April 19, 2021

January 2020 found STAT, the digital launch covering medical research and the biotech industry from a Boston base, with a respectable 1.5 million monthly unique visitors and on target for profitability in its fifth year.

Then all hell broke loose. With a star reporter on infectious diseases, STAT was first or among the first to report that there was such a thing as COVID-19. Uniques jumped to 2.5 million in January, 7 million in February and 23 million in March. That has settled back to a steady 7 million, still nearly a fivefold increase.

STAT chose to keep its COVID-19 coverage in front of its paywall. That fed growth of its premium level paid subscriptions and added appeal for sponsoring advertisers. There was a second agenda, editor Rick Berke told me. Even with the quality of its science and business journalism garnering strong reviews, STAT was still new and different enough that he craved broader exposure for its work.

This spring, lead COVID-19 reporter Helen Branswell was awarded the George Polk Award for Public Service. “Branswell tracked the spread of the virus in 161 articles — more than three a week —that were almost uniformly timely and astute,” the Polk jury wrote.

STAT’s 2020 profitability came with a twist, too. Co-owner and CEO Linda Pizzuti Henry told me that she and her husband, John Henry, decided to reinvest all of what the site had earned. As a result, staffing is up roughly 50% from the start of 2020 to 69.

Would Henry say how much the couple put into STAT’s extended startup phase, fully staffed from the start editorially but with no income? No. Just that it was “a lot.”

In the manner of most solid startups, STAT has diversified revenues — a steady base of sponsored content advertising on its site, a dozen newsletters and a growing events business that provided nearly a third of revenue and successfully pivoted to virtual in 2020 and so far in 2021.

The heart of the business model, though, is paid subscriptions to premium stories known as STAT+. That will cost you $349 a year and thus puts pressure, Berke said, on him and the news staff to generate deeply informed content.

In recent years, group subscriptions have become a focus — companies or research institutions buying for a given number of employees or, in some instances, their full staff. Renewals run 90 to 95%, Berke said, a base that couldn’t be steadier as advertising ebbs and flows.

STAT does not disclose circulation numbers, but chief revenue officer Angus Macaulay told me it passed its original goal of 10,000 after its second year and now reaches a multiple of that.

The site has an interesting origin story. It was businessman and investor John Henry’s idea — he had a longstanding personal interest in science and medical journalism. STAT was sparked by a conversation at an event with former Google executive Eric Schmidt, Linda Henry told me, in which Schmidt commented that Boston’s primacy in medical research leading to biotech enterprise was not nearly as widely known as it ought to be.

The Henrys decided to start big, with quality and volume, to catch the attention of an elite professional community. Except for some shared services like human resources, they also decided that STAT would thrive by being separate from The Boston Globe, which they had bought from the New York Times Co. in 2013.

“We had pure good luck in finding Rick,” Linda Henry told me. After a long career as a political reporter and then as an editor at the Times, he was ready for a change “and knew what kind of newsroom he wanted to work with.”

Berke said that he was impatient to bring on board a staff of 30 and get going, but at the same time careful. He almost didn’t hire Branswell.

“Someone told me about her my first day on the job.” She had a 20-year career at The Canadian Press and was tops in the field. Berke was not so sure though in 2015 that infectious disease was a hot topic rather than a backwater beat. “I had her write three memos — I really put her through the wringer.”

Berke said that his motivation for leaving the Times and signing on to an unproven startup was “the opportunity to build a news organization … to tell stories that weren’t being told.”

STAT has not strayed far from its original concept but through the years has intensified coverage of Big Pharma and its business challenges. Group subscribers, CFO Macauley said, now include not just research hospitals and biotech firms but law firms, investor groups and foundations.

On a given day, the STAT site has at least a dozen stories with lead pieces like “In the COVID-19 vaccine push, no one is speaking Gen Z’s language” and “Glucose monitors revolutionized diabetes care. Now digital health startups want to bring them to the masses.”

A section highlights “Helen’s latest” and the work of two other beat reporters. Each day there is a single native advertising sponsor like Dana-Farber Cancer Institute or California biopharmaceutical company Gilead Sciences. Free spot news content is interspersed with deeper dive paywall-protected STAT+ pieces.

Even the fivefold increase in unique viewers understates how huge the COVID-19 year of 2020 was for STAT, Berke said. “Social media was up exponentially,” and content was featured almost daily on Apple News (whose traffic does not count in the measure of uniques).

Berke is hiring a couple of new reporters, but he and Henry decided most of the new job slots would go to tech, design and personalization specialists. Catching up on that kind of infrastructure is necessary to support expansion and subscription growth.

At first, Henry said, “it was hard to start a new brand. We had to give (the content) away while building out the product, figuring out the type of paywall we needed. That was a dynamic thing, lots of measuring and testing. But now the training wheels are off.”

The Globe is a clear leader in digital-only subscriptions among regional newspapers with more than 200,000. Its audience staff meets with STAT’s monthly to compare notes, but big differences in the publications make comparisons difficult. For instance, the Globe is having success with introductory discounts as deep as $1 for six months, but Berke said that would not be a match for his largely professional audience.

The two can use each others’ stories — the Globe picks up STAT content particularly for its print edition, and STAT runs some Globe stories, especially business coverage.

STAT’s takeoff has been smooth, the Globe’s bumpier with some major snafus changing circulation vendors and resizing printing operations. “We made a lot of mistakes,” Henry said.

Keeping STAT separate has turned out to be the right call, she said. “The culture of a 140-year-old organization is not what you need for a digital startup. It’s a different tempo.”

At the Globe, the Henrys have kept the editorial side intact, while turning over business leadership, now drawing from industries other than publishing. Linda Henry was promoted from managing director to CEO of an umbrella company, Boston Globe Media Partners, last fall.

Besides being a success in itself, Henry said, STAT has diversified the company. “A media mix is better than just one thing.”

Assuming the Globe can weather the financial pressures on independent regional papers — and its digital transformation is as far along as any — STAT looks to be settled in for a long run.

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Rick Edmonds is media business analyst for the Poynter Institute where he has done research and writing for the last fifteen years. His commentary on…
Rick Edmonds

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