May 28, 2024

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1 big thing: Uncharted waters

Illustration: Sarah Grillo/Axios

Amid a weak ad market and the threat of AI, media companies are shifting their strategies to depend more on readers' dollars and less on ads.

There's just one problem. Who's going to pay?

Driving the news: That was the biggest question coming out of the Washington Post's highly anticipated "Build It" strategy presentation last week.

  • The Post's new CEO Will Lewis laid out his vision to put subscriptions at the center of the Post's business, but he didn't provide a clear picture of who those subscribers will be in terms of demographics or interests.
  • The new plan includes a premium paid tier called Memberships, a subscription tier for professionals called Post Pro, a consumer subscription product called Post+ and a Flexible Payments option for a wider set of more casual readers.
  • While the presentation went into great detail about tactical efforts to grow, including improving its search engine optimization strategy, leveraging AI and creator tools, and expanding live events, there wasn't as much discussion about the company's editorial focus and audience.

Context: The Post lost $77 million in the past year, Lewis said. Total revenues have declined 12% since 2021. Digital revenues have declined 14% in that time. There's been a 50% audience drop-off since 2020.

The big picture: Data shows that subscription media growth has slowed as publishers struggle to replace customers who canceled their Trump-era subscriptions.

  • For the Post, the next big challenge is figuring out who that new audience will be. The paper, sources told Axios, is still trying to figure that out.

Yes, but: The Post, owned by billionaire Jeff Bezos, has the luxury of time and patience from its benefactor.

  • Other companies, like CNN β€” whose parent Warner Bros. Discovery is scrambling to pay down debt β€” will have to do more with less.
  • CNN's CEO Mark Thompson has teased a subscription strategy for CNN β€” putting its star talent at the center of major editorial verticals like climate and health β€” but the company's business is still mired in cable bureaucracy, making it hard to implement any major changes quickly.

Meanwhile, the field is getting crowded.

  • announced a new membership model last week. Axios is also experimenting with a new membership model. Puck's entire business is centered around a membership plan.

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2. 🐘 Disney bounces back

A line chart shows Disney’s Harris 100 reputation score among Democrats and Republicans from 2017 to 2024. While both parties and the general public all scored around the same (between 82 and 82.9) in 2017, the lines slowly started to diverge, with a massive gap in 2023 (80.3 among democrats compared to 61 among republicans). They’ve slightly improved among Republicans in 2024, now at 67.8, though still a nearly 13-point gap.
Data: Axios/Harris poll; Chart: Danielle Alberti/Axios

The Walt Disney Company's reputation is bouncing back after losing favor with Republicans in 2022 when the company criticized Florida's "Don't Say Gay" legislation, according to this year's Axios Harris Poll 100, our annual brand reputation study.

Why it matters: Unlike Target and Anheuser-Busch β€” which also found themselves embroiled in modern culture wars around sexual orientation and trans rights β€” Disney's overall reputation score saw an uptick in the last year, thanks to a huge increase in positive reputation rankings from Republicans.

  • Disney's reputation score among Republicans jumped from 61.03 in 2023 to 67.8 in 2024 β€” one of the largest increases among conservatives across the 100 companies measured.

Flashback: Disney's overall reputation score rose steadily between 2008 and 2013 and remained relatively steady between 2013 and 2017.

  • But it began to take a hit in the Trump era, with its reputation score falling from 82.04 in 2017 to 77.39 in 2020.
  • Disney's reputation score dropped dramatically during its public political battle with Gov. Ron DeSantis in 2022 and 2023.
  • 2024 marks Disney's first reputation rebound since 2017.

Between the lines: Disney's recovery among Republicans is notable, given how polarizing the firm remains.

  • Disney has the fourth-largest political skew toward Democrats of all companies measured in the Axios Harris Poll 100, ranked only behind Target, Anheuser-Busch and Pfizer.

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Go deeper: Full results and poll methodology

3. Exclusive: AP doubles down on local ahead of 2024

Illustration: Annelise Capossela/Axios

The Associated Press has inked new deals with five local newsrooms to share and distribute content ahead of the 2024 election, executives told Axios.

Why it matters: AP sees investments in local news "as essential both to democracy and to combatting misinformation," executive editor and senior vice president Julie Pace told Axios.

Zoom in: The new partnerships feature content-sharing agreements with nonprofit outlets based in California (CalMatters), Hawaii (Honolulu Civil Beat), Montana (Montana Free Press), Nebraska (Nebraska Journalism Trust) and South Dakota (South Dakota News Watch).

  • The newsrooms get access to AP reporting to distribute to their local audiences for free, while AP gets access to their local coverage to distribute to its licensed media partners.

Between the lines: The new partnerships expand on the first agreement of this kind announced between AP and the Texas Tribune in March.

  • In that deal, the Texas Tribune got access to AP's Texas news and its immigration coverage and AP got to distribute the Tribune's reporting on Texas to its members and customers.

The big picture: AP is one of the few national media organizations in the U.S. that still has a sizable presence at the local level.

  • The wire service has at least one reporter in every U.S. statehouse.

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4. Exclusive: Daily Wire's $22M commerce biz

Photo: Daily Wire

The Daily Wire, a conservative media and entertainment company, made more than $22 million from commerce in 2023, representing roughly 10% of its revenue for the year, executives told Axios.

Why it matters: The company, which finished 2023 with a profit and more than $200 million in top-line revenue, sees an opportunity to serve consumers with "anti-woke" branded goods.

  • While the Daily Wire spent a sizable amount of money on direct-to-consumer digital marketing of its products, a spokesperson said that its commerce business had a 39% gross margin in 2023.

Between the lines: The Daily Wire launched its Jeremy's Razors brand in March 2022 after direct-to-consumer razor company Harry's Razors pulled its ads from the Daily Wire's "The Michael Knowles Show," citing "misaligned values."

  • Today, the Jeremy's Razors brand features more than 40 men's and women's shaving and bath products, such as hair, body, and beard soaps and lotions, razor cleaners, and other razor accessories.

By the numbers: In total, Jeremy's Razors products brought in more than $19 million in revenue for the Daily Wire in 2023, up from $10 million in 2022, executives told Axios.

  • The remaining $3 million+ in total commerce revenue for the company came from the Daily Wire's merchandise store, which features an array of cheeky conservative goods, such as a "Leftist Tears" tumbler mug and a "Definition of a Woman" T-shirt.
  • The company also has a separate cigar brand, called Mayflower Cigars, built around the brand of Michael Knowles, a host with the company's media division. That brand has surpassed $2 million in revenue since its November 2023 launch, a spokesperson said.

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5. πŸ€ Zaslav's conundrum

Illustration: Brendan Lynch/Axios

TNT last week inked a five-year deal with ESPN to sublicense select College Football Playoff games next season, giving its parent Warner Bros. Discovery an additional live sporting event to add to its roster in case it doesn't land crucial NBA rights in the next few days or weeks.

Why it matters: WBD would need to top NBC's bid of at least $2.5 billion per year to land the rights, per Sports Business Journal.

  • While the rights would serve as a critical boost to WBD's linear TV portfolio and its streaming ambitions, the pressure on the company to pay down $40 billion in debt makes that price tag harder to stomach.

By the numbers: NBA rights, which are being negotiated alongside a new WNBA package, are expected to double in value from what WBD currently pays on an annual basis.

  • ESPN and Amazon have already built out frameworks with the NBA for what their rights packages would include.
  • In total, the deals could be valued as high as $76 billion over 11 years.

Catch up quick: TNT, which has been airing the NBA since 1989, accounts for nearly one-third of WBD's total affiliate revenue, Axios Tim Baysinger reported.

  • While WBD CEO David Zaslav' famously said in 2022 that his company "didn't have to have the NBA," there's no doubt that without the rights, the company's cable business would be threatened.

What to watch: WBD still has other sports rights, such as NCAA March Madness games, MLB games and NHL matches.

6. Not on my 2024 Bingo card

BuzzFeed CEO Jonah Peretti (left) and Vivek Ramaswamy. Photos: Craig Barritt/Getty Images; Scott Olson/Getty Images

Former GOP presidential nominee Vivek Ramaswamy is requesting three board seats and a slew of changes at BuzzFeed, according to a letter obtained by Axios.

  • Last week, Ramaswamy disclosed that he acquired a 7.7% stake in BuzzFeed and indicated an activist investor plan to push a "shift in strategy."
  • In his letter Monday, Ramaswamy said his stake has grown to 8.37%.

Why it matters: Activist investor fights are typically a headache for company executives, but shares in BuzzFeed have nearly tripled on the news.

  • In his letter, Ramaswamy called for cutting more jobs and investing in creator-led audio and video content from conservative voices.
  • In response, BuzzFeed CEO Jonah Peretti told Ramaswamy via email that he has "some fundamental misunderstandings about the drivers of our business, the values of our audience, and the mission of the company."

7. Celebs targeted by AI scams

Jennifer Lopez. Photo: Hector Vivas/Getty Images

Celebrities, journalists and public figures are warning fans not to trust seemingly authentic videos and posts of them endorsing wellness products on social media, since so many of these images have been manipulated using AI.

Why it matters: The wellness business has always been a breeding ground for online scams, and AI is supercharging the problem.

Between the lines: Most ads using generative AI to spoof endorsements would be subject to false commercialization penalties by the Federal Trade Commission.

  • But the technology's capabilities and scale are advancing so fast, it's hard for regulators to catch bad actors and stop them in real time.
  • The FTC proposed new protections to combat AI-created impersonations of individuals in February. Those rules would extend existing measures meant to protect government agencies and businesses.

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8. ⚽ 1 fun thing: Women's sports surge

Active U.S. professional women's sports teams, by start year
Data: Axios research. (Includes future teams with confirmed start dates.) Chart: Simran Parwani/Axios

At least 20 professional women's sports teams will play their inaugural season in 2024.

  • Why it matters: It's a historic time for viewership and engagement in women's sports. Investors are taking notice.

Between the lines: Women's sports fans have higher engagement rates than men's sports fans, according to research by PricewaterhouseCoopers.

Go deeper: More from TN50 β€” Axios' women's sports editorial vertical