Month: September 2021

Axios’ local news expansion plans

Axios has hired 20 new reporters (and three associate editors) to launch local newsletters in eight cities between Sept. 20 and Oct. 4, including Atlanta, D.C., Austin, Nashville, Chicago, Philadelphia, Columbus and Dallas. Each city has a two-person team (except for Atlanta and D.C., which have three reporters each) covering local news for Axios’ audience of “smart professionals,” Williams said. Reporters are based in the cities they are covering focusing on topics such as local government, real estate and business, Williams said. The tech, design and copy editing for each newsletter are handled by centralized Axios teams.

The Axios Local newsroom has 30 to 40 people total, according to Nicholas Johnston, Axios’ publisher, and the “aspiration” is that one day it’ll be the same size as the core Axios newsroom of 120 people. “We are trying to hire the two best journalists in each market,” Williams said. These teams will “grow as the audience grows and revenue grows… rather than go in and hire really large teams and just burn through cash quicker.” 

Axios Local is planning to move into 11 more markets by the third quarter of 2022, which will bring it to a total of 23 markets, according to Williams. Axios Local will decide which markets those will be by the end of this year, Williams said. Its current slate of 14 newsletters has around 400,000 subscribers, and open rates hover at an average of 35%. Charlotte’s newsletter has the most subscribers, followed by cities like Denver, the Twin Cities and Tampa Bay, which all have between 50,000 and 100,000 subscribers, Williams said. 

The focus on fewer, long-term advertisers

Axios Local is on pace to bring in somewhere between $4 million to 5 million this year, according to Williams. Revenue comes from email sponsorships from both local and national advertisers. National advertisers can choose which combination of markets or which region they want to reach via Axios Local’s newsletters. Each newsletter has an ad at the top of the email, and then two branded content units within the email. Pricing differs based on the size of each market (smaller markets like Des Moines have lower rates, for example). Williams declined to share those rates. 

The strategy, he said, is to prioritize long-term clients over having “a ton of clients.” The six-year-old Charlotte Agenda newsletter (now called Axios Charlotte) has about 30 advertisers on annual sponsorship deals, including Bank of America Blumenthal Performing Arts and Atrium Health. Each newsletter usually starts off with about a dozen advertisers, Williams said. Axios has a mix of centralized ad sales teams in certain markets and regions across the U.S., according to a spokesperson. There are larger revenue teams in D.C., New York and San Francisco, as well as Axios Local revenue leads living in Denver, Columbus, Austin and Charlotte. The company will hire more people across all teams next year, the spokesperson said.

“If you can generate revenue at a local level, with larger national buyers interested in a specific amount of cities, you can start to diversify revenue and don’t get ahead of your skis with too many costs,” Williams said. Axios Local will also introduce job boards to some newsletters in the fourth quarter of this year and roll them out to all markets in the beginning of 2022, he said, after the success of Charlotte Agenda’s job board, where each listing costs $250.

How are new cities chosen by Axios Local? It’s a combination of editorial and advertising factors: where Axios’ other newsletter subscribers live, where Axios’ web visitors live, what markets Axios’ current advertisers are interested in and what the overall advertising ecosystem looks like in specific cities. 

“This shouldn’t be a hobby or charity. We need to build a successful company,” Johnston said.

Facing the challenges of local news businesses

But local news is suffering. More than 90 newsrooms have shuttered since the pandemic began, according to The Poynter Institute.

While local Axios newsletters appear to be “robust,” news outlets like The Denver Post “have much larger staffs and are providing important accountability journalism, whereas Axios can really only skim the surface,” said Dan Kennedy, a journalism professor at Northeastern University. He worried that Axios’ local news push could “come at the expense of news organizations that are putting much more resources into covering the news.”

Melissa Chowning, founder and CEO of audience development and marketing firm Twenty-First Digital, works with a number of local publishers and called the space “crowded.” 

“It feels a bit like a slow-moving collision between national digital publishers more aggressively pushing into the local space and the local publishers who have been in these markets for a long time,” she said. However, “healthy competition” can produce more local investigative and civic journalism.

Johnston believes what differentiates Axios’ local coverage is its newsletter model, rather than a business dependent on traffic and clicks for ad revenue. “Newsletter subscribers have demonstrated an intent to be with Axios and ask to be emailed every day. I’m not worried in the morning: ‘I hope I have a wacky story that will trend on Facebook that people will click on.’ I can email 85,000 people every morning, which is a much stronger business,” he said.

Sights set on paid newsletters

Will Axios Local newsletters one day become paid newsletters? Johnston says he hasn’t thought that far ahead. However, he said newsletters that were launched as free will remain free. Subscription products will be “additive,” he said. 

Johnston, who previously served as Axios’ editor-in-chief before he was named the company’s publisher this month, is tasked with overseeing Axios’ first foray into the paid subscription business. Called Axios Pro, a handful of paid newsletters will launch at the beginning of next year “on deals and dealmakers,” he said. Johnston is currently in the midst of hiring reporters to launch those newsletters. “I don’t even want to guess the number of journalists we will hire in the next 12 months to launch Axios Pro and take Axios Local into the stratosphere,” he said.

In just the last month, Axios has announced a number of promotions. On Sept. 23, chief revenue officer Fabricio Drumond was promoted to chief business officer. Sara Kehaulani Goo was promoted to editor-in-chief. Shane Savitsky and Emma Way were promoted to deputy managing editors for Axios Local, and Hadley Malcom was promoted to editor of Axios Local. Ryan Kellett, who previously served as the senior director of audience at The Washington Post, is now vp of audience at Axios. 

The FTC voted during a Sept. 15 meeting to apply the Health Breach Notification Rule to connected health apps and other tech used to monitor health, such as fitness trackers, fertility and period-tracking apps, mental health apps — or apps that help people quit smoking. The rule requires companies that have experienced a breach of health-related data to notify the FTC and those affected by the breach. The goal is to get the agency’s enforcement of the existing rule caught up with the ways people manage their physical and mental health today and align it with how the data reflecting their health is handled. No companies have been charged by the FTC under the rule.

“The health breach notification rule needs a bit of a refresh,” said Pam Dixon, executive director of World Privacy Forum, a non-profit group that has conducted research on health data privacy and breaches.

Previous FTC guidance indicated the rule was applicable only in a narrow set of circumstances related to personal health record vendors and firms that provide services to those companies. But times have changed, and the agency is taking a more aggressive approach to interpreting the rule to meet the health tech industry where it is today — much more evolved than it was in 2009 when the FTC first offered guidance on how it would apply the rule.

“Today we are hoping to clarify that the health breach notification rule applies to connected health apps and similar technologies,” said FTC chairwoman Lina Khan during the meeting. As justification for shifting how the rule is applied, she pointed to the commodification of sensitive health information that app developers often disseminate to monetize their apps through targeted advertising and by building other products from large volumes of data. She said evolving the way in which the rule is applied to encompass modern technologies is a “logical interpretation.”

Khan put her proverbial foot down when introducing the policy shift. “The commission should not hesitate to seek significant penalties against developers of health apps and other technologies that ignore its requirements,” she said. Companies found in violation could be slapped with civil penalties of $43,792 a day per violation — the same amount established in 2009.

Selling or sharing data that people submit to apps is a common business model for many health app makers, said Amy Beckley, CEO and founder of Proov, a company that sells fertility test strips and has a fertility tracking app. Securing data that people submit to the company’s app is “definitely something we’ve thought about and are actively trying to manage,” she said, noting that Proov does not share or sell data collected in the app, nor does it connect the app on the backend to third parties like analytics firms, ad platforms or firms like Google and Facebook. The company’s privacy policy backs up her claims.

“We don’t voluntary give the information away which is what I think the FTC is really trying to manage — how these big apps make revenue and women don’t know what’s happening,” said Beckley. “Data’s very valuable [and] that’s the model for all these companies,” she added. “That kind of stuff — it’s just icky; it’s just not right.”

Confusion over data sharing as data breach

The FTC’s policy statement does not mean the agency is formally proposing that any new rules be established to protect health data. Indeed, crafting new rules at the FTC can take years to finalize.

However, Laura Riposo Vandruff, a lawyer in the privacy and advertising practice group at Kelley Drye and Warren, called the plan to apply the existing health breach notification rule to health apps a “significant expansion” of the original interpretation. “I’m not sure that the FTC has identified where the guardrails are,” said Riposo Vandruff, who until recently served as assistant director in the FTC’s Division of Privacy and Identity Protection inside its Consumer Protection Bureau. The policy statement “raises so many questions for companies that provide health and wellness and fitness services, and the statement doesn’t answer those questions about what companies can do,” she said.

For instance, the policy statement did not provide guidance on whether personal information shared by health apps such as an email or IP address is subject to the FTC’s new interpretation of the rule. “In the period tracking space, the fact that a consumer is tracking her menstrual cycle is sensitive information; is that consumer’s IP address also sensitive information?” asked Riposo Vandruff. She said it is not clear whether companies have to update data sharing disclosure statements or garner additional consent from app users as a result of the rule enforcement.

The two FTC commissioners who voted against the rule policy statement criticized it as contradictory to existing guidance without proper notice to the business community. Commissioner Noah Phillips argued that the updated interpretation of the rule was “convoluted.” He wrote in a dissent, “Under it, all applications consumers use to store and process data about anything related to health — e.g., your steps, the food you eat, etc. — are ‘health care providers.’ So too would be retailers that sell health care supplies, like Neosporin and vitamins.” 

Another point of contention: the very definition of a breach. In the original explanation of how to comply with the law, the FTC refers to a health data breach and “unauthorized access” in the classic sense, for example, “if one of your employees accesses a customer’s personal health record without authorization” or there’s “a lost laptop that contains personal health records.”

Now, the FTC is shifting the definition of a breach to help rein in what it sees as deceptive or unfair data sharing without proper permission from app users. “Notably, the rule does not just apply to cybersecurity, intrusions or other nefarious behavior,” said Khan. “Incidences of unauthorized access also trigger notification obligations under the rule,” she said, alluding to “serious problems ranging from insecure transmission of user data, including geolocation, to unauthorized dissemination of data to advertisers and other third parties in violation of the app’s own privacy policies.”

But the policy shift to encompass unscrupulous data sharing in the definition of a breach raises lots of questions about how a company would determine when a breach of security occurs that would require notification, wrote Phillips in his dissent. “Is it when the vendor ‘discovers’ their own plan to share the data, or comes up with it in the first place, before any information is acquired? Or is it only after that information is shared? Privacy regulations often deal with first-party violations such as these by barring the sharing and penalizing it, thus preventing the violations from happening. Waiting for an ill-defined discovery to occur and then requiring only notification permits the information sharing to happen,” he wrote.

Moving beyond the pre-wearables era

The rule policy statement came on the heels of the FTC’s settlement in June with Flo Health, maker of the period tracker, Flo. Commissioners who also voted in favor of the statement were among those who wanted it applied in the Flo Health case, though ultimately it was not. In that case, the regulator alleged Flo Health shared data that people submitted to its app — such as information about whether they were attempting to get pregnant or had premenstrual syndrome symptoms like depression — with Facebook, Google and analytics companies, without the permission of those people. “In the FTC’s action earlier this year against Flo, a fertility tracker, I made the point that the FTC must more effectively deploy the health breach notification rule against providers of digital health tools,” said FTC commissioner Rebecca Slaughter during the September meeting, when she voted in support of the new rule policy. 

The FTC does not reveal the inner workings of negotiations with companies it investigates, but disagreement over what specific types of data the rule should apply to may have been a reason why the agency did not apply it. In general, there has been some dispute over just what types of health data the rule should apply to. “Health apps are generally not covered by HIPAA and some may mistakenly believe that they are not covered by the commission’s rules,” said Khan, referencing the Health Insurance Portability and Accountability Act, which governs the privacy and security of health records stored online.

When the FTC published its original guidance on enforcing the rule in 2009, it said it would cover “web-based businesses that collect people’s health information [that] aren’t covered by HIPAA,” including “online services people use to keep track of their health information and online applications that interact with those services.” But back in 2009, mobile health apps simply weren’t common. Even health-related wearables such as Nike’s FuelBand didn’t come on the market till 2012. And discussion of digital health data tended to center on the impending digitization of personal health records prompted by President Obama’s 2010 Affordable Care Act.

“Given the fact that we’re in a pandemic and the fact that it looks like it will be ongoing for some time, and we have a preponderance of information at the individual level entering all sorts of non-HIPAA, non-public health apps, [addressing health app data] is of high importance,” said Dixon. She added, “And I do believe the FTC recognizes this.”

While studies may point to the benefits of taking a break from the screen and enjoying some print reading time, for many, gone are the days of flipping through pages of long-form narratives. For a significant number of publishers, audiences represent an age in which it makes sense for the publication’s readership to become its viewership. In a number of ways, they are doing just that.

Leveraging the rising power of FAST services

Converting readers to viewers is becoming simpler, thanks to the proliferation of free, ad-supported streaming TV (FAST) services. 

FAST services help publishers effectively break down the financial barrier that was previously associated with building new streaming TV channels. In the days of traditional TV, publishers had to invest a significant amount of money to have a studio stitch together a linear TV channel. Today, due to the rising FAST market and other new technologies, publishers can build a streaming TV channel at little to no upfront cost and immediately begin to accrue recurring revenues off of the channel’s viewership.

This is because select FAST platforms often offer services that allow publishers to utilize their platforms to create and build a streaming TV strategy, and then monetize the channel through dynamic ad insertion technology. Publishers can even opt for syndicated distribution to more easily reach tens of millions of new viewers. And it shouldn’t require significant upfront monetary or engineering resources. 

Some FAST operators can be one-stop solutions for everything from ingesting and encoding content, creating curation rules, managing monetization, electronic programming guides and ultimately, distribution across multiple devices — mobile to TV sets — as well as providing reporting and analytics. 

Understanding how to tap into — and accelerate — existing momentum

One of the biggest hurdles that publishers face in creating a new channel is creating momentum — that is, creating an audience base through which viewers feel comfortable to engage and trust in the content being presented. 

However, many publishers have already completed this step. Through their existing newsletters, print publications, apps and websites, publishers have identified a fan base. They can now use those existing touchpoints to help further grow their audience and overall streaming presence. 

In addition to the legwork of building an audience, publishers have an advantage on the content production side as well. They already have their story frameworks mapped out, based on written content plans; now, they just need to translate those written narratives over to video. This step is, for the most part, simple and can be done at relatively little cost, considering the prevalence and accessibility of 4K video recording technology. 

At the same time, with access to more viewers, there is the opportunity to boost audience engagement through the creation of more diversified content. Expanding offerings will unlock additional revenue streams. Rising viewership and improvements to real-time, dynamic ad insertion mean that publishers will likely also attract more advertising dollars as they build a more robust video inventory.

Acting now to prepare for 2022 and beyond

CTV has become a booming business, and the potential of CTV for publishers is astounding, with a recent survey finding that ​​the total hours spent with CTV devices was up 81% year over year. It helps to start by taking stock of content libraries or adjacent channels (social media platforms, YouTube) for evergreen content that could be repurposed for CTV.

This is a pivotal time to be in the streaming TV business. As publishers prepare for the future, successfully utilizing the new media landscape means having the right strategies in place from the get-go. Publishers must leverage the next few weeks and months to integrate streaming into their 2022 marketing plans and start to build out the framework to execute. The opportunity is before them, and growing. Now is the time for publishers to take advantage and reap the benefits.