Good morning, and welcome to the Year of the Pig 🐷

• President Trump will deliver the State of the Union address tonight at 9 p.m. ET, 6 p.m. PT.

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Jim Coulter wants the niche

What's Next: TPG Capital, one of the largest private equity firms in the world, is looking to ramp up its investment in niche direct-to-consumer media brands whose fortunes aren't tethered to the whims of Facebook and Google, sources with knowledge of the firm's investment strategy tell me.

• TPG co-founder Jim Coulter and TPG Growth chief Bill McGlashan believe the digital media industry is moving beyond the scaled advertising model (a la BuzzFeed and Huffington Post) and toward niche offerings where revenue can be built on a small but loyal group of consumers, the sources say.

• TPG already has a stake in The Athletic, the subscription-based sports news website, but that is just the penny ante. Coulter and McGlashan believe the DTC space is going to fill up fast, and they're looking to build out the portfolio.

The Next Bet: Graydon Carter.

• TPG is backing Air Mail, a weekly newsletter for the jet set founded by former Vanity Fair editor Graydon Carter and veteran New York Times television critic Alessandra Stanley.

• Air Mail promises "smart, stylish writing" for "worldly cosmopolitans" and hopes to attract luxury advertisers as sponsors.

The Big Picture: "The Future is Niche," Stratechery's Ben Thompson wrote last week: "Trying to do the same thing as everyone else ... is a recipe for failure for anyone but the best":

• "Broad-based general interest publications without an established brand and subscription model like the New York Times are probably not as viable as once hoped."

• "The ability to reach the entire world means that there are massively more niches that can be served, simply because the addressable market is so much larger."

• "Narrowly focused publications make more sense than ever."

• "Build content people like, and pay for it as you go."

Digital media success stories, so far: Axios, The Ringer, Stratechery. These are all relatively small-scale companies showing viable business models while bigger competitors like BuzzFeed, Huffington Post, Vice and Mic have been forced to cut back.

• On that note ... thanks for subscribing.

Bonus: A Digital Media Must Read, ICYMI, is NYT's Ed Lee on what happened to the industry, and where it goes from here:

• If you "look past the gloom... a complicated narrative emerges that does not lend itself to a one-size-fits-all interpretation of What Went Wrong or a handy forecast of journalism’s future."

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Bob Dickey rejects Alden offer

What's Next: Gannett chief Bob Dickey has rejected a $12-a-share takeover offer from Alden Global Capital's Digital First Media — but negotiations are likely to continue.

• The Digital First offer values Gannett at $1.4 billion.

• The Gannett Board said the "unsolicited proposal undervalues Gannett and is not in the best interests of Gannett and its shareholders."

• The Gannett Board also said it does not believe the proposal is "credible.”

The Big Picture, via Nieman's Ken Doctor last month:

• Alden is "the most reviled newspaper owner in the business," and Digital First is "unusually naked in its strategy of extraction, investing as little as possible in the business as it harvests some of the highest profits in the industry."

📺 Rally the Market 📺

Today in Times Square: Oprah will interview Beto O'Rourke, Melinda Gates, Bradley Cooper, Michael B. Jordan and Lisa Borders for her SuperSoul Conversations series, which will be broadcast on OWN.

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Larry Page soars amid setbacks

Larry Page's Alphabet reported a 22% revenue jump yesterday, bringing total revenue to $39.3 billion for the quarter and profits to $8.95 billion — yet another reminder that Big Tech continues to grow, even as it gets pummeled by lawmakers and the media.

The Big Picture, via NYT's Daisuke Wakabayashi:

• "Alphabet’s financial consistency is easily explained. Google owns the internet’s ultimate beachfront property, the starting point for a lot of internet activity, whether it’s someone looking for entertainment on YouTube or hunting for product information on the Google search engine."

• And so the company manages "to produce strong financial results with the numbing consistency of the New England Patriots in the Super Bowl."

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Zuckerberg on offense, con't

Leading yesterday's Market:

• "Facebook is looking to wrest control of its fate by taking greater ownership of its data-driven business model .... The apology tour is over. Zuckerberg is on offense."

Mark Zuckerberg, five hours later:

• "As networks of people replace traditional hierarchies and reshape many institutions in our society -- from government to business to media to communities and more -- there is a tendency of some people to lament this change, to overly emphasize the negative, and in some cases to go so far as saying the shift to empowering people in the ways the internet and these networks do is mostly harmful to society and democracy."

• "To the contrary, while any rapid social change creates uncertainty, I believe what we're seeing is people having more power, and a long term trend reshaping society to be more open and accountable over time."

Bonus, via The Atlantic: "A dozen students and faculty members reflect on seeing and being the first users of the world’s largest social network."

Market Links

• Howard Schultz gets his first taste of David Brock (CNBC)

• Jeff Bezos yanks a $20-billion Super Bowl ad (Page Six)

• Carlos Brito goes to war with competitors' corn syrup (NYT)

• Paul Pflug and Co. launch a reputation management firm (THR)

• Ted Sarandos seals the deal with Gwyneth Paltrow (Variety)

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Beyond Landgraf vs. Netflix

FX chief John Landgraf criticized Netflix on Monday for inflating the ratings for their shows, but what his criticism really highlights is how woefully inadequate ratings measurement tools are across all platforms, from linear television to on-demand streaming services.

• Speaking to the Television Critics Association, Landgraf said Netflix's claim that 40 million households were expected to watch "You" and "Sex Education" were not "remotely accurate."

• Landgraf said Netflix measured by "video starts" — a very Silicon Valley metric — whereas traditional television broadcasters rated by average audience across the show.

• Landgraf estimated the actual audience for "You" was 8 million (one fifth of Netflix's estimate), and the actual audience for "Sex Education" was just 3.1 million (less than a twelfth).

The truth is that traditional Nielsen ratings don't provide an adequate picture of how many people watch a show, either. They're based on samples, and don't account for multiple viewers watching one television set (nor for television sets that people aren't actually watching.)

• Netflix could provide a complete picture of its ratings if it wanted to — it has access to that data — but it doesn't and it won't.

The Big Picture, via one Hollywood insider:

• "Ratings as we think of them are broken for now, and we have a few years in the wilderness ahead of us until a new universal standard is agreed upon."

If you do trust Nielsen, the ratings for this year's Super Bowl were the lowest in a decade. It's enough to make a brand wonder why it spent $5.25 million for a 30-second spot.

See you tomorrow.