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Last April, the business news publisher Quartz stunned the media industry by removing its three-year-old paywall, a move designed to expand its general readership at the potential expense of its paid membership business.
One year later, the pivot serves as a valuable, if limited case study in the challenges of balancing the dual revenue streams of advertising and subscriptions—a matter of heightened interest following Time’s declaration last week that it too plans to drop its paywall.
For Quartz, however, the experiment has so far produced uninspiring results. And against the backdrop of challenging economic conditions for digital publishers like BuzzFeed Inc. and Vice Media, its future looks increasingly uncertain.
Quartz declined to share how many of the 25,000 paying subscribers it had last April still remain.
But since ungating its content, site readership has dropped from an average of 3 million visitors per month in 2022 to 1.3 million visitors per month between January and March of this year, according to data from the measurement platform Comscore.
According to Similarweb, which uses a different methodology to measure site traffic, readership fell from 8.5 million visitors in April 2022 to 4.4 million visitors in April 2023, a 48% drop.
The downward trend fits into a larger pattern of decline: Quartz has lost traffic for the last several years, from 9.6 million monthly visitors in 2019 to 8.1 million in 2020 to 4.9 million in 2021, according to Comscore. The publisher has seen its traffic climb in the last two months, although readership remains down year over year.
Traffic is the result of a variety of factors, which complicates any direct correlation between paywalls and readership, said Jack Marshall, a media analyst and co-founder of the subscription advisory firm Toolkits.
Outside influences, such as news fatigue, play a role in declining readership, as do shifts in visibility caused by changes to search and social platforms. Quartz, an early pioneer in building audiences through newsletters, has also continued its focus on email in the last year, growing its Daily Brief newsletter to 650,000 free subscribers, up from 575,000 last April, according to the publisher. It hopes to improve traffic through a homepage redesign, implemented at the end of 2022, plus launching new content formats and video franchises.
Nonetheless, the decline is surprising, according to Marshall.
“If your goal was to try and reach a larger audience, dropping a paywall should certainly not hinder that,” said Marshall.
But according to interviews with experts, as well as people familiar with the matter who requested anonymity to speak candidly, one factor has played an outsized role in explaining the drop-off: Quartz’s new ownership.
A complicated acquisition
Two weeks after Quartz dropped its paywall, G/O Media acquired the publisher for around $4 million, a figure that has not previously been reported, according to a source familiar with the matter.
At the time, the company was generating roughly $8 million in revenue but losing between $2 million and $3 million. A representative for G/O Media disputed these figures.
Since then, an exodus of roughly half the newsroom, combined with a bumpy platform migration and shifting editorial strategy, have exacerbated the decline in readership.
“Quartz’s reach cannot be fully counted by Comscore, given their worldwide audience, newsletters, podcast audience, social reach, etc.,” said a G/O Media representative. “That being said, as we are improving the site there has been a net decrease in U.S. traffic, but we have seen an increase in newsletter subscribers.”
For G/O Media, which monetizes primarily through display advertising, the situation has led to internal anxiety, prompting questions about the value of the acquisition and the viability of the G/O Media business model more broadly.
Last year, the privately held company failed to break even, although chief executive Jim Spanfeller positioned the outcome as a win, given the economic climate, according to a person familiar with the matter.
Spanfeller has disputed this account, saying that both Quartz and G/O Media are profitable.
“It’s been a year—what home runs has Quartz produced?” asked a person familiar with the matter. “This was supposed to be a huge win. Has the audience grown? Where is the upside?”
Cultural disconnect, staff exodus and shifting content strategy
From the outset, the merger raised questions of cultural chemistry.
Where Quartz prided itself on meticulously designed, in-depth reporting, such as its Field Guides, the G/O Media model champions volume and page views. To net a steady stream of fly-by readers, the G/O portfolio of websites, which includes Jezebel, Gizmodo and The Root, relies on tools like slideshows, lists and news aggregation.
Other points of friction, including an unpopular return-to-office policy, reduced opportunities for career growth and a more conservative dress code, including a no-shorts policy, have further rankled staff.
In total, the changes have led 19 Quartz reporters to leave the company in the last year, with roughly 24 remaining of the pre-acquisition headcount of 50, according to people familiar with the matter. A hiring freeze implemented in January across G/O Media has prevented Quartz from replacing all but one of the vacated roles.
“Employee attrition was always part of our business plan when we purchased the site,” said a G/O Media representative via email. “This, combined with an economically driven hiring freeze, allowed us to avoid editorial layoffs.”
Now, the remaining staff are expected to publish at least one story per day, a far quicker clip than their pre-acquisition cadence of 12 stories per month. At other G/O Media properties, writers must produce three stories per day, sources said. A 60% reduction in freelance budget, which was levied across the G/O Media portfolio in January, has further pressured staff, according to a person familiar with the matter.
This about-face in content strategy likely played a role in the dwindling traffic, said Felix Danczak, the senior director of subscriber experience at subscription platform Zuora. Quartz spent years cultivating an audience willing to subscribe to its newsletters and pay for reporting, then reversed course to embrace a free model based on volume.
“If your original strategy focused on newsletters and subscriptions, then you walk that back to emphasize traffic, you have now disincentivized both the traffic audience and the newsletter audience,” Danczak said. “It’s a bit of a scorched earth maneuver.”
Compounding the issue, a site migration over the summer, in which G/O Media moved Quartz to its content management system, Kinja, damaged the search engine authority Quartz had built up through a decade of publishing.
In 2022, traffic dropped from 6.3 million visitors in April to 1.4 million visitors in August, according to Comscore. According to Similarweb, traffic dropped from 8.5 million visitors to 3.9 million visitors during the same time period. A representative for G/O Media disputed that the migration played a role in the traffic drop-off.
Although the resulting frustration has been felt acutely at Quartz, other G/O Media titles have also suffered departures.
In recent weeks, notable exits from across G/O Media include David Ewalt, the editor in chief of Gizmodo, who is leaving to join The Messenger; Vanessa De Luca, the editor in chief of The Root; and Bob Sorokanich, the editor in chief of Jalopnik.
The January hire of veteran editorial director Merrill Brown has inspired a small swell of confidence, as has the recent re-hire of Rory Carroll as the new editor in chief of Jalopnik. But the outlook for Quartz, as well as for the broader G/O Media portfolio, remains uncertain.
“It is a sad place to work,” said one person familiar with the matter. “There is no growth, no innovation and no excitement.”
This article has been updated to include statements from G/O Media disputing the impact of the site migration on traffic and clarifying the intentional nature of the employee attrition.