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March 3, 2024

Messenger Shuts Down After Less Than a Year, Leaving Employees Stunned

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Feb 1, 2024

The Messenger, an ambitious digital news startup aimed at reaching affluent young professionals, announced Wednesday that it is shutting down operations effective immediately after less than a year since its launch. Employees were stunned by the sudden closure, with most finding out not from leadership but from media reports.

Background on The Messenger

The Messenger first made headlines in March 2023 when it was unveiled by owner Jimmy Finkelstein as a “next generation news brand” targeting growth in digital subscriptions. Backed by $20 million in seed funding, the New York-based outlet hired nearly 100 employees to cover business, technology, luxury goods and lifestyle stories.

The company aimed to leverage data analytics to cater content specifically to young professionals earning over $200,000 per year. This target demographic was woefully underserved by current news publishers, Finkelstein argued.

However, The Messenger struggled to build an audience and obtain paying subscribers from the start. Headlines touting luxury brands and high-end real estate failed to resonate with millennials burdened by student loan debt and rising cost of living.

By late 2023, it became clear that the core strategy was flawed. Leadership scrambled to shift focus towards more general interest news and investigative pieces. But despite winning awards, the revised approach failed to deliver a meaningful boost in site traffic or subscriptions.

Employees Blindsided by Shutdown

On January 31st, 2024, Finkelstein informed staff that The Messenger would cease operations immediately in a brief emailed statement. Stunned employees first learned that their jobs were eliminated from media reports tweeted by New York Times reporter Ben Smith and others.

Finkelstein’s email blamed the shutdown on insufficient audience and revenue growth. He announced that staff would not receive any severance pay, unused paid time off, or health insurance. The lack of warning or transitional assistance outraged many impacted by the layoffs.

Over 75 employees across editorial, sales, product and technology departments were affected. As the outlet failed to build traction, extensive layoffs throughout 2023 had already reduced headcount by half from its initial size.

Expected Fallout Across Media Industry

The abrupt nature of The Messenger’s failure sent shockwaves across the digital media landscape. Many publishers had applauded the founding team’s credentials and ambition last March. Now the episode may deter venture capital and private equity firms from funding similar startups in the near future.

Industry insiders say established news brands like The New York Times, Washington Post and Wall Street Journal will become even more dominant as investors flock to proven models. Struggling publishers may find credit lines frozen as lenders grow wary of market turbulence.

For media professionals, The Messenger’s collapse signals continued volatility ahead. As outlets face pressure to cut costs, job security increasingly hinges on audience growth and subscription sales rather than journalistic merits alone.

What Went Wrong? Analysis of Flawed Strategy

In announcing the closure, Finkelstein acknowledged failures to build a sufficiently large audience and viable subscription business. But many critics argue the underlying strategy contained deeper flaws.

Founding Assumptions Reality
Strong demand for luxury/lifestyle news among young professionals Apathetic response, debt burdens limit willingness to pay
“White glove” personalized content via analytics Perceived as elitist, tech failed to scale
2023 optimal time to launch news outlet Macro economy deteriorates, risk aversion rises

“The Messenger fundamentally misjudged its audience,” said long-time media analyst Ken Doctor. “Data can help editors make content decisions at the margins. But no algorithm could override the fact that ostentatious wealth is deeply out-of-step with this generation.”

According to its mission statement, The Messenger sought to “empower the ambitious” with “reporting for leaders and innovators.” But modern young professionals rarely identify with the extravagance and exclusivity touted.

By attempting to build a luxury niche brand, The Messenger sacrificed both higher traffic potential of general news and loyalty of a distinct subculture like business or tech. It was left stuck in no man’s land.

Bleak Future for Digital News Startups

The disappointing outcome casts further doubt on the viability of scaling digital journalism. Over the past decade, venture capital has poured billions into publishers chasing young readers online. Even well-funded players like Buzzfeed and Vice have struggled to turn profits though.

Partisan ideological media frequently outperforms established brands for audience engagement on social channels. But sustainability concerns plague both models. As economic outlook darkens, investors may abandon digital news as an excessively risky sector.

While exceptions exist like Axios and The Athletic, successful subscriber conversions generally rely on specialized topical expertise rather than demographic targeting. Wooing fickle online audiences proves extremely expensive -especially for broadly focused outlets.

Of course quality content matters too. But building a brand and platform that resonates with users at scale is infinitely harder. The Messenger’s abrupt flame-out shows even tens of millions in capital cannot guarantee that crucial ingredient. The next wave of news disruptors may need to set their sights lower.

What Happens Next For Laid Off Employees

Nearly 100 journalists, analysts, engineers and business operations professionals now confront unemployment. Most are young, many carrying substantial student loan debt. Health insurance has already been terminated by The Messenger effective immediately.

With no severance or notice period, affected staffers must urgently cut expenses and search for new positions. But abrupt layoffs spanning an entire organization presents daunting challenges.

“I’m worried employees will be scared away from media startups after this,” said Casey Johnson, a tech reporter for The Messenger. “We took a chance on this place because they made big promises. Now we’ve been burned badly without even getting paid time-off.”

While larger publications continue hiring, most openings seek experienced candidates proven to increase subscriber conversions. Displaced Messenger employees may need to pivot industries or accept lower salaries at smaller outlets.

Uncertain economic conditions further cloud job prospects across white collar sectors. With tech and finance industries shedding workers, media layoffs could persist throughout 2024. Unfortunately The Messenger team seems poised for an especially messy transition.

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AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

To err is human, but AI does it too. Whilst factual data is used in the production of these articles, the content is written entirely by AI. Double check any facts you intend to rely on with another source.

By AiBot

AiBot scans breaking news and distills multiple news articles into a concise, easy-to-understand summary which reads just like a news story, saving users time while keeping them well-informed.

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