The News Movement Showed How Hard It Is to Profit From Gen Z on Social Media
In late 2020, a news start-up began pitching investors on a bold vision: By creating content native to social media for Gen Z audiences — and later acquiring brands like The Daily Mail — the company would begin to create “the Amazon of News” within five years.
“We must create a movement,” read a pitch deck for the company viewed by The New York Times. “A movement hungry for the facts and thirsty for the truth.”
That company, which eventually became known as The News Movement, was co-founded by Will Lewis, a media executive who was named chief executive of The Washington Post last year.
In early June, Mr. Lewis announced a new division in the newsroom that would focus in part on “social media journalism” to help turn around its ailing finances. The announcement, made alongside the news that the paper’s executive editor was leaving, ultimately led to internal strife and questions about Mr. Lewis’s leadership and ethics.
Yet The News Movement may provide a cautionary tale about how difficult it is to make money from the oceans of viewers who consume news on social media platforms like TikTok and Instagram.
Since it was founded in 2021, The News Movement has struggled to wring profits from its more than one million followers on social media, according to interviews with current and former employees and documents obtained by The Times. In 2023, Mr. Lewis’s last year at the company, it lost millions of dollars and slashed its staff, and this year it did not renew an important partnership with The Associated Press. (Mr. Lewis still holds an undisclosed stake in The News Movement.)
The News Movement has sharply reduced the revenue it expects to generate from social platforms such as TikTok this year, to $6,100 per month from $15,800 — “to be more realistic” — and still often misses that reduced target by a wide margin, according to a financial document. Midway through last year, it projected losses of $9.5 million in 2023, according to another document.
Now, the company is in talks to sell a controlling stake to Antenna Group, a Greek media company partly owned by MBC Group, a broadcaster partially owned by the government of Saudi Arabia, according to two people briefed on the discussions.
Ramin Beheshti, chief executive of The News Movement, declined to comment on any specific deal negotiations. Antenna did not respond to a request for comment.
But Mr. Beheshti said in an interview that the company had always looked beyond social media platforms for financial growth. The company operates a content studio that is independent from its newsroom and fickle social networks like TikTok, and it has made videos for clients including Amazon.
“Once we’ve got that following, there are numerous ways that we will be able to monetize our scale,” Mr. Beheshti said. “We know that social platform monetization is not something to be relied on.”
In a statement, The Washington Post said that it has seen “tremendous engagement” from its yearslong efforts to reach users on social media.
“We will deepen our abilities to reach new audiences with additional products and formats and are currently setting up the structure and plans for this next era of growth at The Post,” said a Washington Post spokeswoman, Kathy Baird.
The News Movement, which has raised $15 million and employs about 50 people, is the latest in a long line of digital media start-ups that have struggled to deliver significant profits from online news. BuzzFeed News, Vice Media and Mic.com all either shut down, filed for bankruptcy or dramatically cut staff as a result.
By focusing on building an audience through social media, The News Movement took a similar tack to those companies — years after they ran into major problems.
The News Movement was conceived by Mr. Lewis in 2020, not long after he stepped down as chief executive of Dow Jones, the publisher of The Wall Street Journal. The idea was to create an alternative to legacy media, which was “shackled by regulation,” according to a pitch deck. Mr. Lewis, a veteran of Rupert Murdoch’s media empire, said traditional outlets were polarized by “Foxification” or “stultified by pernicious ‘balance,’” citing the BBC as an example.
“Most stories from traditional newsrooms go unread or unwatched in large numbers: the industry’s dirty secret,” the pitch said.
The News Movement began publishing in 2021 after Mr. Lewis recruited a cadre of former co-workers from Dow Jones and The Telegraph. The company initially operated out of the London offices of the British broadcaster ITN and debuted on YouTube with a video featuring its chartreuse polygonal logo.
In October 2022, The News Movement held a splashy party to celebrate the opening of a New York office. Upon arrival, attendees were thrust into a skit featuring a fast-talking actor dressed as an old-timey newsman in a room representing the news industry’s past, littered with paper. After that, they were ushered into a room with large vertical monitors and canapés representing the future of the media business.
As time went by, The News Movement increased its investment in lighter topics, such as entertainment, lifestyle and sports. The company began adopting the “HIPPO” method for engaging its audience, short for “hook + intrigue, pace and payoff.” It also tried to make money from paid Instagram subscribers, but that has been slow going, too, with about nine subscribers contributing $36 monthly, according to an internal document.
Mr. Beheshti said the company reduced its social media revenue targets this year after deciding to post fewer videos clipped from other news sources.
“That was a decision we took midway through this year, so that for the brand and for the long-term audience, we were creating more original content,” he said.
In early 2023, The News Movement announced that it was acquiring The Recount, a digital-media start-up focused on political news. On paper, the deal seemed logical: The Recount cultivated more than a million followers across social media who were glued to political news, just in time for the opening acts of the 2024 presidential election. But The Recount and The News Movement were both unprofitable, and the losses kept piling up.
Mr. Beheshti defended The News Movement’s acquisition of The Recount despite the losses.
“We didn’t buy The Recount because we thought it was going to in that first year generate profit immediately,” Mr. Beheshti said. “We bought it with a longer-term strategic mind-set as we are coming into the 2024 U.S. elections.”
In October, The News Movement eliminated roughly a dozen positions, although Mr. Beheshti said it had since hired roughly 15 people, bringing its staff back to pre-layoff levels. He said that more than 60 million watch content from The News Movement on a monthly basis.
In November, The Washington Post announced that Mr. Lewis would join as chief executive in the new year. In his place, The News Movement appointed Mr. Beheshti, one of the company’s co-founders and a former colleague of Mr. Lewis’s at The Wall Street Journal, as chief executive.
Under Mr. Beheshti, The News Movement has continued to experiment with new publishing strategies, developing Top Story Turtle, a product that surfaces trending topics on platforms like Reddit before they go mainstream. He has also encouraged The News Movement to make money and reel in new customers from data reaped from its publishing operations.
The News Movement’s negotiations with Antenna Group, a company that has a long history of investing in digital media, began in recent months, according to the two people with knowledge of the talks. Antenna was an early investor in Vice Media and was in discussions to acquire that company before it filed for bankruptcy in 2023.On a call with employees last week, Mr. Beheshti said a potential investor had asked for additional information about The News Movement’s business, though he did not identify the company. He said this was a positive sign, adding that he was planning to visit the investor soon to discuss the deal.
“I’m hoping that unlocks the final stage and we’ll be able to close it out,” Mr. Beheshti said, according to two people familiar with the matter.
Eshe Nelson contributed reporting.
