A former editor at Vanity Fair has been working on creating a digital publication with a business touch for more than a year: the authors will share in the subscription revenue.
Imagine Vanity Fair meets Substack, the subscription newsletter platform out there dressed well-known authors.
The new company behind the release, Heat Media, is hoping to showcase it in the coming months, said four people with knowledge of the matter. The startup comes in part from Jon Kelly, a former editor at Vanity Fair who worked under its former editor-in-chief, Graydon Carter.
If everything goes according to plan, the startup’s contributors include writers whose contacts include the power elite of Hollywood, Silicon Valley, Washington, and Wall Street. An annual subscription would cost $ 100 and could include a daily newsletter, website, and access to events. The publication does not yet have a name. One of them is Puck, the name of an American humor magazine of the late 19th and early 20th centuries.
The writers were offered equity and a percentage of the subscription income they would generate, people said. This is one of the first attempts to reconcile the new talent economy with more traditional media institutions. The publication would rely on an algorithm to measure how many readers buy a subscription because of a particular writer, people said. Mr Kelly has been actively recruiting some of his former colleagues, people added.
Another new aspect is the financing. One of the backers is private equity firm TPG Capital, which would take three seats on Heat Media’s board of directors, one of which goes to its co-managing director Jim Coulter.
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Another investor is 40 North Media, the investment arm of Standard Industries, a construction materials company. David Winter, its co-managing director, would also take a seat 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 shortly thereafter joined private equity firm TPG. The company’s head, Mr. Coulter, is friends with Mr. Carter, and TPG supported Mr. Carter’s Post-Vanity Fair project Air Mail.
The start-up’s business model is an early attempt to combine Substack’s entrepreneurial system of allowing writers to earn money directly with subscribers with that of traditional publishing.
For TPG, the investment is the latest in the media business. In 2018 the company joined a former News Corp executive director Jon Miller invest by doing “Geek cultureSite fandom recently acquired gaming website Focus Multimedia. Last year a TPG-Partner has acquired the soccer website Goal.comand the company recently announced plans to acquire a stake in DirectTV.
The two companies’ money would give the startup some security if some of the biggest players in digital publishing like BuzzFeed, Vice, Vox Media and Group Nine stumbled upon as the pandemic hit the advertising industry.
Kelly’s business partners are Joe Purzycki, founder of podcasting company Luminary Media, and Max Tcheyan, who helped set up the sports website The Athletic.
Two people who saw a pitch deck on the company’s plans said its potential competitors are Washington news site Axios, the tech news site The information and Vanity Fair.