CN#10. Axios: $0 to $525m in just 6 years

EDITORIAL

The masthead is surmounted by a nod to the sponsor, Tito’s Handmade Vodka, of which more later, and the two editors are given top billing, creating an immediate human connection. It makes a difference to "know" who is talking to you every day.

It’s a chatty introduction, with a snippet, the weather and a thank you to readers, plus the regular word count and credit to copy editors, showing the publisher’s commitment to editorial efficiency on behalf of the reader.

This housekeeping routine is settling, reassuring, calming and above all, human. There's no rush to jump into the news. It's like meeting a well-organised friend for an update.

The big promise is it will only take 3 minutes to read.

Axios Local newsletters start their coverage with “1 big thing”.

Big usually means serious and "consequential" to the community. This involves covering political debate (without taking sides) and local service provision.

A reduction in garden waste collected by Chicago refuse authorities impacts many households, and Axios has used a Freedom of Information request to get the details.

Rather than a traditional journalistic structure of an inverted pyramid with the most important information summarised at the top with more detail written in descending importance, the story is delivered with following headings.

Context:

Why it matters:

What they are saying:

The intrigue:

Of note:

Each heading has a dual function to both introduce and define (or frame) the information that’s coming next.

The writing style, "created" and trademarked by Axios, has been named Smart Brevity, sparking scepticism in some quarters that you can legally protect the style or order in which words are used.

The emphasis is on short sentences, important phrases in bold, getting to the point quickly and putting everything in context, hence the headings.

Although critics snipe it is too formulaic, it works, and what's not to like with an efficient reading experience?

1 big thing is followed by 4 other items, a structure something common to all Axios Local newsletters, helping to ensure readers know how far through the issue they are.

In this Chicago edition, the coverage is:

2. Changes in house prices in the city by zip code

3. Tips and hot links. 5 curated links to relevant stories in national and other newspapers.

4. Results of a reader poll on real versus fake Xmas trees and some accompanying reader comments.

5. Where’s Monica? Picture of one the editors in the city. Guess the answer and be entered in a prize draw.

The editors take nothing for granted to maintain reader attention; everything is pared to the bone for quick scanning and absorbing.

Although there are no wasted words, there's room to ensure a light and fun tone with chat around the facts.

The newsletter ends with some light-hearted banter from the editors, reaffirming that human connection.

The Axios approach to editorial includes original reporting, scoops and local coverage but relies heavily on curating the work of other news organisations, adding links for those that want to visit the original source.

There are deliberately no opinion pieces to avoid incitement and argument.

BUSINESS MODEL

The newsletter and website are free to all, and in the Axios local news division there are 24 city newsletters, with a further 8 planned for 2023.

Income is from a mixture of advertising revenue and membership fees with the latter more closely resembling donations in the way they are sold (see below).

ADVERTISING

In this newsletter, Tito’s Vodka is promoting a message about its environmental and healthy eating program supporting community farms.

This sponsorship is clearly labelled as an eternal message. The advertiser gets the "Presented By" slot at the top with two short-form native “Smart Posts” nestled between the most prominent story.

The copy is written by staff writers in the Axios style, and the publisher says these “compelling brand narratives” increase reader engagement.

Axios claims an average overall open rate of 48% for its newsletters, which is highly attractive to advertisers.

Recruiters and employers pay to advertise jobs on the Axios Chicago website with links from the newsletter.

There's also automated, programmatic advertising on the local news websites.

MEMBERSHIP

Membership provides a way for readers who want local community journalism to thrive to make a financial contribution. The donation levels suggested are far higher than the levels a paid subscription would be set at.

Axios has membership programs for most of its stable, with suggested contributions ranging from $50 to $500 per year. All the membership revenue is reinvested in local reporting resources.

Members get quarterly exclusive newsletters, members-only events and birthday shout-outs.

The best developed of the group’s local newsletters is Axios Charlotte which was acquired as the Charlotte Agenda in December 2020 and kicked off Axios’ foray into local.

Axios Charlotte has more than 2,000 active members who provide more than $100,000 in annual membership revenue.

MARKETING

Opportunities to gain new readers from passed along and shared newsletters and from sharing posts on social media are prevalent in the issue.

Meanwhile, a rewards program offering free Axios branded merchandise like stickers, tote bags, hats, T-shirts and fleeces, makes it attractive for readers to go on multiple friend sign-up missions.

COMMENT

If anyone ever wondered about the upside for newsletter businesses, consider the deal to buy Axios announced in August 2022.

Less than 6 years after it was founded, Cox Enterprises took a majority stake valuing the business at $525m. Axios is expected to generate revenue of $100m in 2022.

The valuation is far greater than could be justified by the current financials alone, representing a chunky 5x revenue. So why is Axios being valued so highly?

In its current form, most revenue comes from the better developed national and industry vertical newsletters and events.

So it's the upside in the local business that has helped to drive the astonishing valuation, backed by Axios CEO Jim VandeHei's talk of ultimately launching in every US city.

Part of the explanation must be that investors understand that the editorial approach is truly innovative, has traction, and benefits from a strong following wind.

There’s consensus that trust needs to be re-established in news, that it should be delivered more efficiently, and that news consumers have not always been well served.

With research showing that only 5% of readers make it to the end of an article, two-thirds leave a website before clicking on a single page, and 60% of social media posts are shared without being clicked on, there’s an obvious need for change.

Against that background, making a commitment to only provide content worthy of people’s time, attention and trust is quite obviously on the money.

Read Axios Chicago Dec 6 2022 here.

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