What you need to know:

• Former Nine digital and publishing chief Chris Janz eyeing possible US and/or APAC expansion as soon as this year.
• Paid subs model powering for business news, “north of 60 per cent” open rates, now adding commercial partners – though limited, “15 max” this year, per Janz. Plus tactical stuff – but high level. “Not flogging fridges”.
• But Australian market faces “extinction event” if Google pulls pin on support he says it is already tapering and shortening.
• “Sloth-like” government has “lost leadership position” and now risks major fallout and “bloodiest day” job losses.
• Media businesses “crazy” to rely on ad-funded models, per Janz.
• Go deep, go paid, and look to US reinvention of news.

“We’re well ahead of plan.”

Chris Janz launched Capital Brief after losing a CEO leadership tussle to the now departed Mike Sneesby at Nine, rapidly convincing Shearwater Capital to back a mission to mine deep business and corridor of power niches. Eighteen months on, he’s eyeing US and APAC expansion, maybe this year, if he can land local partners.

“You'd be crazy not to work with people who understand their markets intimately. I've never believed in parachuting yourself into a space that you don't understand and hoping for the best,” said Janz.

“There's the opportunity to do it this year. Whether or not we do it is another thing. We're actively debating where to go next.”

For Janz, the US is the clear frontrunner in reinventing media models and formats that people are willing to pay for. He thinks in a world of scale, the future is niches done better.

“A lot of the models in Australia favour trying to talk to the largest possible audience, because they're following an advertising funded-model. In the US that period of chasing scale through search and social back in the days of Huffington Post and Buzzfeed was over a decade ago. It has moved very deeply into the paid journalism era,” per Janz.

“Rather than just being about the big incumbent players, there's a very healthy ecosystem that's developed of really targeted organisations going after a really targeted segment and investing really deeply in journalism that's done in a bit of a different way to what you find in the in the traditional press – which means it's additive to the ecosystem.”

He cites the likes of Puck, The Information and Axios as the vanguard.

“They're really experimenting and doing things differently – and they're wildly different, but all of them, what all of them have in common is an investment in journalism and seeing quality [paid-for] journalism at the core of their model,” said Janz.

“The other thing you see in the US is the incumbents almost celebrating that. There is a real belief that more journalism in the ecosystem is better for everyone, the competition is better for everyone, and the creation of more journalism jobs is better for everyone. So you see appropriate crediting of each other's work and all boats rising in a way that you really haven't seen here in Australia.”

The last fool

Locally, Janz is bleak on the future of ad-funded media. After Meta left the current “sloth-like” government holding the bargaining code baby, those surviving on Google promissory notes may be on borrowed time.

The likes of Anthony Catalano-owned ACM last month told Mi3 it had cut deals on “similar” terms with Google, and is not participating in the class actions against Google (that if successful would see it compensated regardless). Janz is sceptical those terms will hold.

“Privately, people will tell you that Google are reducing the value of their deals across the market, and they've shortened them from being longer-term deals that give the certainty to invest in journalism to shorter-term deals that can be terminated at a minute's notice,” he told Mi3.

“There’s very real risk that Google goes to zero. They did not sit down at the bargaining table for any reason other than there was a code in place and a very clear government commitment to pursuing that code.

“But look at their commentary in other countries around the world. They make it very, very clear that they don't voluntarily participate in payments of that size and scale,” he said.

“I would not count on them being the last fool sitting at the table handing over cheques that they don't need to. They're a sophisticated, quite brilliant organisation that, by any measure, doesn't do things unintentionally.”

Janz is acquainted with Google’s long-term strategic game. He struck the “deal of a career” when brokering the 2017 arrangement with Google to sell Fairfax’s premium inventory programmatically, reportedly for guaranteed annual revenues north of $40m.

At face value, a chunky loss-leader for Google and a revenue lifeline for Fairfax. But the deal helped entrench the former’s market dominance and see off rival adtech firms like AppNexus that had been courting Australia’s major masthead owners.

(Meanwhile, Google’s alleged simultaneous ruse to kill off header bidding – a digital ad auction mechanic that was then opening up publisher inventory to the broader market and likely higher prices – hobbled programmatic competition and effectively undermined publisher revenues by closing off alternatives. That’s a contention at the heart of the current publisher class actions the likes of ACM are now reluctant to join.)

Also ironically, for someone deeply invested in the media bargaining code and its attempted NZ equivalent, Janz said Scire would benefit from the resulting bloodbath should the circa £120m annual payment from Google evaporate per Meta’s $80m.

“As an organisation that's invested in 30 new gigs in media, we haven't received a cent from either of them; there is nothing to bring them to the table. So the whole construct has almost been anti-competitive for us, because it means you have cashed-up competitors who are able to deploy the news bargaining slush fund however they see fit. And often that doesn't mean additional journalism roles.”

If Google lifts Meta’s playbook, Janz said the auguries bode ill.

“If profitability levels are maintained – and you've got to remember that some of Australia's newspapers are among the most profitable in the world – I think the loss of Google money from the sector would be the bloodiest day we've ever seen.”

There is a chance that investors “may accept we've had a bumper period and share the hurt with newsrooms”. But it’s a risky bet, and one that Janz and Scire don’t have to place: “The disruption caused by the loss of that funding within other organisations actually would be to our benefit, which is a sad indictment on where we are.”

Sloth vs. wrath

Capital Brief has a high number of subscribers in Canberra. But Janz doesn’t pull punches in his assessment of the current administration’s approach.

“Urgent action needs to take place, not ‘let's wait and see what Donald Trump does next’,” he said. Lawmakers and power brokers might argue that far more is at stake from trade retaliation than an industry disrupted by tech platforms and grappling with longstanding trust issues.

But Janz argues the alternative is amped-up misinformation, an “extinction event” for local media and the erosion of democracy. He suggests trust cuts both ways.

“The current government made a commitment before the last election that there would be a roadmap in place under their watch towards a sustainable, diverse media ecosystem in this country – and the movement has been sloth-like,” he said.

“There's the seeming surprise that a change in US government might affect what kind of pathway we take with the tech giants. But I just think that’s a distraction from the overall lack of action.

“Frankly, if movement had been taken three years ago, we wouldn't have faced Meta withdrawing circa $80 million a year in funding from the industry. We wouldn't have found ourselves in a situation where new entrants and new players are frozen out of any of this funding, and we wouldn't be staring down the barrel of there being the one single solution to all of the industry's problems,” per Janz.

“We'd be so much further advanced, and I think Australia has lost its leadership position when it comes to future funding models for journalism due to inaction. So yes, I am concerned about where we're at because so many traditional newsrooms rely on this cash right now. If it's to disappear … it will mean jobs are out the door.”

Bonfire of the vanity metrics

Janz won’t quantify what “well ahead of plan” means for Scire or Shearwater in hard numbers, brushing off “fishing expedition” attempts to hang subscriber targets of 40,000-50,000 around his neck. But he said 90 per cent of its revenues are from subscriptions, the bulk of them corporate or business rather than individuals. “We've had a lot of success going deep within companies or government institutions … the vast majority is funded by business.”

Janz suggests raw subscriber numbers can be misleading. “There are deals that I have killed in the past that have counted a whole bunch of people that aren’t actively reading you. We don't want to play that kind of contest. We just want to focus on growing the engagement of our audience and the number of people that are paying over time.”

“We had a bunch of forecasts of where we wanted to be to sustain the investment that we're putting in, and we're ahead of that. The proof in the pudding is the team growth. We've added half a dozen roles since Christmas, and there is more to come on that front. But the biggest constraint is finding great talent that we think can do things a bit differently.”

He said engagement is a better metric than reach within deep niches, and claimed Capital Brief blows out of the water anything he’s seen previously, with newsletter open rates consistently “north of 60 per cent”.  

“That engagement is the best that I've seen at any of the media players that I've been involved with. We've got really solid engagement across the board from people that are in key decision-making roles, whether it's in Canberra or in business. And because they give us their email address, we know exactly who they are.”

Data gluttony

Email, per Janz, is the only identifier niche publishers need – maybe even mainstream media, though the large publishers battling a scale-plus-targeting game with Meta, Google and the rest appear to disagree.

“I've long thought that the differentiator that traditional media companies have versus tech giants is the trust that people have in those news brands and their journalism. I think the behaviour of the sector at large has opened us up to an undermining of that trust through the collection of data and then use of that data in relentlessly pursuing people with messages based on something that they visited or searched for on Google 15 minutes ago,” he said.

“It's been a concern to me that if you're building a subscription-driven business that's founded on trust, if you don't hold yourself to the highest possible standard, you open yourself up to being compared to players that aren't potentially acting in the best interests of the reader. I think it's a mistake that media companies have headed aggressively down the path of data collection, and for us, it's a differentiating factor that people do appreciate.”

Janz claims “well north of 90 per cent of our subscriptions are tied to an identifiable business email address that allows us to say, ‘we have these chief executives and we know these senior decision makers in Canberra’”. Watching those email addresses stack up, he said, means “you can follow that chain of influence” on readership by referral and osmosis. “We very intentionally focused on the top echelons of Australian business, politics, power and decision-making, and you watch that cascade down through the readership.”

Which in turn means the firm can charge a premium to reach those power brokers, though Janz said it will work with “15 [commercial partners] maximum” this year.

“I’ve got half a dozen core [sponsors]. They tend to be category exclusive, only one player in each space, so that we can genuinely understand the business problems that they're trying to solve or the growth that they're trying to pursue.”

Alongside the big ticket sponsorships, “there's a pretty limited amount of tactical corporate messaging stuff,” he said. But “it’s not flogging fridges”.

“It might be that there is a battle for control of a company and they want short-term display that hits the audience that they are after. It might be an organisation trying to get their message to land in Canberra. So we do short-term, tactical stuff on that basis, but it's not where we are [positioned]. Frankly, people want to reach our audience, and it's a harder audience to reach  through other channels, because they they're not flicking through Facebook and Instagram. They're just time poor individuals – and the core of our focus are those deeper partnerships.”

Size isn’t everything

Janz accepts that ad-funded publishers are being prodded to follow the data gathering excesses of the platforms by those holding the ad budgets, but he thinks trying to go mano a mano with big tech will result in only one outcome.

“If you go and compete head-to-head with Google and Meta as a publisher, regardless of your size and scale, you're going to find it very challenging, and particularly challenging over time.

“I think you have to differentiate yourself based on the trust that readers have in your brand and your products, how engaged they are with your brand and your product, and then the business outcomes that partnering with you, advertising with you, drive to their business. They are all measurable, and they're measurable without identifying that said person is a 39-year-old CEO that lives in Paddington and drives a red car.

“If I look at the success that we had in turning around the Fairfax print business, it was not dissimilar. It was about going out and talking to people who had used the medium in the past, but for whatever reason, are disengaged or deactivated,” per Janz. “Or people that were voracious consumers themselves that weren't applying that to their business decision-making and getting them to sample, to try, and to measure the impact – and seeing that, actually, this is a much stronger proposition than digital direct response.

“So I see the parallels there, and I think that if you follow the same approach, or are led by the largest digital platforms, at the end of the day, you end up in a race on price. You will never be able to compete on the same size and scale. You'll never win.”

Rubric of ruin

Janz predicts publishers wedded solely to ad models will ultimately go broke.

“It's crazy to pursue an advertising-only model or an advertising-dependent model for two reasons. One is the competitive set that you're competing against has different standards, different rules, almost limitless inventory and a totally different cost base. So if you're a believer in the business of journalism, to invest heavily in unique, original journalism versus people that invest absolutely nothing in content and aren’t held to any standards, then you're going to lose.

“So that's one reason. The other is that if you are pursuing an advertising-based model, you're pursuing scale, you're pursuing mass, and you end up having to pursue journalism that gets the clicks through the door, and that, to a degree, is dependent on the platforms that are stealing your lunch.

“But it also means you potentially undermine trust over time, because if people keep clicking through to stories that are, to me, a 15-year-old clickbait model that don’t then fulfil that promise – and are also often a totally overreaching on how they're telling the story – then you end up undermining trust in your own brand. You end up putting yourselves in the same league as the platforms that you're trying to differentiate yourselves from.”

Sin, redemption

Legacy media is further disadvantaged, given platforms can seemingly put brand and government ads on sites showing child sex abuse and face little advertiser backlash, yet media buyers claim brand safety is a key reason for diverting money away from news.

“I absolutely see that there's different standards that marketers and organisations hold themselves to, and things that would be seen as criminal happening in society as accepted within certain digital platforms. But one of the great sins of this industry is turning around and pointing fingers, rather than taking control and doing what you can to move your business forward and invest further in the journalism that actually makes a difference,” he said.

“I think that's the benefit of starting with a blank sheet of paper. You're able to take a step back. It's not a case of, ‘hey we could risk 10 per cent of our reach which would have a hit on ad revenue if we go and do our journalism really well’.

“Instead, when you're starting from scratch, you're able to pursue the right approach, and it's all upside. You see the benefit of pursuing that approach, rather than the downside risk of doing things differently.”