Axios Pro: Media Deals

April 14, 2022

Axios Pro Exclusive Content

🚨 Situational awareness: Elon Musk launched a $43 billion hostile takeover of Twitter. He offered to buy the company for $54.20 a share in cash with a "best and final" offer, per SEC docs. Twitter's board will now review the proposal. Go deeper.

💭 Kerry's thought bubble: When I began reporting on Twitter seven years ago, the narrative was it was struggling to grow its user base, to make money, to innovate its product. But in recent years, it's turned profitable and made big changes including long-form content, live audio, and paid products. Yet yesterday's close of $45.85 was 95 cents higher than it closed on its first day of trading in 2013.

My question: What does Musk actually want to change at Twitter, whether it's private or public?

1 big thing: Tech for newsletters

Illustration of a fountain pen with a pixelated paper airplane as the nib.
Illustration: Aïda Amer/Axios

The newsletter business is not waning.

Why it matters: We're admittedly biased on the power of newsletters. But tech products supporting the industry keep growing, and media companies continue investing.

Driving the news: A recent New York Times story on Substack highlighted some data on the platform's growing business.

  • Substack's vice president of communications Lulu Cheng Meservey shared in a Twitter thread taking issue with the Times piece that the team has grown ninefold.
  • But it's not just Substack. Newsletter products are available across Twitter, LinkedIn and Facebook, the Times noted. Publishers like Axios (obviously), Forbes, The Atlantic and the Times also have invested in growing new newsletter offerings.
  • "The only thing worse than being copied is not being copied," Substack CEO Chris Best told the Times.
  • Substack announced in November it has more than 1 million subscribers. That's up from 50,000 in mid-2019, per the Times.

Yes, but: Substack did not disclose how many subscribers are free versus paid.

State of play: Newsletters aren't new products, but they've gained renewed attention.

  • Kerry moderated a panel yesterday featuring Front Office Sports CEO Adam White, Workweek COO Becca Sherman and 1440 Media CEO Tim Huelskamp about their newsletter businesses.
  • White says FOS put more attention on newsletters early in the pandemic and has since seen waves in consumer interest, with its newsletters close to reaching 1 million "active" subscribers.
  • Sherman, who was an early employee of the business newsletter The Hustle, says new tools have made it "so easy" to start newsletters and turn them into a business, whereas before her team was "piecing together dashboards."
  • "What's nice is there's more technology out there than ever before," White says.
  • All three executives spoke highly of beehiiv, a tech platform that provides tools for creating and monetizing newsletters.

What we're watching: Substack execs told the Times it hopes to take the company public. It raised $65 million in Series B funding in March 2021, valuing it at around $650 million.

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