Atlantic's new digital venture named Quartz is aimed at global business people. It innovates in many radical ways, but its business model remains dicey.
Two years ago, Atlantic Media's president Justin Smith was interviewed by the New York Times. The piece focused on the digital strategy he successfully executed:
"We imagined ourselves as a Silicon Valley venture-backed startup whose mission was to attack and disrupt The Atlantic. In essence, we brainstormed the question: What would we do if the goal was to aggressively cannibalize ourselves?"
In most media companies, that kind of statement would have launched a volley of rotten tomatoes. Atlantic's disruptive strategy gave birth to a new offspring: Quartz (URL: qz.com), launched a couple of weeks ago.
Quartz is a fairly light operation based in New York and headed by Kevin Delaney, a former managing editor at the WSJ.com. Its staff of 25 was pulled together from great brands in business journalism: Bloomberg, The Wall Street Journal, The Economist and the New York Times. According to the site's official introduction, this is a team with a record of reporting in 119 countries and speaking 19 languages. Not exactly your regular gang of digital serfs or unpaid contributors that most digital pure players are built on.
This professional maturity, along with the backing of the Atlantic Media Company, a 155 years-old organization, might explain the set of rather radical options that makes Quartz so interesting.
Here are a few:
Priority on mobile use. Quartz is the first of its kind to deliberately reverse the old hierarchy: first, traditional web (for PC), and mobile interfaces, second. This is becoming a big digital publishing debate as many of us strongly believe we should go for mobile first and design our services accordingly (I fall in that category).
Quartz founders mentioned market research showing their main target -- people on the road interested in global economy -- uses 4.21 mobiles devices on average (I love those decimals...): one laptop, one iPad, and two (!) Blackberrys. (Based on multiple observations, I'd rather say, one BB and one iPhone.)
No native mobile app. Similarly, Quartz went for an open HTML5 design instead of apps. We went through this before in the Monday Note. Apps are mandatory for CPU intensive features such as heavy graphics, 3D rendering and games. For news, HTML5 -- as messy as it is -- does the job just fine. In addition, Quartz relies on "responsive design", one that allows a web site to dynamically morph in response to the specific connected device (captures are not to scale):
Here is how it looks on a desktop screen:
... on an iPad in landscape mode:
...on an iPad in portrait mode:
on a small tablet:
..on an iPhone:
and on a small phone:
(I used Matt Kerlsey Responsive Design Test Site to capture Quartz renderings, it's an excellent tool to see how your site will look like on various devices).
A river-like visual structure. Quartz is an endless flow of stories that automatically load one below the other as you scroll down. The layout is therefore pretty straightforward: no page-jumps, no complicated navigational tools, just a lateral column with the latest headlines and the main windows where articles concatenate. Again, the priority given to mobile use dictates design purity.
A lightweight technical setup. Quartz does not rely on a complex Content Management System for its production but on WordPress. In doing so, it shows the level of sophistication reached by what started as a simple blog platform. Undoubtedly, the Quartz design team invested significant resources in finding the best WP developers, and the result speaks for itself (despite a few bugs, sure to be short-lived...).
Editorial choices. Instead of the traditional news "beats" (national, foreign, economy, science...), Quartz went boldly for what it calls "obsessions". This triggered a heated debate among media pundits: among others, read C.W. Anderson piece What happens when news organizations move from "beats" to "obsessions"? on the Nieman Journalism Lab. Admittedly, the notion of "beats" sounds a bit old-fashioned. Those who have managed newsrooms know beats encourages fiefdoms, fence-building and bureaucracy... Editors love them because they're much simpler to manage on a day-to-day basis; editorial meetings can therefore be conducted on the basis of a rigid organizational chart; it's much easier to deal with a beat reporter or his/her desk chief than with some fuzzy "obsession" leader. At Quartz, current "Obsessions" appear in a discreet toolbar. They includes China Slowdown, The Next Crisis, Modern States, Digital, Money, Consumer Class, Startups, etc.
To me, this "obsessive" way of approaching news is way more modern than the traditional "beat" mode. First, it conveys the notion of adjustability to news cycles as "obsessions" can -- should -- vary. Second, it breeds creativity and transversal treatments among writers (most business publications are quite boring precisely due to their "silo culture".) Third, digital journalism is intrinsically prone to "obsession", i.e. strong choices, angles, decisions. For sure, facts are sacred, but they are everywhere: when reporting about the last alarming report from the World Bank, there is no need to repeat what lies just one click away -- just sum up the main facts, and link back to the original source! Still, this shouldn't preclude balanced treatment, fairness and everything in the basic ethics formulary. (Having said that, let's be realistic: managing a news flow through "obsessions" is fine for an editorial staff of 20, certainly not so for hundreds of writers.)
Quartz business side. Quartz is a free publication. No paywall, no subscription, nothing. Very few ads either. Again, it opted for a decisive model by getting rid of the dumb banner. And it's a good thing: traditional display advertising kills designs, crappy targeting practices irritate readers and bring less and less money. (Most news sites are now down to single digital digits in CPM [Cost Per Thousand page views], and it will get worse as ad exchanges keep gaining power, buying remnant inventories by the bulk and reselling those for nothing.) Instead, Quartz started with four sponsors: Chevron, Boeing, Credit Suisse and Cadillac, all showing quality brand contents. It's obviously too early to assess this strategy. But Quartz business people opted for being extremely selective in their choice of sponsors (one car-maker, one bank, etc.), with rates negotiated accordingly.
Two, brands are displayed prominently with embedded contents instead of usual formats. Quartz is obviously shooting for very high CPMs. At the very least, they are right to try. I recently meet a European newspaper that extracts €60 to €100 CPMs by tailoring ads and making special ads placements for a small list of advertisers.
Again: such strategy is fine for a relatively small operation: as it is now, Quartz should not burn more than $3-4M a year. Betting on high CPMs is way more difficult for large websites -- but niches can be extremely profitable. (For more on Quartz economics, read Ken Doctor's piece also on Nieman.)
To sum up, three elements will be key to Quartz' success.
1 . Quickly build a large audience. Selected advertisers are not philanthropists; they want eyeballs, too. Because of its editorial choices, Quartz will never attract HuffPo-like audiences. To put things in perspective, the Economist gets about 7M uniques browsers a month (much less unique visitors) and has 632,000 readers on its app.
2 . Quartz bets on foreign audiences (already 60% of the total). Fine. But doing so is extremely challenging. Take The Guardian: 60 million uniques visitors per month -- one third in the UK, another in the US, and the rest abroad -- a formidable journalistic firepower, and a mere £40m in revenue (versus $160m in advertising alone for the NYTimes.com with half of the Guardian's audience, that's a 5 to 1 ratio per reader.)
3 . Practically, it means Quartz will have to deploy the most advanced techniques to qualify its audience: it will be doomed if it is unable to tell its advertisers (more than four we hope) it can identify a cluster of readers traveling to Dubai more than twice a year, or another high income group living in London and primarily interested in luxury goods and services (see a previous Monday Note on extracting reader's value through Big Data)
4 . In the end, Quartz is likely to face a growth question: staying in a niche or broadening its reach (and its content, and increasing its staff) to satisfy the ad market. Once its audience levels off, it might have no other choice than finding a way to make its readers pay. It should not be a problem as it focuses on a rather solvent segment.