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So What Do You Do, Sharon Waxman, Founder of The Wrap?
The founder of the entertainment start-up gives us the scoop on the site's first year and the state of the Hollywood trade press- February 24, 2010
When she started her career as a Middle East reporter for wire services, Sharon Waxman says she really didn't envision that she'd end up covering Hollywood. "Was I on the Gaza Strip trying to find an innovative way to get back to the Golden Globes?" she asks with a laugh. "No." Yet, years later, that's where Waxman has built her formidable reputation as a reporter and editor, first with the Washington Post and the New York Times, and now with her own site The Wrap -- which has made plenty of waves in the entertainment industry as a startup news organization. mediabistro.com spoke to Waxman recently about how The Wrap's first year has gone, the state of the Hollywood trade press, and the pros and cons of paid content online.
Name: Sharon Waxman
Position: Founder, The Wrap
Hometown: Cleveland, Ohio
Education: Barnard College, St. Antony's College
Resume: Started out as a reporter in Washington, D.C., and then became a wire service reporter the Middle East. Moved to Paris to be a freelance writer for six years and later to California, where she worked as a writer for The Washington Post's Style section for eight years. Spent four years as the Hollywood correspondent for The New York Times before launching The Wrap in January 2009. Author of Loot: The Battle over the Stolen Treasures of the Ancient World and Rebels on the Backlot: Six Maverick Directors and How They Conquered the Hollywood Studio System.
First section of the Sunday New York Times: "I read the Times online."
Favorite TV show: Big Love
Last book read: Star: How Warren Beatty Seduced America, by Peter Biskind
Guilty pleasure: "Sleep."
Twitter handle: @sharonwaxman
The Wrap has now been around for over a year, during which time the site has inserted itself pretty aggressively in the Hollywood ecosystem and broken quite a few big stories along the way. Has it gone the way you expected?
I actually didn't know how it was going to go. I had been warned by Jim VandeHei of Politico to be prepared that, "You know nothing that you think you know." And he was right about that. It was all very much uncharted territory for me, in terms of knowing if people would read us, or knowing if we would be able to attract the right people. Knowing if the content management system that we built was going to work the way it was supposed to.
|"Every time you hit a milestone in the beginning -- in the first four or five months -- you think, 'Okay, that's the last time we're ever going to hit that.' And then we'd surpass it."|
It has, actually, been a pretty steady trajectory for us. But every time you hit a milestone in the beginning -- in the first four or five months -- you think, "Okay, that's the last time we're ever going to hit that." And then we'd surpass it. Then Michael Jackson died in June, and we had our biggest traffic month ever. We doubled our traffic in a month because people were so interested in that story, and because we broke a couple of other major stories earlier in the month. When that happened, my COO Kevin Davis and I looked at each other and said, "Well, that'll never happen again." And then, of course, it did. So it's been a really fantastic year, because it's been about one stage of growth after another and watching The Wrap become pretty rapidly accepted as a credible source.
Was it hard to gain that credibility?
Actually, the fact that we are a credible source was accepted pretty instantaneously, and that was pretty cool. But that's really because all of us know each other in the media world. And so you know that if you have someone who's credible moving from [one] platform to another you say, "Who reported this story?" and that's where it comes from.
If you have investors who don't understand the space entirely and we tell them that if we break a story, then people will pay attention, they ask, "What's your marketing strategy? You have no marketing budget." And I say, "We're going to break news. People will pay attention if we break news." I did believe that, but what happens is that if you break a piece of news, then that brings more people to you who are interested in having you break news. And then those people turn to you to break news. And so that becomes, itself, a marketing strategy, in terms of how you build and grow audiences.
It's not just credibility. I mean, I have a sign above my desk, that I scrawled one day that says, "Be essential." And I transmit that message all the time in our meetings. We have to give people information that is essential to their lives. Otherwise they have no reason to read us.
As you've been on the upswing this year, traditional entertainment media -- like Variety and The Hollywood Reporter -- have been on the ropes. Why do you think that's happening, and how soon do you think one of them will go under?
Variety and Hollywood Reporter are in trouble for the same reasons that all print media is in trouble. They're very much part of the collapse of the print business model. But it's exacerbated by the fact that they've not adapted -- really at all -- to the needs of the digital age. So their Web sites have been losing traffic steadily over the last year or two. They've been in the same kind of death spiral as newspapers -- they've been cutting staff and laying off talent, thereby giving readers less and less reason to read them, and therefore attracting less advertising, therefore needing to cut staff more, et cetera. And so they're really in that cycle, and they've not figured out how to make their content essential to their audience.
|"There's no captive audience anymore, so you have to prove it every day and earn it every day."|
Far too many people in Hollywood will tell you that they do not read the trades very much anymore. I knew that that was true from before I even started The Wrap. For a very long time, the trades were unbelievably profitable because they had a captive audience, but the Internet changed all that. There's no captive audience anymore, so you have to prove it every day and earn it every day.
You can't say, "I'm Variety and therefore you will come to me and read me." That's only good for so long. The content experience and the content itself has to be worth people's time.
Your revenue model for the site at its inception was in large part about ads. I'm wondering whether you've been looking into any other revenue streams, or whether you've adjusted your model at all in the past year.
We immediately -- because of the climate in which we launched -- were aware that we were going to need to find other revenue streams. I always had a business model with other revenue streams, but advertising was always the main revenue stream that we intended to rely on. Advertising was extremely challenged last year, and we just don't know when it's going to come back -- or if it will ever come back in the same way. In general, the advertising digital-to-print ratio is changing, it's improving, but it's nowhere near parity. We actually have three revenue streams at the moment: advertising, syndication and events.
Because we report our own original stories and write them -- which is not the case with many news sites that mainly aggregate news -- we can actually sell that content to third parties. For example, we have a deal with MSN.com, and they pay us for our content in addition to sending us vast amounts of traffic. And I think that we will be finding other partners that want to syndicate our content in a way that does not cannibalize the core audience coming to the site. I think there's a way to balance that.
|"I don't envision the home site being anything but free. So the challenge then becomes finding the right content that a certain segment of readers will pay for."|
What you think of The New York Times's plans to charge for content online?
I think it's really brave, and I really hope it works. I think that the future of quality journalism has to involve payment by the reader and the user, and I'd like to see The Wrap get there too... though I don't envision the home site being anything but free. So the challenge then becomes finding the right content that a certain segment of readers will pay for.
I have a philosophical belief that people should have to pay for quality content -- that they should not be able to get it for free. The idea that you value something more if you pay for it is something that I also subscribe to. If you get it for free, you do not value it as much. So, like a lot of outlets, we are looking at that and watching other people who are doing that.
You're known as a very competitive reporter. Who is The Wrap's main competition? Often the site gets put into a category with Deadline Hollywood or sites like Huffington Post and TMZ.
We compete with everybody to break news. Whoever it is in this space, we want to be able to say we got it first. But "getting it first" doesn't mean that someone gave it to you five minutes before everyone else got the press release. I don't really think that's very meaningful to readers. We just want to be on the news all the time, all the time. So, absolutely, Deadline Hollywood's in the business of breaking news, and so is TMZ, and we compete with them.
But when it comes to that second stage of analysis and commentary, we're very different from those sites. We're very much like a large news organization in that we really want to go out and break the story, and then we want to come back and tell the reader why it's important and put it in context. In that sense, we're actually competing with the The New York Times, The Wall Street Journal, and the L.A. Times. We don't have the size of the reporting staff that those places have, but in our sector we have the same expertise. We have the top people in this space who are reporting, I believe. We have the sources, but we don't have the graphics staff, and we're not in print.
Nikki Finke's Deadline.com sold in July 2009 for what was reported to be many millions of dollars. Your traffic, from what I can tell, is not far off from theirs. Do you have plans to sell at some point?
We don't have any plans to sell The Wrap right now. We have investors, and our investors expect to be able to get a return on their investment, which I fully intend to give them. We're funded by a venture capital firm, so they're not in it for the fun. But right now, I'm not really thinking about when we sell the company. I'm thinking about this huge growth opportunity that we have. So we're currently looking at expanding -- expanding our coverage in other verticals that are related to entertainment. And we are raising money at the moment for that expansion.
I definitely wouldn't rule out our finding an alliance with some bigger media company down the road, but right now I think we're very much at the beginning of this venture, and I think we feel that we're on the map in a really significant way, and that there is a huge opportunity for us to become the number one voice in the space. That's really the goal. And my goal is to create a business model that works for quality journalism.
Clearly we're not the only people who see that business model out there, but it's all about being able to execute it successfully. So far, we're doing that -- and we're having an amazing time.
David Hirschman is editor of mediabistro.com's Daily Media News Feed.
[This interview has been edited for length and clarity.]
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