Scoop: The Atlantic's ad business takes a short-term hit as it focuses on profitability
The Atlantic has booked $19.5 million in advertising and events revenue so far this year, according to data shown to staff during an internal presentation last week, putting it at 60% of its $32.5 million goal for the year.
Why it matters: After years of losing money, The Atlantic is hoping to finally reach profitability in 2024, CEO Nicholas Thompson told Axios. But to do so, it's having to make some short-term changes to its advertising business that are impacting its top line.
Between the lines: "We changed the way we sell in that we reoriented around trying to increase profit," Thompson said, noting that the company's ad business this year is more profitable than it was last year. (By this time last year, the company had booked $26.3 million in top-line ads and events revenue, per the presentation.)
- That means the company has had to focus more on selling higher-margin ad deals.
- For context, roughly 60% of The Atlantic's revenue comes from consumer subscriptions and 40% from advertising and events.
Zoom out: The Atlantic's ad business challenges reflect broader struggles the media industry faces as growth within the ad industry slows.
- But the company's journalism hasn't been impacted. The Atlantic has won a Pulitzer Prize in each of the last three years.
Yes, but: Despite slower ad and sponsorship sales, The Atlantic has currently booked more overall revenue to date compared to this time last year, thanks to a surge in subscriptions, Thompson said.
By the numbers: The company now has 925,000 paid subscribers, per Thompson, a figure that includes print magazines sold across physical newsstands and digital subscriptions sold through The Atlantic's partnership with Apple News.
- Of the company's new subscribers that joined this year, 54% are digital-only. The Atlantic first introduced a metered paywall on its website in 2019. It adjusted its paywall to become more flexible earlier this year as it hopes to attract 1 million subscribers.
The big picture: The company, which has around 330 employees, will end this year with significantly more than $75 million in revenue, which is roughly how much money it made in 2019 and 2020, per NBC News.
- Thompson said The Atlantic hopes to reduce its loss this year compared to last when it lost roughly $10 million as it aims to inch closer to profitability in 2024.
- "Overall, the economic position of the company is way better than it was last year," he said.
Catch up quick: The Atlantic began losing money in 2018, after its former owner, media and business entrepreneur David Bradley, sold a majority stake in the publication to Emerson Collective, a for-profit investment and philanthropy firm owned by Laurene Powell Jobs.
- The company added 100 staffers in 2018 shortly after Powell Jobs purchased her stake. But the additions, which were billed as part of a 12-18-month expansion, ate into the outlet's bottom line.
- Two years later, the company laid off nearly 20% of its staff, or 68 people, in response to business challenges driven by the pandemic. It's been trying to claw back to profitability ever since.
Between the lines: While consumer revenue via subscriptions remains the largest part of The Atlantic's business, the company has been working to add new revenue streams to support it.
- In particular, it's focused heavily on television and licensing revenue, optioning shows and documentaries based on stories from its journalists.
- A spokesperson said that despite the Hollywood strikes, the company is on track to meet its licensing revenue goals this year.
What to watch: Last week, the company announced a new partnership with PBS NewsHour to partner on its flagship weekly news program "Washington Week."
- The Atlantic's editor-in-chief, Jeffrey Goldberg, will be the new moderator of "Washington Week" beginning this Friday. It will be rebranded as "Washington Week with The Atlantic."
- The Atlantic will also join WETA and PBS NewsHour as a business partner to sell ads against the show.
- "Our goal is to sell to new advertisers," Thompson said, noting that the TV deal will allow sellers at The Atlantic to service new types of advertisers and expand existing partnerships.