Two years ago, while other markets were slashing staffs and closing papers, Washington, D.C., media players were swelling their ranks. Bloomberg LP hired aggressively to build its expensive subscription news and data service, Bloomberg Government, and paid $990 million for BNA, a legal, tax, regulatory and environmental news and info service to bolster it. Last year, to help promote BGov, it published oversized glossy dailies to distribute at the political conventions. At the same time, Politico was building a paid service of its own, and National Journal was adding staff. One journalist recalled how Politico always seemed to outgun its rivals in resources, whether the news warranted it or not: “You’d go to a markup [session], and there’d be two people there.”
D.C. is a different story today. The Economist Group’s CQ Roll Call laid off about 30 last summer when it consolidated its two print brands into one. National Journal, part of David Bradley’s Atlantic Media, cut 10 news staffers late last year in a reorganization. This month, Bloomberg eliminated a reported 20 out of 250 from BGov (others whisper the number is at least 40), and Politico let go a handful of staff.
D.C. is a cyclical ad market; ad revenue pours in when Congress is in session, but when lawmakers are home running for re-election, spending largely dries up.
In Bloomberg’s case, BGov represented a $100 million test of whether the news and data giant could apply its financial acumen to a new sector. For Politico and National Journal, whose models are more traditionally ad-based, the cuts underscore the difficulty of getting into a new business (especially at a time when the economy is shaky, the fiscal cliff still looms and similar services compete in the market). In all these cases, it may be harder and take longer than they originally thought. It’s still a local, ad-based world for Politico and National Journal, which blamed the weak print ad market for having to lay off editorial staff. While most of its Web traffic comes from outside D.C., Politico’s bread and butter are advertisers who pay to reach Beltway influencers.
Media players here insist they’re still bullish on the subscription model. BGov head Don Baptiste, like others selling rival services, wouldn’t disclose the number of subs sold, but said the company is “meeting expectations.” He said BGov was hiring elsewhere to add new tools and features in the year ahead (of note, the company said the layoffs weren’t related to the BNA acquisition). “It’s been a great market for us. We’re very happy with the progress we’ve made.”
National Journal also is bullish, saying it’s signed up more than 800 members for its pricey membership service. Politico co-founder John Harris said the company’s membership service Politico Pro is exceeding its forecast subscriptions and renewals. He said the company was budgeted for another 30 hires in the year ahead, from 230 now, and plans to increase its policy reportage. “There’s not been a dropoff; that’s why we’re confident in Politico’s success,” said Harris. Subscription revenue is “still a comparatively small percentage of our overall business,” he added, “but I do think it’s going to be a rapidly rising part of our business.”