Former Condé Nast Editor Plans a Vanity Fair for the Substack Era

A former editor of Vanity Fair has been working on creating a digital publication with a business touch for several years: the authors will share in the subscription income.

Imagine Vanity Fair meets Substack, the subscription newsletter platform that has attracted 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 will 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. Mr. Kelly has spoken to several well-known journalists, including Wesley Lowery, formerly of the Washington Post.

The publication would rely on an algorithm to measure how many readers bought a subscription because of a particular writer. Mr Kelly is recruiting some of his former colleagues, people added.

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April 14, 2021, 3:30 p.m. ET

Another new aspect is the financing. One of the backers is private equity firm TPG, which would take three seats on the Heat Media board, one of which goes to its co-managing director Jim Coulter.

Another investor is 40 North, a related investment arm of Standard Industries, a global industrial company. David Winter, its co-managing director, would also take a seat on the board. According to the population, Heat Media has raised around $ 7 million so far.

Mr. Kelly and TPG declined to comment. 40 North did not respond to a request for comment.

Mr. Kelly left Condé Nast, the publisher of Vanity Fair, in March 2019 and joined TPG shortly afterwards. 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 and Jon Miller, a former News Corp manager, invested in the Geek Culture Fandom website, which had recently acquired the Focus Multimedia gaming website. Last year, a TPG partner acquired the soccer website Goal.com, and the company recently announced plans to acquire a stake in DirectTV.

The two companies’ money would give the start-up security if some of the biggest digital media players like BuzzFeed, Vice, Vox Media and Group Nine stumbled upon as the pandemic hit the advertising industry. They talked about doing mergers or going public to please their early investors.

Mr. Kelly and his business partners – Joe Purzycki, founder of the podcasting company Luminary Media, and Max Tcheyan, who helped set up the sports website The Athletic – are aiming for a different idea: the creator economy. Heat Media aims to give writers a sense of freedom of choice, but also the protection of salaries and resources.

According to two people who saw a pitch deck on the company’s plans, it sees its potential competitors as Washington news site Axios, tech news site The Information and Vanity Fair.

As media companies large and small depend more on readers for revenue, it may be inevitable for the industry to tie a writer’s payment to subscriptions.

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