Why the Protocol layoffs don’t make business sense

Joshua Benton of Nieman Lab writes about why the 13 layoffs at technology news site Protocol are curious.

Benton writes, “Protocol is, unlike most digital media companies, not overly reliant on ad revenue. (‘I know, maybe more than a lot of people, just how difficult it can be to rely on advertising alone in a digital space,’ Grieve told us in February.) Advertising revenue has taken a brutal hit, but one would think Protocol would be in a relatively good to deal with it. And in any event, it just launched; this stage of a young news site’s life is more about proving your worth and building an audience so you can turn on the monetization a little later on.

“Protocol’s target audience is, well, still doing fine? ‘Decision-makers in tech, business, and public policy’ are still overwhelmingly employed; many of their employers seem well positioned to gain market power post-COVID, not lose it. A moment when literal trillions of government dollars are being disbursed — no small portion of it to major corporations — would seem like a perfect time for someone offering the sort of information value proposition Protocol intends.

“The obvious way to make money with Protocol’s editorial promise and targeted audience is through paid products. Charge people [pick one: $100, $200, $400, $1,000] a year for [pick one: access to the site, premium content, a high-value membership, exclusive briefings, real-time updates]. A Protocol Pro doesn’t have to be a carbon copy of Politico Pro, but the basic model is a fit. But the staff memo indicates that paid products are now farther off than before (‘this is not the right moment to launch those products’).”

Read more here.