Media sold the news outlet to the Japanese media company Uzabase for $86 million, and this year Quartz put up a metered paywall—5 articles per month for a $100 yearly fee.
In recent years, Quartz has had a hard time finding an efficient business model. While it has traditionally relied on digital advertising, ads are not faring as well as they used to. The outlet generally avoided banners that cluttered the website and opted for sponsored content or carefully designed high-end commercials from sponsors such as Prada or Boeing. With an audience of highly educated business people, those sponsors could make profits. However, Quartz revenues have decreased. The New York Times reported that Quartz lost more than $16 million on $12 million in revenue in the first half of 2019. The reason, they pointed out, is the increasingly harsh online ad market. As Google and Facebook take over 60% of digital advertising dollars, other digital publishers settle for scraps.
Pay-per-content seemed to be the last resort, or the only recourse, for specialist outlets. Other business publications get most of their revenue from subscriptions, such as The Wall Street Journal, which has a hard paywall, or the Financial Times, which is focusing on strengthening its subscriber base. Like them, Quartz is going after its readers’ loyalty. Unlike them, its first push failed. For a specialist news outlet, it’s hard to differentiate itself from generalist publications with quality content. If readers want news, they subscribe to generalist outlets like the Washington Post or the New York Times; if they want financial press, they can get the Financial Times or the Journal. For example, the Times recently reported that the third quarter of 2019 had been the best quarter so far for digital subscriptions, with more than 4 million digital subscribers. Also, their subscription fee is lower than that of Quartz. So what’s the solution? Offer readers more than just a news product.
In the last months, Quartz has made a push to become an informational product and a community, aside from a news content outlet. The publication is now also market intelligence, a required must-have for business leaders, “almost an educational product,” says the Nieman Lab. As such, the company is focusing on its members’ needs by providing unlimited access to its journalism, which includes investigative reporting, guides to “the forces shaping the new global economy,” and relationships with journalists and members, according to its website. In its fight for survival, Quartz is drifting away from a news-only identity to a community approach, which has worked for generalist outlets like The Guardian (read How The Guardian capitalized its membership model.) For Quartz, this would make even more sense, as the community is more defined. Members get to be part of an exclusive group of businesspeople with know-how and inside information. And if that’s not enough, Quartz repackages its journalism into slide decks for its business audience, reports the Nieman Lab. Subscribers can use those slides and journalistic stories for their own gain—for example, apply that information to their market research or presentations. It doesn’t get more member-focused than that.
Interestingly, some generalist outlets are also trying to sell themselves as a specialist in certain areas, to gain traction among subscribers and increase the traffic. For example, New York Magazine’s verticals are very much differentiated online—Vulture does entertainment while The Cut does lifestyle and fashion. Although they are just sections of the same magazine, their online identity is entirely different, which opens up the next question. While specialist outlets become even more specialized to grow, generalist outlets can either win by providing massive content or by becoming specialists in different areas. However, they may find a hard time competing with more established specialist outlets…. or not, as their audience is already there. We will see.
In specialist journalism, business models are changing. Quartz is modifying its product to make it useful for its readers; verticals from generalist outlets are gaining differentiation online. While it’s true that business people need context and market intelligence, not just breaking news, and Quartz can offer that, in any format necessary, we have to wait and see how generalist papers with specialist verticals react and change their strategy. They could launch similar initiatives at lower costs than Quartz if the model works for the latter. For now, the industry is watching Quartz’s new member-focused strategy unfold.