After two years as the NYT columnist, Ben Smith, former Chief Editor of Buzzfeed, is coming back to the publishing game. Together with Justin Smith (no relation), the Bloomberg Media CEO, they are launching a new media project focused on global audiences.

No more media columns from me! So grateful to the Times for incredible editing and support over two incredibly fun years, and of course thanks to everyone on here for keeping me honest.
— Ben Smith (@benyt) January 8, 2022

Two such heavyweights entering the game is something definitely worth following. Moreover, the current hot media market – driven by a boom in subscriptions – seems like the perfect time to get back into publishing.

But the stated target audience is not quite as easy to capture as it might seem at first glance. According to the prospective founders, they are going after “200 million members of an “English-speaking, college-educated, professional class”, who in their view are underserved.

While this is still likely an exciting business opportunity, there are three reasons why many commentators are probably overestimating its potential: 1) journalists systematically overestimate people’s interest in global news, 2) the 200 million is in fact far from a homogenous group, and 3) the financial cycle points to a bubble.

This is an exciting business

Let’s start with a clear positive note: this is arguably the best time in years to launch new, subscription-based media. The past couple of years have seen fast growth of such publications, as well as lots of deal-making.

Moreover, given the economics of subscription-driven media, there is probably room for it. Unlike with pageviews you don’t need tens of millions of sessions to stay afloat. Even several hundred thousand paying subscribers are enough to fund a large international operation that both Smiths likely aspire to.

But scale does matter in a different sense. The main challenge of reader revenue models is that the average paying user is subscriber to just over 1 publication. Right now many parts of the market are still “blue-ish oceans”, with a lot of non-subscribers to be converted. After that you have to deal with “never-subscribers” and a pretty clear “winner-takes-most” market.

As a result, a lot of media houses have engaged in frenetic land-grab and/ or tried to consolidate their properties. Take Germany’s Axel Springer, which last year paid a billion euros for Politico, or NYT, which just announced a half-a-billion dollar deal for The Athletic.

This probably prompted, at least partially, the Smiths to try to grab their own piece before it’s too late. But are they actually stepping into an underserved space?

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The deceptive appeal of international news

NYT has the strategy of going after a potential market of 100 million English-language speakers (and is already not far from 10%). According to Ben Smith, the new publication will go after an even broader base.

But the assumption that this segment is underserved seems pretty dangerous. Joshua Benton summed it up best, asking (rhetorically) if media had been going after Esperanto-speaking middle-school dropouts.

Both @benyt and @Justin_B_Smith are very, very good at what they do, but — seriously, "no one" is going after that overlooked population of wealthy, college-educated English speakers?

I guess they're all too busy targeting, what, Esperanto-speaking middle-school dropouts? pic.twitter.com/5xBUlpQ2yG
— Joshua Benton (@jbenton) January 4, 2022

International news is in some ways the most distorted part of the journalistic spectrum (investigative journalism is a close second). To put it simply – journalists love to cover global affairs but most audiences respond with a collective “meh”.

It boils down to a question of prestige. Journalists love to interview foreign leaders, attend important events, build impressive, award-winning portfolios. The glamour of the work more than compensates for the professions generally mediocre pay.

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Meanwhile, the most underserved segments are actually those that might seem dull to write about but are close to people’s interests, hobbies and guilty pleasures. Unpacking videos are more popular than foreign affairs, and even the NYT is seeing more action from its cooking content than its world-class international reporting.

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A long tail of audiences

Let’s consider for a moment that there are in fact 200 million educated, English-speaking people out there looking for international news. As pointed out in an insightful thread by Anita Zielina from the Newmark School among others, providing content from a US-centric perspective is probably not the answer.

I thought about the @benyt @Justin_B_Smith announcement for a day before weighing in, and here is my take (TLDR: Yes, there are deeply underserved international markets in global media, but serving them with a U.S. lens is tricky) (Thread?)
— Anita Zielina (@Zielina) January 6, 2022

Indeed, there are a lot of internationally oriented publications based in the US. Almost all have an incredibly US-focused perspective, which limits their value for international audiences. So in fact that 200 million is probably just a fraction.

But the problem is even more complex, which is connected to the devilish long-tail problem so common in the media. In short, an English-language speaking, educated professional from Prague is going to be drastically different from an English-language speaking, educated professional from Kuala Lumpur.

Both might be interested in international news – but in completely different international news. The Prague person follows the conflict in Kazakhstan and Korean movies. The one in Kuala Lumpur is interested in Myanmar and Turkish soap operas.

The amount of content and tailoring for the myriad of sub-cohorts has brought down almost all who tackled this white whale of global reporting. True, AI and machine learning offer a better chance at personalizing newsfeeds Netflix-style. But that’s an ambitious bet.

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A crunch in financing

There is a question about how big the new outlet will be. So far, there are few details, and all we can do is speculate or venture educated guesses.

It is reasonable to assume it will need to heft, if only to avoid the kind of flop that ultimately brought down The Correspondent. The latter promised a new kind of reporting for international audiences. It ultimately stopped publishing almost exactly a year ago, but not before spending some $1.8 million on a crowdfunding/ promotional campaign.

The new venture will probably need to spend multiples of that (maybe even like 30-60x). Even if it gets on track there is a big period of burning cash, just like The Athletic, which ended up in NYT’s embrace just last week after burning through some $100 million in 2019 and 2020.

Justin Smith claimed to have been “flooded with interest” from investors. But the track record of most investments in the sector is rather poor. Take Vice Media, which was valued at $5.7 billion in 2017 and completely written off in 2019. Or BuzzFeed itself, which aimed to list on the stock exchange in December at a $1.5 billion valuation. Last Friday it was worth just $670 million.

The current bullish market is likely to depreciate, potentially putting a damper on that “flood of interest”. Will the prospects of a costly, complex and relatively crowded market seem as interesting? Probably not.

But perhaps NYT will be a buyer.

More from The Fix: The NYT subscriber strategy and why the model is hard to replicate

Photo by Anna Dziubinska on Unsplash

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Ben Smith’s new venture and the deceptive appeal of educated, cosmopolitan audiences