Welcome to the very first edition of Extra Crunch’s Media Roundup. Over the past few months, we’ve launched features like Decrypted, Deep Science and The Exchange, which aggregate and analyze the latest news in a given sector, so it seemed overdue to do something similar for media.
The goal is to provide a regular update on what entrepreneurs in the content or advertising business should be thinking about. That doesn’t just mean startup funding — we’ll track the broader landscape, including platform policies that could affect everyone — which is just as important as knowing who’s getting checks.
If you have any thoughts on what you’d like to see included in future roundups, please let me know in the comments below.
Let’s get started.
Facebook may ban news sharing in Australia
This is part of an ongoing dispute between Facebook and the Australian government, which has created a plan that would require Facebook and Google to share revenue with Australian news publishers whose content appears on their services. Both companies have a complicated relationship with the news business, with many publishers both relying on large platforms for traffic while also resenting the fact that those platforms take the vast majority of digital ad revenue.
In an attempt to improve that relationship, Google and Facebook have committed in recent years to investing hundreds of millions of dollars in journalism — and while those efforts are commendable, it’s worth asking whether publishers should be entitled to more by law, not just as a gift.
According to The New York Times, Google and Facebook have signaled that they aren’t opposed to paying for news content in theory, but they are particularly unhappy about a provision that would force them into arbitration if they can’t agree on terms with a publisher. So in a blog post published on Monday, Facebook’s Will Easton wrote, “Assuming this draft code becomes law, we will reluctantly stop allowing publishers and people in Australia from sharing local and international news on Facebook and Instagram.”
It remains to be seen how much this is a negotiating ploy, but it’s worth noting that this isn’t the first time national governments have attempted to force digital platforms to pay publishers. Spain passed a law in 2014 requiring Google to pay publishers when it included their stories in Google News; in response, Google shut down Google News in Spain.
Patreon joins the unicorn club
When I surveyed investors over the summer about what they’re looking for in media startups, one of the recurring (albeit unsurprising) themes was that they’re less interested in straightforward content creation companies, and more in startups that can find new opportunities, particularly as new formats and business models emerge.
Case in point: Patreon, which announced this week that it has raised $90 million at a valuation of more than $1.2 billion. Under the Patreon model, fans can sign up to make regular payments to artists they want to support, often in exchange for exclusive content. The company told the Wall Street Journal that with many artists’ and creators’ incomes diminished by the pandemic, more are turning to Patreon for income — for example, the number of musicians launching on the platform tripled from March and May. In fact, the company says there are now 6 million fans on the platform supporting 200,000 creators.
It’s also worth contrasting Patreon’s growth with Kickstarter, which laid off nearly 40% of its staff earlier this year, citing a 35% drop in projects on the platform. These are two different companies at two different stages, but it does seem like regular income would be a lot more appealing for creators right now.
If you want to take a deeper dive into Patreon’s business, make sure you read our in-depth EC-1 analysis from last year.
Americans have complicated feelings about the news
I regularly receive pitches from new startups claiming to combat journalistic bias and rebuild public trust in the news. Those are worthy goals, and I’m not looking to single out any particular founders for criticism here — but sometimes it’s hard to escape the feeling that some entrepreneurs from outside the news business haven’t thought too seriously about the problem.
One starting point: Understanding how Americans actually feel about the news, as illustrated in a new survey from the Pew Research Center, which found that 63% of U.S. adults said it’s better for the public to be skeptical of the news media, while 75% said it’s possible for the news media to improve their reputations. The study also looks at the partisan divide — not just in opinions on whether news organizations make mistakes, but also why those mistakes happen. Apparently, 60% of Republicans feel that a desire to mislead is a major reason for mistakes, while only 32% of Democrats feel the same way.
One of the most surprising findings to me was that 72% of respondents said news organizations could do a better job of disclosing where their money comes from (which is why our stories about Verizon always include awkward reminders that Verizon Media owns TechCrunch). Something I found pretty encouraging: 51% said they feel more confident about a publication after they see corrections.
Andrew Sullivan says he’s making $500,000/year from Substack
If you haven’t been following the latest controversies around writer Andrew Sullivan, I congratulate you. Ben Smith at The New York Times has a good recap, but that’s not why I’m linking to his story. Instead, I wanted to point out the fact that Sullivan recently moved from New York Magazine to reaching readers directly through his own newsletter on Substack — and he said his annual income has grown from $200,000 to $500,000 as a result.
As a point of comparison, The Dispatch is the flagship news organization built on Substack, and Editor/CEO Stephen Hayes told me back in March that it had surpassed $1 million in annualized revenue, with nearly 10,000 subscribers.
It may be a coincidence that Sullivan and The Dispatch generally write from a conservative perspective, albeit one that’s generally in opposition to President Donald Trump. It’s also worth acknowledging that these kinds of examples get highlighted because they represent the high end of what’s currently achievable — it’s a marker of what’s currently possible on the platform, not what a normal writer should expect.
“Tenet” rakes in $53 million on opening weekend
We’ve been tracking the stop-start progress of theater reopenings in the United States, both as a crucial component of entertainment economy, but also as the flip side of streaming growth during the pandemic. With theatrical attendance already declining domestically, many wondered whether COVID-19 would kill that side of the business and cement streaming’s dominance for good.
Put another way, will people still care about seeing movies in theaters after spending so many months watching them from home? “Tenet”’s opening weekend provides a tentative answer: Yes.
The Christopher Nolan film — the first big Hollywood blockbuster to premiere on the big screen since theaters closed — exceeded expectations on its $53 million opening weekend, a number that’s particularly impressive since the film has not yet opened in the two biggest markets, the U.S. and China.
It remains to be seen how well “Tenet” does when it comes to U.S. theaters (in markets where theaters are actually open) this weekend. Meanwhile, Disney is conducting a very different experiment. Rather than slowly rolling out the live action remake of “Mulan” to theaters where possible, or simply delaying its release once again, the studio is releasing the movie on Disney+, with subscribers having to pay an additional $29.99 for access.
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