Why Business Insider and Others are Wrong About ‘The Information’

As the new kid on the block, we want to extend a hearty “Welcome!” to The Information, the newest niche subscription site, dedicated to covering technology news and the industries disrupted by it.

Headed by former WSJ technology reporter Jessica Lessin, the new paid content site drew some ire from other publications and media professionals, apparently perturbed that someone reporting on technology thought their work was good enough to ask for payment.

Business Insider jumped on the band wagon, but was quick to admit Lessin did have a viable business. However, BI’s reasons were a little off.

The Information is offering subscriptions at #39/month or $399 a year (check out our Pricing Psychology Toolkit for why you should never begin your price points with 3s!). Business Insider did some elementary math and concluded that at that price point, The Information would need 1,800 annual subscribers to support its five full-time staffers (each at $100,000 a year) and two contractors. And BI assumed that was a likely get.

Here’s the flaw in BI’s thinking. One, that’s a relatively high number of subscribers for a niche publication that’s really only publishing news. It’s not unimaginable, but The Information will need to offer more than just news stories to acquire that many subscribers — content that helps people do their job better (not just learn more about their industry) always sells better in the B2B niche.

Also, as seasoned subscription sites know, most of us don’t rely 100% on subscriptions. (There are some exceptions, like travel42, the focus on this week’s Case Study; but it adheres to point #1 with some very innovative content offerings.)

Instead, most digital subscription sites have a mix of revenue streams. Even if they don’t have advertising revenues, they often augment their profits through events, consulting, list rentals, sponsorships, and other creative means.

Given Lessin’s high profile as a WSJ reporter, it’ll be relatively easy for The Information to launch its own industry event, as well as start commanding consulting fees.

So we’re hopeful about The Informations’ future as a digital subscription publication. And happy to welcome them to the club!