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Thank you so much to Beehiiv for their support. Welcome to the Rebooting show. I am Brian Morrissey. I am joined by Alison Murphy, the COO of Axios.
We're gonna talk, it's five years, believe it or not, of Axios Local and believe. Is that right? Yes. Five. And we're gonna talk about that. We're gonna talk about AI and what's working.
I always like to ask people what's working. So let's start there, actually, Alison. What's working in Axios? Specifically in AI or just, like, generally- No, just what's working in the business. I'm really... I'm open.
[chuckles] One of the things that's still working, and it, it's not a new thing, it's a still, and it's encouraging, is if you have fantastic journalists who know an audience and know their subject, people want and need that, and they will find a connection.
And we see that certainly in our national portfolio, but where I love to see it is with our local journalists, where we say, "You fall into one of two camps.
Either you have never heard of Axios Local, or you can name your reporter and, like, five things about them [chuckles] in your city" because you feel such a deep connection to the reporting they're doing, and you get so much value from it.
And I think at a moment in media when there are lots of uncertainties, and we don't know what will happen with distribution and monetization, the fact that there is clearly still need among readers and communities for the work that our team does is encouraging.
Okay, so that would be, like, engagement. But let's talk about the actual money. Okay. I mean, this sounds nice- Yeah... but, like, come on. Other things that are working.
Um [chuckles] People will send me angry emails when I go, like [chuckles] Well, page views. Yeah. Well, people like journalism. Yeah, they...
Well, I, well, I, I love feedback, and, like, again, it is like, "Oh, you should have pushed back on them." So, like, what, what, what is working in the business? Yeah. Events are definitely working for us. Okay.
Especially at a national level. There is, uh, huge growth happening for us, and, and that includes from an audience standpoint of people wanting to, to show up and find value at these.
But the, the brand interest and the level of, like, editorial we can do in the room, events are booming. On a local level, we are seeing a lot of growth with our, our memberships business, and that is...
At this point, it's really saying, like, "Do you like what you're doing? Do you wanna support it?" There's not a, a deep benefits package. It's just like, "Do you like what we're up to?"
And we, in February, had our best month ever in terms of revenue with that. Over fifteen thousand people paying for Axios Local just because we asked.
So on kind of both sides of the spectrum of, of individuals finding value and also new ways that brands and advertisers are working with us, we're seeing good things in both of those places.
And, you know, our ad business is still, still doing well. We're hitting the numbers we wanna hit. Okay. Well, that's good news. So let's talk about the state of...
And I wanna, I wanna sort of interweave in AI with, with local, right? Because I think the way the sort of local news challenge gets solved is inextricably entwined with AI.
But five years in, just give us an overview of the state of, of Axios Local. Yeah. So we are, we're in thirty-five communities now, many of which are the largest metro areas in the country.
We'll be in forty-three by the end of the year. And right now, we're in these mostly larger cities, but the big change this past year has been building more to the larger suburbs and, like, exurbs around those.
So, for instance, Denver is one of our original markets. It's very successful. We've added Boulder, Colorado Springs, and we're adding Douglas and Arapahoe Counties.
So really figuring out how can we add a next level of depth to that reporting and also hopefully serve more of those specific communities, which are still very large communities. Mm-hmm.
So we, we feel like we've figured out the lightweight model where you have two, sometimes three reporters in a large city. Now, what we're figuring out is, can it work with one reporter?
Can we have someone cover a couple counties? Can the product still be as good? And is that a way that over time we can reach more and more communities in America? So you... So it's, like, two to three.
So, like, three is the max. 'Cause, like, look- Three's the max... Iowa sucks. You gotta do more with less. I mean- Yeah... I have a lean operation myself, but I'm not covering, like, an entire [chuckles] urban area.
I'm not even reporting. So it's a lot. It is a lot. Right? And I think, you know, what we saw with... Look, the local news business ha- had a cost problem, right? The... It, this...
The cost structures did not supportWhere the business opportunity was in local once the- Correct... sort of monopoly went away. And a lot of existing...
I just did a, a podcast that came out yesterday with Lisa Hughes from the Philadelphia Inquirer, and- Yeah... the Inquirer's been through, through a wringer. I know.
I mean, I grew, I, I grew up with the Inquirer literally, and, you know, it's, it's finally... its revenue grew for the first time- Mm-hmm... in about 20-plus years.
And they had to get the costs, the cost structure right, and they've also been expanding into the suburbs, right? So you gotta do different things.
Talk to me about the sort of cost structure and how AI can help with that and how you're using it. Yeah. So as we said, the, the core, you're always gonna have a reporter there and on the ground.
What we're looking at is what's the right, right way to make it so that reporter is able to put the vast majority of their time into finding the stories our readers want. And so that's a productivity play, right? Mm-hmm.
And how are we using technology to find, surface, generate content that we know is gonna be really useful for readers, and that's what we're working on kind of next and now. So a couple examples of that.
You know, in terms of things that our reporters can use now, we're...
we've got all kinds of different bots and Slack bots and, and custom GPTs that are helping surface story ideas, aggregate events that are going on, pull together...
You know, we do story roundups, right, which are a thing our readers love.
They love to see here's what my Axios Local reporter is reading, three things that they read that they liked, and, like, what makes them interesting.
Well, instead of our reporters having to spend an hour looking through and finding, "Here are the things I might wanna pull from," we can now generate that, bring it to them, and they're able to very quickly pick through it instead of searching the internet.
So a lot of those things help from a productivity standpoint.
From the content piece, we already do a lot of, for instance, data journalism where we, with a human team right now, take national data sets on schools or restaurants or inflation, and we're taking them and we're saying, "All right.
Let's pull out our 35 cities. Let's pull the data together. Let's pull the chart together. Let's push this to the reporter."
If they think that it's interesting and newsworthy, they can pick it up, supplement it with sourcing, you know, obviously change, amend, add to the content that, that we've provided, and bring it to their audience.
Now, the first 90% of that process we can do with technology, [chuckles] right? We've got the data set. It can, can create the chart. It can create an initial smart brevity summary.
Again, this is all always going to go through the reporter on the ground. This is not, you know, straight from machine to reader. That's not what we do.
But we're now even saying, like, "Okay, how can we surface the right versions of these stories?"
So maybe we're only pushing something to a city where it was in the top or the bottom 10% of the data, so it's more likely to be of interest to that reporter.
So that's a place where we're, we're increasing the amount of, of quality, useful content for a community that we can bring by using, you know, a, a, a pipe of technology and AI. Hmm.
Have, have you done an analysis o-on... Like, I assume every market is not profitable yet. Like, whether this can get- They're not...
every, every, every market to profitability in that, like, you know, eh, I don't wanna like ov-belabor the cost thing, but, like, the reality of local is you have to get the cost structure right. Yes. And we've seen...
Like, newsletters were looked at as, okay, this is a great way to, to be able to do local but not have all the cost bases of having trucks and the rest of, rest of it. Some of those models have not done great.
You know, 6:00 AM City, you know, just had a bunch of cuts. I think getting the right shape of the team is difficult. How can... How much cost can be taken out through, like, the use of AI and related technology? Yeah.
We're, we're now at a important inflection point where we've made the investments so that our incremental cost per city has gotten incredibly low.
So the interesting thing about being at, like, 25 or 30 is you're big enough that you have to have spent the money on tech. You have to have an editing infrastructure. Mm-hmm. You have to have a sales infrastructure.
And that's all centralized obviously. And that... Oh, yes. Yeah. Exactly. And so now- Not obviously...
now most of these places, you know, like, obviously I spend a bunch of my time with the, the P&L, most of these places we're saying, "Okay, it's the cost of the reporter." Right? Like, we've got the tech.
We have a sales infrastructure. And so that marginal cost has become very, very low for the new cities that we open. And that's what we want it to look like, is that
pretty much the additional cost is the reporter and then, you know, for every however many cities or so you might be adding some sales capacity or an editor, but for the most part, the, the cost of additional city is low.
Now, that core though, like running a 35-city operation, like, there is expense in building the kind of technology I'm talking about, having a sales team, but, but we knew that that would be the case.
So part of our play is that scale has to be part of how we succeed- Yeah... because that's when you can realize the, you know, the benefits of scale. It sounds kind of obvious [chuckles] when you put it that way.
But, but the technology is not worth building if it's only for 10 places. It's worth- Yeah. I mean, I've heard that- Yeah... w- on this but also with, like, restaurants. Like, operating one restaurant- Absolutely.
You-... is, like, really impossible these days... it's, it's practically impossible. Yeah.
The other thing that it's opened, to your question of what works, is from a revenue standpointThe most expensive local revenue to bring in is local sales, right? Like in city. You have to have a boot...
You gotta get boots on the ground who know your small and medium-sized businesses. Yeah. Knocking on the door of pizza parlors- Right... and stuff. That is really, really hard.
Because we have scale and because we have the Axios brand overall, right now we make a lot of advertising money from national brands and from regional and multi-city buys. We only get that because we're in 35 places.
35, going to 44, and more beyond that, which means we can attract buyers who want to be in multiple places. Yeah.
So we still want and are pursuing money from within an individual location, but we can get much larger deals by virtue of having that network. Yeah.
I had spoken with Jacqueline Cameron, the CRO at Axios, about this, and, and it seems like the, the strategy is really... It's more to, like, localize, like, national and regional. Yes.
You're not, you're not going for the, the local pizza parlor. Not the local pizza place. We do think there is- They still call it pizza parlors? Yeah. I don't think they are.
[laughs] You know, there is the part of local local, as we call it, 'cause that's original. Yeah. Local local, in city, that is important because,
yes, we have a portfolio, and we maybe don't expect the exact same profitability everywhere, but even with very low incremental costs, you know, if we have a reporter in a, in a smaller community, we still want that, the economics of that community to be able to at least support the reporter we've put there.
So, so there is a part of the revenue that we need to scale in every geography, and that is within the city.
But by having our broader scale and by being able to have those national and regional dollars, it's given us some runway to figure out the leanest possible way to go after those, those local local dollars and, and hopefully get that to a, a good, like, economic equation.
Yeah. So you talk about local local. I mean, is this like a business business, or is this like a mission business? It's a business business. Okay.
[laughs] Because back to your point, the, the reason there is a- But there's nothing wrong with, you know- No... a mission business. This is, this is a business business. Okay. Good. It is a business business.
Very much has to be a business business because you said it, the reason local journalism is collapsing is an, it's an economic and a business model problem.
If we want to have sustained presence serving these communities, the business has to work, and that's not just Axios Local. This is something that, you know, Jim and Mike and Roy talked about when they founded Axios.
Like, we don't believe in media businesses that are not businesses. Right. Jim VandeHei r- uh, just had a, a, a memo that went out. Yeah, he's, he's great at memos 'cause- Yes... he's, he's a great writer. Manifestos.
I don't know who would be. Brian, we, we call them manifestos. [laughs] Okay. Manifestos, memos, whatever you wanna call it. A- and you know, he talked about...
Something that stood out to me is, is about being the most useful news organization. Mm-hmm. And I thought that was an interesting use of words 'cause you don't normally hear that in capital J journalism circles, right?
And like, I had Dmitry Shishkin on this podcast. We were talking about, you know, user needs and news, and really it comes down to news as a utility. Like, I think sometimes
maybe in the profession we sort of romanticize a lot of stuff, but like, ultimately, you're making a product and it has to be useful to people. It has to solve a problem.
What, what's the problem that like, that Axios Local solves for people on the local level? I mean, it's not- Yeah... trying to replace... Here in Miami, it's not trying to replace the "Miami Herald" I don't think. No.
No. We want to be the one thing you can open in the morning, and if you are a smart professional in Miami, it's gonna tell you the most important things you need and want to know.
And that doesn't mean it's only politics. It doesn't mean it's only lifestyle. It means you open it, and you, you get a little bit of all the things you need, and that's some of the fun stuff.
It's some of the hard-hitting stuff. If you're reading it every day, you are gonna know the biggest story that's happening. No, you won't know every story, but that's not what we're trying to do.
We're trying to be that one place that you can open. Mm-hmm. And that's, that's also why our local newsletters look pretty different from our national ones, [laughs] you know?
If you read Hill Leaders or, uh, or, you know, our beloved Media Trends, like that is very different from what Axios Miami looks like because it's m- it's meeting a different purpose. That's also- Yeah...
part of the different things with the technology and with AI. Explain that more. Meaning there is a...
You know, most of our national newsletters are very industry and subject specific, and they depend on a very deep understanding of that industry.
Besides you, Brian, who knows as much about the media industry as Sarah Fisher, right? Like you're going because these are people who can be guides to what's happening in a very specific area.
Our local reporters are experts in their cities, right?
So you're, you're talking about an array of different subjects, and that means we can bring lots of different sources of information to bear, like all the data sources that I talked about before. Yeah.
Like, we can say, "Hey, here's data on schools, on restaurants, on inflation. You, Miami reporter, what do you think actually makes the most sense in your city?
You pick," because that curation and that framing and filter is a big part of the value you provide.
So by, by AI, by being able to make a lot more types of information available, our reporters can play that role of saying, "Here's what matters to my community," in a different kind of way.
How important is, is original reporting to this model versus call it curation, call it aggregation? Whatever, whatever term we're going to use.
I mean, I think, you know, in talking with others, I know just over the years with Axios Local, I'd-I'd hear, "Wow, they're, it's, it's, it's agg- it's an aggregation newsletter. You can have one person." Okay, great.
But you're not, you're not breaking the corrupt city council story. Yeah. So I, I think that's a little bit of a false dichotomy [chuckles] you know?
Like, I don't think you have to be, uh, breaking every single investigation to have value to readers. Back to Jim's point about utility- Mm-hmm...
like, we are trying to be useful, and we're guided by our readers in that, and sometimes we are breaking those scoops. There will always be original journalism at the center, and that is important for a lot of reasons.
One, because of pieces like you just described, where we are breaking news, because these are seasoned, experienced, well-sourced journalists. But even in... let's take the data examples I gave.
People don't wanna see a chart on a restaurant.
They wanna see what's going on with restaurants, and then let me hear from the person who owns the pizza place down the way, or let me hear from the city council and what they're doing, because half of my favorite restaurants closed.
So these aren't stories that we're just pushing out and, "Hey, here's a chart." They're ones that our reporters are first saying, "This is relevant.
I know this is relevant based on me understanding this city, and I'm now taking this piece of data, and I'm saying, how do I bring more color to it?
How do I bring more fact-based, more perspective to it so that it's more useful to this reader?" And even the aggregation or the roundups that we do, there's a curation to them.
They connect with the overall product, and I think just inherently, we don't... I don't know, we don't have a problem with pointing to other really helpful news you might wanna see that you wouldn't otherwise find.
That feels useful. And yes, it's a part of the mix, but it's not the predominant part of what we're creating. Yeah. I'm wondering, is, is there, like, an ideal percentage, right, between...
You know, and, and look, I, it, it is all about utility and providing utility and having, like, one place, you know, to... I think one of the problems of local news was, was that most...
First of all, I think that a lot of it, like, went far afield for what was useful to, to people's everyday lives. It didn't really resonate with what people were most concerned about. Mm-hmm.
A lot of the coverage was very worthy, but it wasn't additive necessarily. At least people in the market clearly didn't find it additive to their lives, [chuckles] otherwise they wouldn't be unsu- Yeah...
unsubscribing in droves. So I, I don't think it ha- But is there, is there, like, an ideal between, like, aggregation and, and, and original? There probably is. You know, [chuckles] and I'd say there's...
Over time, maybe we'll have a mathematical answer to that as, you know, we have more in our systems. But we already know we've achieved a pretty good mix because we see it in our retention and our open rates, right?
So, like, readers are liking and are, are voting with their feet or, you know, with their inboxes. I think if you look at a typical Axios Local, local newsletter, there's usually five or six items, we call them cards.
You're gonna see that the majority of those are originally reported work or something where the reporter has added significant- Yeah... expertise into it, like the data stories that I said.
You know, if it's five pieces, three or four of those [chuckles] are going to be pretty substantive. The other piece might be something that's aggregated or curated.
It might also be something that is a little bit fun, like surfacing an ask to readers to, to share stories or share photos.
You know, that, that is something that's engaging with the community, or a, a photo to go from an event. So is it, is it something that is, you know, deeply reported city council news?
No, but it's still useful to the audience, and it is still really tied to the perspective and the understanding of the community and the readership that the, that the reporter brings. So,
you know, we don't believe commodity, general reporting or content, or whatever you wanna call it- Mm-hmm...
is useful, or that it's gonna have longevity [chuckles] or that it will work for readers or a business, so that's not a, a balance we'd ever tilt towards.
But I think if you, if you open up the newsletters and you look across a week and look at the 30 or 35 items that appear, you'll see that the, the majority is very much coming from the minds and the, the expertise of that reporter.
Okay. I'll have to send in my photo of a guy at, in an acai bowl place yesterday taking down an iguana that invaded. That's a good local story. You know, you... It is an, it is a good [chuckles] local story. We had...
I, I, I think I'm correct that our Richmond reporters are the ones who broke the story of the raccoon who broke into the liquor store and was found- Feels like the staple of local news, you know? Like- You need it.
You need it... local TV news. And, and, like, we can laugh, but people want that. It goes back to- They love the animal stories... Gallant- The, the- You know, saying we must have one, one thing...
water skiing squirrels were, were always there. [laughs] Everyone loves an animal story. Yeah. So ha- so I guess now that you have, like, a formula, like, is there...
Is it just about finding the right l- the, the right locations and that, that, that...
Because I mean, there are cost advantages, clearly, once you centralize the operations and once you have a formula of, you know, being able to do it, like, repeatably, right? Yeah. Like, I mean, a lot...
I've gone to a lot of Axios Local, and like, y- there's trade-offs to things, you know? It's like, okay, this is like, you know, it's, it's templatized to some degree, but you have to operate within the template.
I mean, that's the Axios model somewhat. There's pluses and minuses, but, like, it's scalable. Yes. We do feel like we have the model.
The reason we haven'tGone to a hundred more places this year, although in the, in the not too distant future, we, we wanna have another, like, big surge growth moment, and it's in sight.
There's two reasons-- two things we're solving for.
One is we wanna really fully build out the tech that I've been describing so that all the, all the next wave of reporters we bring in, that they're able to, like, have this tooling available from the get-go.
The other thing is, as I mentioned, our initial cities are the large metro areas.
That covers a lot of America, but, you know, the next hundred places look way less like Chicago than they do maybe Colorado Springs or, like, Arapahoe County.
So the work we're doing this year to say what does it look like to create a product for a big but smaller geography? Does that take one reporter, two reporters?
That is really important because the next set of places we go will be smaller and more diverse in nature, and we wanna know that we've got a few different staffing and product models that we're really confident in, you know, before we go to them.
So let's talk a little bit about the contribution model. I mean, you've gotten a lot of people to contribute.
I m- and, and like you said, like, just going to, you know, the, the page, it, it-- there aren't-- it's not like a transaction. It is, it is become a member. It is how much would you like to contribute?
It, it has a dropdown, starts at twenty-five, goes up to five hundred a year. And this has been successful in pockets. I mean, The Guardian has been very successful at this.
Right now, and historically, we have not put a whole lot of emphasis on that part of the business just because we've had- Mm-hmm... bigger things to prove and accomplish [chuckles] local journalism as a whole.
There's a, there is a very vague promise of birthday shout-outs. It said we may. There are. So you know [laughs] And hey, it exists. I got mine. I got mine on Monday. I opened up, I saw my birthday shout-out in DC.
You do. Right now it is, do you value this? We have quite a number of plans for this year to start to test some different benefits. There's also a lot we're doing just to improve the marketing of it.
So this seems like a small thing, but late last year, we introduced the twenty-five dollar tier. It used to be fifty was, was the minimum. Mm-hmm.
And that opened up quite a lot of volume that more than made up for the change in price.
So there's still what I'd call just some fundamentals of subscription marketing that we're putting in place that hasn't been as big a part of Axios' model historically.
So we, we see a lot of running room just in bringing this, this kind of fledgling business kinda up to code with the basics of a contribution model.
And then we also see ways we can, can bring in benefits that people really enjoy. We already have reporters who love to do the occasional event where they meet up with readers.
We have reporters who would love to do special sends. We've thought about things like podcasts or videos or things that are member-only, but, but that we could stand up in multiple places.
So I think there's so much running room for that business, and we're now at a point where we're able to put some more business attention on it, which just, like, wasn't the case for the last few years. Mm.
So, uh, my hope, and what I think is possible, is that that business could be material in our overall revenue mix, and that to me means twenty to thirty percent over time.
And in some cities, I think we will also see that a more mature membership business or contribution model, whatever you wanna call it, could be more significant than the ad side.
There are markets we're in already where there is intensely, fiercely loyal readership, but they're maybe not the best ad markets.
So I think having these multiple streams of, of both kind of local local revenue, regional and national revenue, and the membership model gives us some different mixes that will help us be successful in, you know, a variety of types of communities.
Yeah. Let's flip over to the, the national side for a little bit. I feel like you guys have done a really good job along that continuum of, of institutions and individuals, right?
Like, uh, it, that, you know, obviously Axios is, is a well-known brand and the umbrella brand, and it's, it's very identifiable, the smart brevity. And at the same time, like you, you have voices, right?
Like Sarah and Dan Primack, like, and, and... So talk to me a little bit about how that strategy has matured. Yeah.
I think because of the newsletter format, we have always as a company had to be comfortable with the idea that there are individuals, there are individual expert reporters fueling our brand and our business and whatever value it is that we bring to audiences.
And I think if you're a, a more of a traditional newsroom, that's a, maybe a harder thing to come to grips with.
But the nature of our product early on forced us to acknowledge and build around that you're gonna have some really special people that, that you depend on and that your business is based on.
What we've gotten better at is saying, "Okay, well, let's find more of them," and what do, what does a, a successful space look like that makes sense for a product and where we can build and see the potential for that voice to have a really high quality core product of newsletter, but also event potential, maybe subscription potential.
Is this someone who is out and about in this industry in a way that makes them influential and a voice worth listening to?
So we've, we've started thinking-And we're deliberately in that way of like these areas as a franchise and we're seeing a lot of success with that. Obviously, our AI Plus franchise, we just did a three-day-long event.
We've like tripled the events [chuckles] around that, and there's no shortage of demand but we also, you know, a year and a half ago launched Future of Defense, and Colin, who writes that, you know, has built an incredible list and, and a community and an event series around that as well.
So we've gone from saying, you know, "Do you bring the expertise to find the scoop and to bring the information no one else has?" And that's what Dan and Sarah originated with to, "All right.
Do you also have enough of a point of view that you know how to balance with fact-based reporting?" Because that balance is really critical. Like we're not- Mm-hmm... we're not looking for columnists, right?
[chuckles] Mm-hmm. We're looking for expert reporters, and those aren't the same thing. So, so can you bring that balance? Do you have the interest and the ability to also be part of building out a multifaceted business?
And in exchange, we're gonna help you build your own name to be as big as it can be, and we're building a lot of supports around, supports and, and benches around these folks.
You probably know Carrie, who also works on media trends with Sarah, who's fantastic. She's still on my team. I- Yeah, exactly. Of course I know her. [laughs] She's... Yeah. That's... How did I forget that?
So, you know, she's, she's with us now. Sorry, Brian. Yeah, she is. [laughs] But sh- but we're- That's okay. She, she, she had a stop off, I think, uh- Yeah... she went after us, so. She, she, she...
We, we, we were here to, to make her even, even bigger. So we're, we're now saying, "Okay, how do we round out these areas? How do we have multiple fantastic stars that we can build around?
What supports do they need in, you know, event production, in, in even things like administrative support?"
Like, you can't ask a, a reporter to be writing a daily or weekly newsletter and hosting events and doing special things for subscribers, you know, and not give them some help to do so. [laughs] So- [laughs]...
those, those are the thing... That's the main evolution, I think, is how do we go from a fantastic reporter who can carry a newsletter into how do we find the folks who can do that and also, you know, anchor a franchise.
You understand that better than most, I think.
Well, when you were saying, "You can't ask someone to do all these things," I'm like, "You know, you kinda can," but yeah- You can, but it's less- Like I have, I have no one to blame. That's the thing.
[chuckles] I got nobody to blame. I'm like party planning. I'm like doing all kinds of different things. It's, it's great. I love it. But are newsletters as important to the model as they were?
Like, I mean, newsletters are always like the core of it, and I'm... I write a newsletter. I believe in newsletters. This podcast is sponsored by a newsletter platform.
However, I do believe in like m- being multimodal, and it's not like Axios only does newsletters, right? Like, but look, people have been asking about like...
I, I think they've been asking about peak, peak email since email like started. Yeah. However, [laughs] it does feel like there's a lot of email newsletters.
I mean, I just look in the media space and I'm like, "My God, there's a lot of them." There, there are so many. There are so many.
I mean, for a business that I keep reading is dying, I'm like, there's like 19 media newsletters, and they're all very good. Well, that, that's what always happens before the end, right, Brian? [laughs] I don't know.
When I hear like peak newsletter, I, I... You know, whatever.
Most of the, the surge ends up not being the highest quality and highest value options that are out there, so even if there's been a peak, even if we're, we're down from a peak as an industry, let me look at podcasts.
Like, yes, absolutely, there was big podcast bubble and it came back down, but there's still much more than there was when it all began, right? So there's still, I think, space for...
There's always gonna be space for really, really, really high-quality products on any channel or distribution. Are they less important for us now? I mean,
the core of what we do is always gonna be reporting, so newsletters are always gonna be at the center. But I, uh... we are adding other things, so just kinda law of how math works.
[laughs] That, that means that if other things are also important, something has to become slightly less important. So yeah, by...
if, if we're thinking like objectively that way, yeah, newsletters have lost some importance because we're, we're doing other things that matter now too. But they are still our core. We still expect them to be our core.
They are still our huge driver of revenue for us, and we know that they are providing the most value of anything we offer to our readers.
But I'll also say this is, you know, this is one of the things that's, that's a little bit tough because we, even in local, we have reporters who initially the job description was come in, write a daily newsletter, and that in itself is pretty hard if it's just you and one other person, right?
Yeah. Like that other person is out sick and now it's you, and we've had to build ways to, to manage that. But now that's not all we're asking.
Now we're saying, you know, "We really need you to be engaged in the community. We need you doing media hits. We need you more present on social." Like, all of these things that, that we know matter.
We've backed that up by creating other kinds of supports and tools for productivity, right?
So we're always giving something when we say we, we now need this other thing as well, but it would be really shortsighted of us to assume and only imagine a world where newsletters are the only place that you can find Axios.
Right. So what other areas are you betting on? I mean, you have the Axios show- Mm-hmm... which you, you, you started. Like, I mean, 'cause I always think like, you know, newsletters are the core, right?
But then you ultimately have to be multimodal. You guys were doing podcasts for a little bit. I don't think you still are. There, there was like some short podcasts.
It took the Smart Brevity and I'm like, talk about like opposite. I mean, podcasts are super long now.I always thought that they would go short, but- Yeah...
I think people ho- honestly, with this podcast, they're, they're intently listening and taking notes. But I think a lot of other podcasts, you know, people are... They're ambient.
[chuckles] That's not necessarily bad- No... although I don't think that's what makes sense for- I listen to podcasts before I go to sleep. Yeah. Absol- I mean, I have a whole- Not this one...
feed of true crime that I hate to think what it's doing in my, in my ambient background to my mind. But it's a, it's a little bit different for every platform, right?
So in terms of the Axios Show, you know, we, we had Axios on HBO, which was very successful. We did some different forays with Scripted. We now have the Axios Show.
I think we know that there's a lot of brand potential, and there's a way to bring stories to life with, with that type of video work. It's also a fickle market, [chuckles] you know?
Like, who's interested, who's buying, who wants to fund that kind of work, and it's expensive work changes.
So I think that's something where we are always going to be open to the opportunity, but it's a bit more opportunistic. Where I think we have more strategic, like, okay, what's the right way into this and how do we grow?
We're doing some new things on YouTube. As I said, we're doing some new things in local on social, and this is...
None of it would be groundbreaking for most publishers, but we have such a strong core product and newsletter that we have a little bit of the luxury of learning from what everyone else has done and what works and what doesn't as we're, we're growing on some of these other platforms.
Hmm. I was gonna say, we also now are thinking kinda automation first. So where do we see places that we can scale where a lot of the production and a lot of the hard cost,
we think it's gonna get cheaper and cheaper and cheaper so that we can make the best use of the, like, human reporting talent we bring into play, and, like, audio may be one of those spaces. You know?
Like, I'm looking and I'm thinking like, okay, right now, AI-based podcasts are, eh, it's... They're not great yet. You mean, like, read by an AI person? Yeah. Well, re- if they're just- Or-...
read, that's fine, but, like, ones where it's...
So let's imagine, for instance, we get to a point where there's a product that's good enough that can take the last week of reporting from Axios Miami, and maybe it can do a five-minute- Oh, yeah, sure...
news brief for you, right? And, like, we don't even have to be involved, or there's very little human oversight of it. We've looked at these products now, and they're not good enough for us yet. They're a little weird.
There's a couple actually- They're a little-... we wanna try... right. They're a little weird. They're a little weird. If they get good enough, that could be really cool. They're not there yet. Maybe they will never be.
No. I think the first time you listen to, like, y-you use, like, NotebookLM or something, you're like, "Oh my God," and then you start to realize that it quickly becomes like AI writing, where you can- Yes...
identify it immediately, and then it's like- And you zone out... it becomes very grating. And it always seems to mispronounce a very common word. You know? Like it will, it will nail- I do that all the time... right.
But it w- it will nail really complicated words, and then it will, you know, pronounce laptop with some strange accent. Final thing is, is you guys had a few cuts. Everyone, everyone is trimming here and there.
These, these organizations of all kinds need to be reshaped for... You know, because of, of these technological advances- Yeah... they just do. And news is a difficult business. It's just how it goes.
That said, how do you think about, like, the shape of the organization with doing more with less with, with AI and different, different technologies? Yeah. Well, that's a big question, Brian.
[chuckles] We, we got seven minutes. It's fine. We're... We think very specifically here. So, like, even the most recent changes we made, it... These are not, like, broad scale cuts at all.
They're very specific around, like, a couple teams where we say, "All right, our approach and our strategy has changed."
Sometimes that's related to what technology can do, and sometimes it is because of the strategy, right? Yeah.
And, and as you said, like, in a transforming business, sometimes you stop doing things, and we look and we'll say, "Is there any other way we can use these great employees and put their talents to work?"
And if not, uh, you're just in that really unfortunate but essential space where you have to, you have to part ways. We think about technology in, in different timeframes, but always, as I said, in that specific way.
So we're not saying like, "Oh, well, we think technology is gonna make us 10% more efficient, therefore let's plan 10% less cost for next year." No.
Sh- We're doing all of our thinking about technology within team and department levels. So we have and are developing plans for every department that's helping say, what do we think we can accelerate?
What can we make more efficient? What's possible in six months, 12 months, 18 months? What can be done by those teams themselves with some of the tools that exist now? And that's really exciting.
What is something that we're gonna need the tech team to support, and so it has to go in a roadmap?
So there is this, you know, pretty complex roadmap really underpinning our whole company strategy now that's, that's a layer that didn't exist before [chuckles] which is like, what do we think AI and automation's gonna do, and what, what timeframe will it move along?
So- Yeah... yeah. I, I think what I end up wondering is whether these organizations, like, the, the share... I might be biased here, but do the share of journalists go up? You know, like, 'cause I- Yeah...
feel like, you know- Oh, I do too... we talk a lot about AI. I know, look, everyone is valuable in the publishing organization. I don't mean this as a...
'Cause like, you know, it's like when journalists write about, like, layoffs, they're like, "How many journalists were laid off?" And it's like, "Well, the newsroom only had so many."
I'm like, these are other people, like, just the same as you. Like, what are you talking about? Yeah. They're not, like, less valuable. Yeah. And the publishing function is far beyond just the reporting.
That's just the reality of it. However-A lot of publishing businesses are, they're inefficient by the metrics with the number of people it takes to produce the amount of revenue that they produce.
I mean, the numbers just don't work in a lot of these organizations. Yeah. And a lot of this is the cost in these organizations, and fortunately or unfortunately, is in, is, is, is in people.
So applying software to s- to, to do some of these things, not to write the stories makes a lot of sense, obviously. Yeah. To be very direct, yes.
The, the proportion of our employee base who are reporters versus other roles will be higher. I mean, just think about what I said in local. Mm-hmm. We're at this point to have a new city, we don't need another engineer.
We don't need another ed- you know, like, we need a reporter.
And even in the changes we just make- made, which were a little bit more around national, it was in areas that, that are, are more related to the production of the all-around product.
And even when we think, like at a company level, like one of the teams that's leading the way for us in, in automation is our finance department, who's doing really, really cool things.
It's already not a huge department for us, but like, what they've been able to automate and build, like, it's incredible.
Which means if we were to add another hundred cities, we don't need a bigger finance team [chuckles]. It's actually like, that's meaningful.
All of, all of those structural operational costs add up, and I think, you know, Jim has done a great job at leading us to say, including in the newsroom- Mm-hmm...
like, "Look, just because we are used to always having had a breaking news desk, do, do we actually need that anymore?
Just because we've always had to have, you know, whatever kind of roles in any department, we need to really push ourselves to say, 'Do we have to have that in that way? How is it going to change?'"
And I do think, like, we've really embodied that at this point at the company, and now is the hard part of figuring out how do you make those changes?
How do you do it in a way that sustains the business you're in while you pivot to the one [chuckles] that you're gonna be in? Yeah. And also
keeps us being a great place to work where people wanna build careers and, you know, aren't living in, in constant fear that they're not valued or their work isn't valued.
So it's not easy, but we just try to be as transparent as possible about everything we're thinking about and, and where we think the opportunities are. Cool. Elsa, thank you so much for taking the time. Thank you.
Really great chat. [outro music]