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January 27, 2022updated 17 Nov 2023 2:45pm

Interview: Atlantic CEO Nicholas Thompson on paywalls, print and the pursuit of profit

By William Turvill

The Atlantic, a 165-year-old US current affairs magazine, has achieved an enviable transition from analogue to digital. TheAtlantic.com regularly ranks among America’s largest news websites, and – having launched a metered paywall in 2019 – the publisher has rapidly grown its digital subscriptions business. Overall, it has around 750,000 subscribers, including roughly 300,000 digital-only subscribers. Below, the Atlantic’s chief executive, Nicholas Thompson (pictured), speaks to Press Gazette about the strategies behind its success, what the future holds, and how he plans to guide the title to profitability. 

Nicholas Thompson had an inauspicious start to life as a journalist.

Less than an hour into his first job as an associate producer on ‘60 Minutes’, a senior CBS staffer took him to one side, quizzed him on his credentials, decided he didn’t have any, and fired him on the spot.

Dejected, Thompson – a New York City busker who released three acoustic albums – decided to travel the world with his guitar.

In Morocco, he was kidnapped by a drug dealer and apparently only got away after his abductor decided he wouldn’t make it as a mule.

Thompson, who grew up in Massachusetts and attended Stanford University in California, turned the experience into a successful essay pitch for the Washington Post.

Soon after, he landed his first full-time journalism job as editor of Washington Monthly, a political magazine.

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He went on to become digital editor of the New Yorker and then editor-in-chief of Wired. (He also became a regular contributor to CBS News.)

Just under a year ago, Thompson moved up from newsroom to boardroom as he became chief executive of the Atlantic.

Was Thompson nervous about making the fairly unusual (but not unprecedented) move from editor to CEO? “Not really.” Any apprehensions? “No.”

“It’s true that in my last job I wasn’t the final decision maker,” he says. “But I like being the final decision maker.”

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The Atlantic’s co-owners (billionaire Laurene Powell Jobs, who has majority stake through the Emerson Collective, and chairman emeritus David Bradley) went beyond the usual press release superlatives when they announced his appointment in December 2020.

They said of their new CEO, “uncommon talent doesn’t quite get at it. Nick is singular; we’ve seen no one like him.”

The staff email reeled off Thompson’s many achievements (fun fact: he is one of America’s most accomplished runners over the age of 45), noting that he had helped lead paywall launches at both the New Yorker and Wired.

One million subs? I’m focused on $50m revenue target

The Atlantic put its website behind a metered paywall in September 2019 and digital subscriptions growth is now an area of major focus for Thompson.

Like many of its peers, the Atlantic had a bumper year for online subs in 2020. In September of that year, the publisher set a goal of reaching one million print and digital subscribers by the end of 2022.

Today, the Atlantic says it has around 750,000 subscribers, which is up by about 500,000 since the launch of its paywall. Roughly 450,000 pay for print and digital access, while 300,000 are digital-only subscribers. 

But growth, in line with industry trends, has slowed over the past year. And Thompson now concedes that the Atlantic’s 2022 target appears ambitious.

“I doubt we’ll get to a million subs by the end of 2022,” he says. “That was probably an overstatement based on Trump-era news readership trajectories.

“And I’m also less interested in getting a million subs than I am in getting to $50m in [reader] revenue.

“We charge roughly $50 a subscription. You can get to a million subs pretty easily – you can massively discount, right? If you set a goal solely on subscribers, it can move you in some harmful ways.

“My hope is that we’ll get to $50m in [reader] revenue, and if not this year, then next.”

The Atlantic is heading in the right direction on this front, he adds. While subscriber growth has slowed over the past year or so, the publisher ended 2021 “with higher subscription revenue than we started it. Which is kind of extraordinary given the year we had”.

“We didn’t bring in as many new subscribers as we did last year, but we had a low churn rate,” Thompson explains. “And so if you have a low churn rate, and you bring in a good number of subscribers, you continue to stay in the black. That was what we wanted, and that was what we got.”

In other words, the Atlantic lost some subscribers last year, but not many. It also added some new subscribers, meaning its overall subscriber volume remained relatively flat. The Atlantic’s revenues grew because many of its subscribers were moved from discount introductory offers to full rates.

When will the Atlantic turn a profit?

Thompson’s overriding financial goal is to guide the loss-making Atlantic into profit. “And I think if you were to look at the trend lines, we’re going quite steadily in the right direction.”

When will the Atlantic turn a profit? “I don’t know,” says Thompson. “It’s probably not the best idea for me to give [an estimate]. But we’re definitely heading in the right direction.”

The Atlantic’s advertising revenue grew last year. “My hope is it grows even more in 2022,” says Thompson, who admits to being slightly surprised by the ad market’s buoyancy in 2021.

Inevitably, events – another source of revenue for the Atlantic – are yet to fully recover from Covid-19.

The Atlantic held more than 100 events per year before the pandemic, including dozens of small functions associated with its flagship Atlantic Festival.

Last year, the company hosted around 20 virtual events, including the Atlantic Festival in September and a new In Pursuit of Happiness conference in May. 

The Atlantic is planning more than 20 events in 2022, some of which will allow for in-person audiences alongside virtual. “But we’re never going to get back up to 120,” says Thompson.

Why? “It’s very hard to scale back up. When I was at the New Yorker and Wired, I watched the Atlantic. It was a real pioneer in events for the media business before everybody else got in. Everybody watched, saw the Atlantic’s success, got in, and it became more competitive.”

Why Thompson is still committed to print

For all the Atlantic’s digital success over the past three years, its  monthly print edition is still a key part of the business.

In the first half of 2021, the magazine had an average print circulation of 476,000, up from the same periods in 2020 (when its circulation was 389,000) and 2019 (426,000).

Thompson, who most commonly reads the Atlantic through its iOS app, is a “strong believer that we will have a print magazine for a long time”.

“The readers like it. It’s also not that expensive. It’s not very hard to print the magazine and mail it to people.

“Advertising in print magazines has fallen off a cliff – though we still have some wonderful advertisers, so we still make some money there. But even if we went to zero – even if we had zero print advertising – I would still continue to print it.”

Surprisingly, there is also some techie reasoning at the heart of Thompson’s dedication to print.

“There are advantages to having people read in print,” he says. “Because you don’t depend on the distribution algorithms of large social media giants.”

Journalism’s ‘very unhealthy’ relationship with Big Tech

As editor-in-chief of Wired, Thompson’s job was to hold large technology companies to account.

In his new life as a media CEO, journalistic responsibilities are left to editor-in-chief Jeffrey Goldberg – who leads a newsroom of around 150 – and Thompson has to work with the tech giants as business partners.

Still, he’s clearly not shy about speaking his mind and ruffling Silicon Valley feathers.

The Atlantic is a paid-up partner on Apple News+. Thompson is happy with the business relationship (AN+ boosts the Atlantic’s circulation by 61,000 and there is little “cannibalisation” of existing subscribers).

But what does he think of AN+? Is he an avid reader? “Not really. I have a subscription and occasionally I’ll go and bounce from magazine to magazine. But it hasn’t been a preferred method of reading for me.”

Twitter? Thompson names it as one of his favourite news websites, and says it is a good tool for journalists to meet sources and reach influential people. “But, in general, it is a distraction machine and a time waste for most journalists.”

So journalists spend too much time on there? “Of course. It’s been terrible for lots of journalists. It creates filter bubbles. It creates perverse incentives. It wastes time.”

Facebook? “The percentage of traffic to the Atlantic that’s driven by Facebook has declined massively over the last five years.” Why? “Facebook’s changed their algorithm to deprioritise news. They started doing that in January 2018 and have more or less consistently done it since.”

And what about Google? 

Publishers like the Atlantic rely on Google as their primary source of traffic. The Atlantic writes about Google as one of the largest and most powerful companies in the world. Publishers partner with Google through schemes like News Showcase, and get further support from the Google News Initiative. News companies compete with Google in the global advertising market. They sell ads through Google. And, occasionally, they’ll buy ad space from Google.

Does Thompson regard this as a healthy relationship?

“Oh, it’s very unhealthy,” he says. “It would be much better if the publications that were responsible for reporting on the most complicated issues in the world were not financially dependent on companies at the centre of that. That would be better. But that’s not going to change, so we have to deal with the world as it is.”

More generally, Thompson believes it is “quite unhealthy for the news industry to be so dependent on the vagaries of distribution algorithms at specific platforms.

“Because, in the case of Facebook, four, five years ago, it led people to a whole form of sensational reporting and sensational headlining – certain kinds of assignments that were not healthy for the news industry in the long run. That problem has partially subsided, but it’s still a problem.”

Newsletters as a cure for social media ‘decay’

So what’s the solution? How can publishers thrive independent of algorithms? Clearly, there’s no simple antidote.

One answer, as Thompson has already mentioned, is maintaining a magazine. Another, he believes, is the email newsletter.

Last year, the Atlantic launched a series of new newsletters from nine journalists who were signed up as contributing writers.

Thompson says the scheme – a “hybrid of a traditional publication and a new newsletter publication” – has been a “smashing success” so far. 

The Atlantic, like the New York Times, is attempting to contend with/take advantage of the rising popularity of email newsletters.

“We, clearly along with everybody else in the industry, recognised that newsletters are going to be a huge phenomenon,” he says. “One of the effects of social media and digital publishing is to shift power and influence from organisations like the Atlantic to individuals.

“And so we spent a lot of time thinking about how we respond to this. Do you try to create your own newsletter platform? Do you try to just stop all the writers who want to go write newsletters? Do you partner with one of the existing companies?

“We eventually settled on the strategy of building our own newsletter distribution system that would, we hope, take the best of individual newsletters and the best of the benefits of continuing to work for the Atlantic.”

Email newsletters have been a staple of news publishing for many years. Why are publications like the Atlantic (and Press Gazette – sign up to our newsletters here) going big on newsletters now?

Thompson says that, in his experience, newsletters have “always been huge”. The difference now is that publishers are recognising that readers increasingly value newsletters authored by individual writers.

From a publisher and writer perspective, Thompson also believes newsletters are part of a “backlash against social media and the fear of becoming dependent on social media”.

“A lot of people bet their careers on Clubhouse. They went all in on Clubhouse. And then Clubhouse was huge, and it looked like a great move. And then it was terrible.

“With newsletters, you’re not dependent on the Twitter algorithm. You’re not dependent on venture capital funding. You’re just dependent on you.

“So those factors all contributed to this huge rise of newsletters. And then I think it was also the decay of conversation on social media platforms that contributed to it.”

The Atlantic in the metaverse?

Thompson’s plan for the Atlantic, in a nutshell, is to reach $50m in subscription revenues, retain a print magazine, keep a slimmed-down events business, build a newsletter powerhouse and turn a profit.

Then what?

“Will Web 3.0 change the way we report stories and the way we structure our organisation? Will people be reading stories in the metaverse? Should the Atlantic be creating a version for augmented reality? Should the Atlantic be trying to figure out what role it can play in commerce?

“Those are the questions I’m grappling with. What is the answer of what comes next? I don’t know.”

No decision on how the Atlantic will enter the metaverse, then? “I have no doubt that it will be a massive, massive thing. I have some scepticism about whether media will play a role in it.

“I can’t… what is the Atlantic in virtual reality? You can imagine them taking the IP from our stories and somebody making games from it. But there’s no advantage to reading a magazine in an Oculus. It’s possible that there will be a more dimensional world, but the Atlantic will still stay largely two dimensional.”

Thompson is sure that he’d like the Atlantic to spread its presence beyond the United States. Currently, around 10% of its subscribers come from outside the US.

“I would like us to expand internationally,” he says. “I’d like us to figure that out. We have a relatively small international footprint. Not when this interview is done – we’re going to be everywhere then.”

One year after leaving behind his career as a journalist, Thompson admits there are aspects of the job that he misses.

“You do lose some things. You lose a little bit of the day-to-day intensity. I miss being engaged in trying to assign the best story about what is happening at any given moment. That’s a really fun challenge that brings a lot of adrenaline.

“But I’ve traded it for the opportunity to really think deeply about the future and the shape of this publication,” he adds.

“It’s changed the trajectory of my life. I expect to be at the Atlantic for the next 15 years, but who knows what happens after that. I’m probably not going to be an editor again.

“But it’s not a big shift. It suits me. The new clothes fit just fine.”

Quickfire questions with Nicholas Thompson


Favourite movie?

Butch Cassidy and the Sundance Kid

TV show?

The Wire

Favourite magazine (apart from the Atlantic)?

Wired and the New Yorker

Favourite magazine that you haven’t worked for?

Vanity Fair

Favourite news website?

Twitter and Letsrun.com

Career low point?

“The lowest point of my career was probably being fired by ‘60 Minutes’... It probably had some scarring impact in a way that I haven’t fully processed.

High point?

“I think the thing that I’m most proud of is that I helped play some role in maintaining the longevity and financial success of both the New Yorker and Wired. I love both publications. And if they’re still around in however long, and I had some tiny role in it, then I’ll be proud of that.”

Picture credit: The Atlantic

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