At the national magazine awards in Toronto last month, the Grid, TorStar’s weekly free city magazine, picked up seven medals, including five golds. Two weeks later, management laid off a quarter of its editorial staff, including deputy editor Pat Lynch and staff writer David Topping.
At the time I tweeted that anyone who looked at the Grid and wondered “How are they paying for all of that?” now had an answer. That wasn’t meant to be a slight. I enjoy the Grid. It has high production values, an experienced, and I would imagine not inexpensive staff, and what has to be a solid freelance budget. And they have all that despite being in the print advertising business, which is a tough business to be in right now.
The truth is “How do they pay for that?” is a bit of an obsession of mine. If you came into journalism when I did—I’ve been working since 2005—it’s hard for it not to be. In the last eight years, I’ve worked at a newspaper whose parent company went bankrupt and a news service that no longer exists. I’ve also written here about the collapse of the old print-ad driven newspaper model. As a result, I have a morbid and personal fascination with the finances of publications I like.
Which brings me to Hazlitt.
An online offshoot of Random House Canada, Hazlitt won its own bushel of awards at the NMAs last month, including magazine website of the year—that despite being less than a year old. The site publishes a daily line-up of cultural essays, books pieces and original fiction. It’s a mix one Hazlitt founder described to me as a hybrid of Salon, Slate, McSweeney’s and Granta.
The whole thing can be a bit uneven at times. But it’s also, often enough, brilliant. Senior editor Alexandra Molotkow’s column is one of my favourite things on the Internet (or in print for that matter). And Sarah Nicolle Prickett’s essay on James Salter was passed among my friends with a kind of holy-s–t-I-can’t-believe-how-good-this-is vibe.
The other thing about Hazlitt, though, the one that sticks out to me, is that it doesn’t have any visible means of generating significant revenue. The site has no ads. There’s no paywall, no sponsored content, no donate-here-to-support button. They do produce e-books, but not in the volume you’d need to subsidize the free—and high quality—content they’re pumping out every day.
So how are they paying for it? The short answer is, they aren’t, at least not yet. For now, Hazlitt is fully funded by its corporate parent, according to Robert Wheaton, who oversees the project as director of strategic digital development at Random House Canada.
Hazlitt, Wheaton says, supports his company’s larger mission. It’s helping them build a public, supporting a daily dialogue about books and ideas, and developing new and emerging writers. So if it doesn’t generate enough income to pay its own bills right away, well, that’s not the point. “It’s one of those things that in the context of our whole business it makes sense, even if, page by page and article by article, it doesn’t,” he says.
That’s not to say there’s no plan to monetize Hazlitt eventually. “That’s sort of the second phase of what we’re doing,” says Christopher Frey, the site’s editor in chief. “The first phase is getting the site up itself. The long goal is to come up with a sustainable model.”
Frey doesn’t know precisely what that model will look like. “Nobody really knows where the money is going to be on the web,” he says. There’s also no set date by which the site has to be profitable. “The success is, are we serving our publishing mission?” says Wheaton. “And we’re going to see where it goes in terms of immediate revenue opportunities, but long term revenue opportunities as well, because that is maturing on the web.
“It used to be ads and paywalls. Those were your options. But now there’s a model of that dream of micropayments, that 1998-era, everyone would pay 2 cents to read an article [idea]. In some ways, it’s starting to feel like e-books could be that model. And I think that’s why a lot of magazines and newspapers, why the National Post and the Walrus and Maclean’s, are experimenting in that space. That is a way to monetize content. It’s a way in which people are paying for digital goods.”
For Wheaton, Hazlitt is at once very current—it’s a product of the dissolving walls between magazine, newspaper and book publishers—and a throwback to a very old model. In the 18th century, publishers ran their own coffee shops and presses, he says. “So you’d have writers and readers engaged in conversation, fueled by caffeine, and in the back of the building there was a printing press printing manifestos and pamphlets and essays.”
Hazlitt is, in other words, a place for Random House to get people talking about books at a time when mainstream coverage of literature is on the decline. In that sense, it provides value to its corporate parent outside of whatever revenue it generates. (At the same time, the site doesn’t talk about only Random House books. The company made it very clear early on, Frey says, that for Hazlitt to have credibility it would have to write about books from all publishers.)
In its best month so far, Hazlitt has attracted 160,000 unique visitors, Frey says. It operates off a budget Wheaton calls “not the New Yorker” but healthy enough to let them play. And it pays writers rates Frey describes as competitive with the best web publications in the U.S. and in some cases competitive with Canadian newspaper rates. “I’m too old to ask people to write for free,” he says.
Wheaton says one goal of the site is to be for culture what The Verge is for tech or Quartz is for business. To me, though, the better comparison is ESPN’s Grantland, in both financing and tone. The Verge, part of VOX Media and Quartz, an Atlantic offshoot, were both launched with the goal of making money right away. Their revenue models will evolve, but they were also in place from day one. Hazlitt, like Grantland, feels more like a place to develop new voices with the backing of a corporate partner willing to risk a bit of capital to see what happens. They are investments in new forms and new models—more idea labs than bankable money makers. “I think the important part is we’re developing a publishing model that no one else has done yet,” Frey says. “And we believe in the voices. We believe in the writers. That’s what we built Hazlitt around.”