Breaking the fourth wall: Robinhood’s foray into publishing, and how financial publishers work to maintain independence

The news

Earlier this year, Robinhood announced that its expanding the company’s presence in publishing through the launch of a new media arm called Sherwood. The new media arm is set up as an independent LLC and will function as a subsidiary of the popular stock trading app. 

This move by Robinhood comes after the company acquired MarketSnacks in 2019, and launched it as its own daily newsletter called “Snacks”. The newsletter now has 40 million subscribers, which is reportedly 4 times the number of people who pay for the New York Times. Snacks will become a part of Sherwood, meaning that the firm will launch with a large audience. 

The new financial publisher’s focus is going to be a blend of news stories about markets, economics, business and technology. It also plans on launching specialized newsletters on companies like Tesla.

According to Sherwood's website, the new media brand will run on an advertising and sponsorship model, a recent statement also hints at a print magazine, in person conferences and podcasts. The firm claims that it will operate independently from Robinhood: 

“When it comes to our parent company, Sherwood will cover Robinhood when we think it’s appropriate. But we won’t cover or incorporate data collected or published by Robinhood, or surveys it conducts or sponsors, including research about investing and financial trends or its customers. We will cover news about Robinhood’s competitors, just as we do any other company.” 

But what does independence mean when a media brand utilizes sponsorship and advertisement revenues? Is this the best time to be entering the publishing business? And how does a media brand build its voice?

Let’s find out the answers to these questions from Tearsheet’s own Editor in Chief, Zack Miller, and Shareen Pathak, co-founder in chief of Toolkits, a company that provides resources and insights for media professionals. Strap in, it's about to get a bit meta!

Is this the best time for publishing?

Companies are reviewing their costs as they weather the economic downturn. This means that marketing budgets aren't faring too well in the current economic landscape. “It's an interesting time to be entering the publishing world,” said Miller. Interesting, because although times are tough for standalone publishers, a publisher like Sherwood which has Robinhood at its back, may be able to weather the storm in the market.  

On other hand, Pathak holds that publishing is “never an easy business”. But she also thinks  that developments of the last few months have added extra pressure on media brands. “The proliferation of AI-produced content is a future threat that publishers of all types are watching keenly,” she said. 

A common thread between both Miller and Pathak is the difficulty in producing content that can stand out. Standing above the noise is getting harder and harder, and while Sherwood is coming in with an expansive audience through Snacks, how will its voice continue to stand out from others in the field?

Building and holding onto your media brand’s voice

Perhaps the answer can be found in how existing media brands have built up their voices. For Miller, finding Tearsheet’s voice was quite easy. At the start, Tearsheet’s voice was an extension of his own – he had an interest in finding the top entrepreneurs in fintech and banking, and he let that curiosity flow through Tearsheet. 

Things have evolved since Tearsheet started 8 years ago. Miller points out that each addition to the writing team has added another layer to Tearsheet’s voice. These comments highlight how important both leadership and talent can be in shaping what a media brand sounds and reads like. 

In the case of Sherwood, the firm will be led by Joshua Topolsky, the former Chief Content Officer of The Outline, a media brand that specializes in periodical publications that hoped to build a “newage” version of the New York Times. He has also previously worked with Bloomberg, as their Chief Digital Content Officer and with The Verge, as their Editor-in-chief. Topolsky has added that although Snacks did not cover its Robinhood before, as part of Sherwood, the popular newsletter will cover its parent company, “whenever and where it makes sense”. 

A media brand is enriched by the talent it hires, but Sherwood’s novel position comes with novel challenges. The writers and editors Sherwood ends up hiring, and what they will choose to cover will inevitably shape what Sherwood is, as a media brand.  

A writer’s previous professional engagements can impact their tone, after all Topolsky’s leadership of Sherwood seems to be driven in part by his experience in communicating with and building brands for younger audiences. Miller adds that Sherwood’s voice may become impacted by where its writers have worked before.

On the subject of content and conflicts of interest, Sherwood claims in its editorial principles that if a writer or editor has “beneficial interests” in stocks covered in their publishing, the firm will disclose this interest. This extends to a joint account with a spouse or child. 

And as Sherwood builds its readership and its content, the company will also have to deal with some of the more contentious issues about its operations. “As an editorial voice Robinhood will have to answer questions like 'do we stand for day trading?'" Miller said. 

The frictions between independence and the ad/sponsorship model

There is an inherent and undeniable friction between maintaining independence as a media brand and generating money through putting sponsored content in front of your audiences. 

“People usually like to talk in absolutes, and one debate that’s dragged on in recent years is whether publishers should orient their operations around either advertising or subscription revenue as a core driver for their businesses. For media brands specifically, the answer is usually somewhere in the middle,” said Pathak. 

Moreover, Sherwood’s parent company might be able to “bankroll” many of its operations, Pathak adds. As such Sherwood serves as a separate revenue stream for Robinhood, one which the company supports and bolsters whenever needed.  The company also hired a head of sales, James Denis in March, who previously worked as Vice President, Global Partnerships and strategy at Vox Media. This move further cements the new publishing company's goals to drive its advertisement and sponsorship model.

But how do brands that don’t have one of the most popular stock trading apps behind them manage to maintain independence and integrity? For Tearsheet the answer lies in the leadership: Aaron Singer and Zack Miller, the co-ceos of the brand, tag team this responsibility. While Singer looks at maximizing revenues, Miller considers which sponsorships fit Tearsheet’s voice, not the other way around. 

“There's a tightrope that we need to walk,” Miller adds. One way to ensure that a sponsor’s messaging is in harmony with a media brand’s voice is to take on partners that the media brand already respects and knows in the space. 

This approach has its own tradeoffs. On the one hand, when sponsorships do occur, media brands can get access to important players and information in the financial industry a lot more fluidly. On the other hand, producing sponsored content can impact the amount of resources and time spent on organic content. Miller points out that there is a limit to how many times you can send a sponsored content email to your readers – overdo it and readers vote with their feet by leaving. 

While the tribulations of maintaining independence stay in place, both Pathak and Miller agree that for most media brands, the answer to how to grow revenue lies somewhere in the middle of the subscription and sponsorship model. Perhaps one guiding principle can be prioritizing building organic readership and subscribers. Organic readership also impacts how attractive a media brand is to a sponsor, hence, this guiding principle serves two purposes rather than just one. 

Parting thoughts

It is clear from Sherwood’s leadership as well as Robinhood’s user base that the new media brand will most likely focus on younger readers. As demographics of readers and consumers have shifted, a focus on Gen Z and Millennials is an emerging trend in publishing right now, a trend that firms like ours are also catering to.

What remains to be seen, however, is how the new media brand will find its footing in the current macro economic environment and crowded publishing space. And will its success spell an incoming erosion between the financial industry and publishing?