Quartz is dropping the paywall it introduced just three years ago in the latest example of digital media companies searching for a profitable business model.
Quartz had allowed people to view a limited number of articles before requiring payment to keep reading. However, “it was very clear to us that the [paywall] . . . was limiting Quartz’s influence, and that definitely is related to traffic”, said Zach Seward, chief executive and co-founder.
Seward said Quartz would continue generating revenue from both advertising and subscriptions, but he wanted to focus on “the right kind of subscription”, such as niche premium offerings, while keeping the general website free to read.
“As we have this proliferation of subscription offerings from every news organisation under the sun . . . it’s becoming increasingly important to be clear and differentiated in the motivations for paying for one thing versus another,” he said.
“We’re not pivoting away from subscription revenue. I fully expect this change to result in growth of the membership programme,” he added. For $15 a month, Quartz offers subscribers access to premium email newsletters and online events. It also sells subscriptions devoted to specific topics, such as Quartz Africa, which costs $10 a month. Quartz has about 25,000 subscribers.
Quartz was founded in 2012 by Atlantic Media, owner of The Atlantic, and came of age during a dramatic rise and fall in enthusiasm for online news groups. The company launched with a slick website and developed a following for its data-driven journalism focused on the global economy.
However, as with other free-to-read websites that rely on advertising revenue, Quartz was beholden to Google and Facebook as they took over the online ad market. Changes to Facebook’s algorithm hit traffic referrals.
Atlantic Media in 2018 sold Quartz to Japanese media group Uzabase for about $86mn, and the new owner sought to build up its subscription business. But that transition hurt revenue, which in 2019 fell 22 per cent from the previous year to $27mn, according to public filings.
Only two years after buying it, Uzabase in 2020 sold Quartz to Seward and Katherine Bell, editor-in-chief, for an undisclosed sum. After restructuring and laying off nearly half of its staff, Seward is charting a new strategy for Quartz’s newsroom of 50. He said he was evaluating financing options, such as new minority investors, and reconfiguring its business model.
News media groups including The New York Times and Financial Times have relied on subscriptions, while business news sites such as Insider have also introduced paywalls.
“It’s an easier proposition for the FT starting with a larger brand recognition and base of subscribers to have that influence and not feel like it’s limited by the paywall. For us, [it’s] totally different,” Seward said.
Some online media companies such as BuzzFeed have pushed forward with advertising-based news that is free to read. Jonah Peretti, BuzzFeed chief executive, has argued that the broader public needs news publications that are widely accessible.
Seward likened Quartz’s business model to that of The Guardian or US-based public media, which rely on donations from readers, or “members”.
“The growth is determined on something quite different . . . it’s the journalism and the overall impact that we’re having, will affect whether people think it’s worthy of support.”
