I have learned to be skeptical towards the role of private capital in systemically important tool providers for journalism organizations. Capital's requirements for growth and margin expansion can be uniquely bad for journalism tools, and even more so for the systems we rely on to manage audience data. To be clear, I don't have a perspective on the role of private capital in journalism organizations themselves, and I'm sure there are good reasons for some journalism tools to take it too — experimentation in digital media is good, and many bold experiments require substantial initial investment. I just haven't seen it work out in the long run.
At Alley, we've always tackled new ventures ourselves, the hard way: One customer at a time, using revenue to fund product development. As we're building Allegro Audience to revolutionize audience technology for news organizations, we're sticking to our plan. We don't think publishers can afford otherwise.
The logic that governs private capital is so straightforward that it is commonly reduced to an Excel spreadsheet. An investor puts money into a business, and then they can't use that money until it's returned by the business, most commonly in an exit event. Startups are inherently risky, so investors expect a high rate of return in exchange for the naturally high rate of failure. This is all well and good in high-growth sectors, but journalism is not a high-growth sector.
New Old Web is a blog published by Alley and Lede. We're researchers, strategists, designers, and developers who want to make the internet a fun place to live and work.
At Alley, we're owned by our partners, all of whom work in the business every day, and we have no outside capital. This allows us to have an uncommon level of patience and the ability to say "no" or "not now" to any idea that would take our business in the wrong direction. It lets us be more cause-oriented than most investors would tolerate.
The first reason I’m skeptical of outside capital's role in news products is simply that we at Alley have been burned repeatedly, and watched our customers get burned too. For sixteen years, we've seen venture-backed vendors rapidly gain market share, then price themselves out of news media as they begin to appeal to richer customers — technology firms, direct-to-consumer startups, existing consumer brands, sports leagues and teams — all these segments share more than a few things in common with journalism distribution models but have substantially favorable economics. This setting of a uniform prices for all segments almost always goes badly for news organizations because we have lots of traffic, which is easy to measure, but earn very little per unit of traffic. As a consultant, I have repeatedly encouraged these firms to engage in price discrimination as they grow into new markets, but few have done so.
Why do startups try to grow through news? Some founders come from journalism or news products and are pressured into other markets by their funders. Others believe they can battle-test their ideas in news and then take their success (and wall of familiar logos) to other segments.
If we get burned when venture-backed tools enter other markets, what happens when venture-backed tools go bust? Same basic thing, actually, which is that we can't use them anymore. In both cases, publishers get stuck in a cycle. Buy the shiny new thing and then buy a new one in three to five years because the old one is too expensive or has been sunset entirely. This cynical logic is so commonplace that plenty of well-established news organizations just assume that they'll have to do this.
My second reason for disliking venture-funded journalism tools is that I believe press freedom is simply too important to be a testing ground for would-be unicorns unless they can provide a fundamentally new surface area for the commerce of journalism. Publisher payment systems that merely provide modern iterations of old functions but charge a significant portion of a publisher's digital revenue are rent-seeking. We've also found that many of these tools essentially need to be bought twice. Pay once for the software, pay again to integrate it.
Meanwhile, the technology needed to power sophisticated audience systems has gotten progressively cheaper and easier to use. Fifteen years ago, processing the scale of traffic that a typical metro daily newspaper website receives, in the realm of 5-10 million page requests per month, would have required a complex series of data collection, transformation, and storage tools. In 2026, we can happily insert rows into any common relational database at this rate, and modern column-store databases give us a lot of flexibility to expressively store complicated data and access it quickly. That collapse in cost is what makes it feasible to build Allegro Audience the way we have — without outside capital, and on open-source tools that many publishers can maintain.
The publishers who own their audience relationships and the tools underneath them are the ones who will still be standing. That's what we're building, and we'd rather build it with you than sell it to you.
If you're interested in exploring what we've built, get in touch with us at AllegroAudience.com. If you want to hear more about it, drop your email below.
