Jon Kelly, editor-in-chief and co-founder of Puck, discusses the future of journalism business models in keynote session at 24th annual ISOJ

View video of session here.

“When we started it was an era of anti-innovation”, the co-founder and editor-in-chief of Puck, Jon Kelly, told moderator Sewell Chan, editor-in-chief of The Texas Tribune, at the beginning of Friday’s (April 14) second keynote session of the 24th ISOJ at UT Austin. 

“The business models were set in our industry. There wasn’t a lot of room for innovation because everyone did really well, the organizations thrived, and you didn’t want to screw things up.”

Kelly’s approximately 50-minute Keynote discussion, entitled “Journalism in the Era of the Business Model: Imagining the End State,” focused on the challenges, opportunities, and pathways faced by the industry today, as past models no longer function as they once did. The talk featured Kelly describing mainly journalism-related ideas aided by a slideshow in the first half. In the final half, the experienced journalist, who has worked at The New York Times, Bloomberg, and Vanity Fair, and who between 2019 and 2021 worked with private equity, answered questions from the mediator and the audience.

Both Kelly and Chan started their careers in the early 2000s, a period that American media outlets regarded as one of great economic prosperity. Meanwhile, as Kelly noted, the music industry underwent a revolution with the advent of Napster in 2001, leading to a belief that artists could no longer earn a living from their work. However, the industry gradually adapted until it stabilized in the current format, where the majority of users pay for platforms such as Spotify, Deezer, and Apple Music. The same process, said the speaker, is currently ongoing with journalism.

“The death of the album, or semi-death of the album, was not the end of the world. It was just an opportunity for new artistic expressions, in new platforms,” Kelly said. “The global music industry is now about the same size as it was in 1999. We’ve reached the end state in the music industry. My hunch is that, in our industry, we are around where they were in 2005,” he added, two years after Apple launched its paid music download service, the first step towards the decline of the age of music piracy.

In Kelly’s opinion, the fact that journalism is still at the beginning of its stabilization process “opens up so many great questions of what that end state could mean.” According to the journalist, in any case, it will mean an era of innovation, in which the decisive element will be finding the right business model for each outlet. “In my journey through journalism and investing, and back again, it’s really been about figuring out and finding the right business model. Because if you find the right business model, then you’re going to be able to actuate the change.”

Incentives for the team

Puck, named after an American humorous newspaper from the late 19th and early 20th centuries, was founded in 2021 as a symbol of the changes advocated by Kelly. The publication concentrates on Silicon Valley, Hollywood, Washington, Wall Street, the media, and fashion in the United States. Its journalists have sources within each of these U.S. power centers and write stories that include lots of insider information.

One of their main innovations is precisely in its business model: in addition to salaries, Puck also remunerates its team according to the subscribers they attract. 

“One of the things I’m most proud of as a co-founder of Puck is that my journalist colleagues and partners are not just my friends and colleagues. They are actually equity holders in the business, and they are incentivized upon success. If they drive subscribers to Puck, if they start a podcast with Puck, we compensate them out of the deals,” Kelly said. “And so for us, this is our attempt to try to figure out what the next iteration of the business model looks like.”

According to Kelly, this attempt breaks away with a paradigm that was in force until recently, in which journalists did not need to take risks or consider the economic aspect of their work, and had a more or less predetermined career model.

Back then, Kelly pointed out more than once, “the job was ‘don’t screw it up.’ You know, you’d begin your career in your 20s when you got out of college, and if you played the rules, you’d get promoted every two years, and maybe you’d end up in management,” he said. 

“It was stewardship rather than innovation. It was about managing a brand, doing good work, and deciding on the journalism and editorial side. It was about not even thinking about how the business worked, because we were at a steady state in the business model evolution.”

The past 15 or 20 years “have upended this in every way,” Kelly said. He added that many media lost their identity over this period, confused in the middle of a clickbait frenzy and not knowing what to prioritize in editorial terms. In response, this “created an opportunity for new brands, which entered the world with dignity and self-respect.”

Optimism in local journalism

One of the first questions by the mediator Chan — who was Kelly’s colleague at The New York Times nearly 10 years ago — was about how to think of new business models for local media that face more challenges in attracting investment.

“What does it [new business models] mean for journalists who aren’t elite? I mean, if you’re covering state government like we [at the Texas Tribune] are, or if you’re covering your community, or civic journalism, stuff that is harder to scale and harder to monetize,” Chan asked.

Kelly’s response was optimistic, as he expressed his belief that the subscription and reader contribution model will gain momentum and ultimately become a viable financing option for local journalism.

“There is just extraordinary capital ready to be put to work to figure out how to do this. For a number of reasons, investors haven’t been fully matched yet with opportunity,” Kelly said. “But these systems that worked will work again. They are just going to work with new business models, and some risk is going to be required to figure that out.”

During the Q&A session, an audience member asked Kelly about his perspective on competition. Kelly responded by stating that media diversity is beneficial for the industry, allowing for learning opportunities between companies while demonstrating the strength of the industry as a whole. This strength, in turn, attracts more investments and creates a positive environment for growth.

“This is not a winner-takes-all market. We are in a market where the winner takes a share. There are going to be a lot of winners in this new era that we’re in,” Kelly said.

Another member of the audience, who identified as Jane from Twitter, asked Kelly about the editorial style of Puck. Specifically, about the practice of some writers, such as William D. Cohan, who openly expresses opinions in their articles. Kelly answered that this approach is encouraged among the team because it adds a unique perspective and depth to the reporting.

“We believe that journalists are domain experts. So we actively encourage it. From conception, we encourage our journalists to write what they report, to write with what they know, and to write with what they think,” Kelly said. “And that’s not just because I believe it’s the best form of communication. I also think it’s the most accurate, and often the most effective.”

The last question came from a student: For Kelly, should those still at journalism school focus on learning the traditional skills of the métier and prioritize their learning, or should they instead try to create their own business?

The answer was none of the options: the most crucial thing for an apprentice, Kelly said, is to stick to a great master, and then to extract as much knowledge as possible.

“I was told, ‘find someone you admire, and be as useful to them as humanly possible, and you will learn a trade,’” Kelly said. “I think you sure sound like a very smart young person, and you want to ace the test, and know everything about everything, all new platforms and all that. But find someone great and get as close as possible. Soak it up. For me, that made all the difference in the world.”