A former editor at Vanity Fair worked over a year to create a digital publication with a business twist: Its authors will share subscription revenue.
Think of it as Vanity Fair meets Substack, the newsletter subscription platform that attracts big-name authors.
The new company behind the publication, Heat Media, is hoping to announce it in the coming months, said four people with knowledge of the matter. The startup is partly the brainchild of Jon Kelly, a former editor at Vanity Fair who worked under its former editor-in-chief, Graydon Carter.
If all goes according to plan, the startup contributors will include relevant writers including Hollywood’s powerful elite, Silicon Valley, Washington and Wall Street. It is said that an annual subscription will cost $ 100 and could include daily news, a website, and access to events. Publication has no name. One of which is under consideration is Puck, the name of an American comedy magazine in the late 1800s and early 1900s.
The writers were given equity and a percentage of the registered revenue they would generate, these people said. It was one of the first attempts to align the new talent economy with more traditional media organizations. The publication will be based on an algorithm to gauge the number of readers buying subscriptions for a particular writer, residents said. Mr. Kelly has actively recruited some of his former colleagues, who added.
Another novel aspect is funding. One of the backers is private equity firm TPG Capital, which will take three seats on Heat Media’s board, with one seat belonging to its co-CEO, Jim Coulter, who for know.
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Another investor is 40 North Media, the investment arm of Standard Industries, a company that focuses on building materials, residents said. David Winter, its co-CEO, will also sit on the board.
Mr. Kelly declined to comment. TPG declined to comment. 40 North did not immediately respond to a request for comment.
Mr. Kelly left Condé Nast, the publisher of Vanity Fair, in March 2019 and joined the private equity firm TPG shortly thereafter. The company’s leader, Mr. Coulter, was a friend of Mr. Carter, and TPG supported Mr. Carter’s post-Vanity Fair Air Mail joint venture.
The startup’s business model represents an initial attempt to incorporate Substack’s business system where writers can monetize directly from subscribers, with a traditional publishing model.
For TPG, the latest investment in the media business. In 2018, the company partnered with former News Corp chief executive Jon Miller to invest in the “programmer culture” Fandom website, which recently acquired game site Focus Multimedia. Last year, an affiliate of TPG bought football website Goal.com and the company recently announced plans to buy back shares of DirectTV.
Money from two companies will provide startup safety at a time when some of the biggest companies in digital publishing, such as BuzzFeed, Vice, Vox Media, and Group Nine, have stumbled. when the pandemic ravaged the advertising industry.
Kelly’s business partners are Joe Purzycki, the founder of podcasting, Luminary Media and Max Tcheyan, who helped build sports website The Athletic, they said.
The two viewed the company’s plans saying that its potential competitors were Washington’s Axios news site, technology news site The Information, and Vanity Fair.