Manchester Mill’s newsletters generate paid subscribers and 95% of revenue
‘In terrible shape’
Joshi Herrmann and Manchester Mill caught my attention in February when he testified with two competitors before a media committee of the UK’s House of Lords. The committee had questions about the quality and impact of local news coverage.
His two competitors tried to put a positive spin on the industry, despite layoffs and closings. Herrmann disagreed, saying, “There’s no point pretending that it’s in good shape because it’s in terrible shape.”
Herrmann went on, “I think 6,000 fewer local journalists down from 9,000 in 2007 is a remarkable drop off in capacity. And I think it should signal alarm bells definitely across Westminster that we have got this incredibly important industry that is dying.”
Filling the gap
Despite frightening declines in the industry as a whole, The Mill, a local news publisher of email newsletters, has racked up some notable achievements since Herrmann, 35, founded it as a personal project in 2020.
UPDATE JUNE 7 from Press Gazette: Mill Media is expanding into London and Glasgow and doubling its staff to 22.
Now the team has grown to 11 full-time staffers, including Senior Editor Sophie Atkinson.
- It has expanded, with newsletters in Birmingham, Liverpool, and Sheffield.
- It now reaches 100,000 subscribers, with 8,000 of them paying £7 ($7.25) per month.
- It generates 95% of its revenue from subscriptions, 5% from advertising.
- It has a low-cost business model, using free-lancers and adding staff only when revenues justify it.
- In August, Herrmann announced that The Mill had raised £1.75 million ($2.22 million) from a pool of private investors by selling less than 20% of the stock.
- Among the new investors: ex-New York Times CEO and BBC director general Mark Thompson and noted economist Diane Coyle. Both of them believe strongly that local news should be self-sustaining rather than dependent on grants or government support.
The interview
Herrmann and I spoke via telephone on March 13. Among topics we discussed were his beginnings in journalism, the underserved niches in local coverage, why he prefers the email newsletter distribution channel, the potential for an events business, why big digital media are failing, and why relationships with readers matter more than massive scale of users and pageviews.
I also risked boring him by describing the Manchester media market I encountered 17 years ago when I helped launch Crain’s Manchester Business. It folded after 2 1/2 years. I’ve edited the quotes for length and clarity.
The start
While at Cambridge, Herrmann edited The Tab, an online news startup focused on university students. “I spent probably more time doing that than I did on my history degree. I wanted to be a journalist and I enjoyed student journalism.”
After university, he went to a London daily, The Evening Standard. “The form of journalism I most like to write and read is where you are both revealing information, and you’re making the experience of reading far more enjoyable. I learned to do that in four years at The Evening Standard. And that’s kind of been my whole career.”
Underserved niches
After moving to Manchester, Herrmann looked at the local media ecosystem and saw opportunity. “There is an enormous oversupply of non-journalistic food content — press releases from restaurants, cocktail bars, etc. There’s also a lot of fairly undifferentiated low-quality journalism news content. So, ‘police have said this,’ ‘this person has been charged with this offense.’
“And there is a really stark undersupply of in-depth analysis of political issues. There’s an undersupply of cultural coverage. And there’s an undersupply of writing that takes writing seriously, that tries to inspire people rather than just entertain them.
“So I’m trying to provide people with a bunch of things that they couldn’t get anywhere else and that they will really love reading.”
Why newsletters?
“In the open web days where you were trying to convert people from being a page view to a paying subscriber, that was really difficult for most sites. Because the kind of relationship you had when you were just browsing open web sites was quite casual.
“Whereas your engagement with a really high quality newsletter, even if you’re going to get it for free, can often be quite deep. So it’s easier to get people to pay.”
Note: While many email newsletter publishers would be thrilled with a 1% conversion rate of free to paid, The Mill’s is an enviable 8% (8,000 paid, 100,000 subscribers.) — James
‘Mind blowing’ US model. “There are these media startups in the US where you get $10 million from a foundation, and you create a new local media company with 45 staff. I find that absolutely mind blowing that people think that’s the right way to create sustainable organizations or businesses. I rate the chances of those things working out in the long term as extremely low.”
The Mill’s events: relationships
“I think there are two layers of events. The first and most important layer is events that deepen our connection with our readers, so they’re not supposed to be money making.
“They’re about allowing our most committed readers to meet our writers, hear about our processes, and feel more and more involved in what we’re doing. You might have the writers of the stories on stage and have the readers asking questions.
“I think longer term we would like to do some larger scale events, with maybe several hundred people paying for a ticket, and get a sponsor and make money and get a new revenue line for us.”
Scale is failing
“We’re in a very interesting era right now. You’ve got these large-scale digital media companies like Vice and BuzzFeed dying. And you’ve got very large-scale local media companies that are based on scale and SEO [search engine optimization], and they’re having their revenues crash because Google’s giving them less traffic, Facebook is giving them less traffic.
“And then you’ve got this threat from AI. You’ve got basically a different kind of Internet being built that might not be based on web pages, and it might not be based on traffic. It might be based on conversation and different custom tools. And I think a really interesting question for anyone who’s got a media business or media organization is, What is our role going to be in five years’ time?”
The human touch. “I want to really hew to the side of very human led journalism that people will still want from human beings — really beautiful writing, great columns, stuff that has personality.”
Trust matters. “Having a relationship that is really close, so that when more and more media companies fold because they don’t have a relationship with readers, you are one of the ones remaining, where you are the readers’ trusted local news. You are the brand and the set of people who I really trust when everything else is kind of disappearing. Because I think an awful lot of what’s currently out there in terms of media brands will disappear.”
This is where Herrmann and I see things through the same lens. Users, relationships, and trust. It’s something I’ve written about a lot. For a long time. This is from 2018: “Publishers pivot toward users and credibility, away from digital advertising.”
This prediction was correct; I somehow can’t remember all the ones I got wrong.