Nice article on TechCrunch today, well worth reading. Its of the "what happens if you were to design a newspaper from scratch today" sort:
The New New York Times, or NNYT, would have a writing staff of say 50 people. These are among the best journalists in the world, and let’s say they wanted to pay themselves $200,000/year, a top salary for a reporter of that stature. That’s just $10 million a year in payroll expenses. Call it $12 million with benefits. Plus, they all have stock options in the new company.
If TechCrunch is any indication, the amount of support staff (developers, office staff, sales people, admin) needed to run the company is at most 20%, or another ten people, particularly if they outsource a lot of that. Put everyone in the cheapest office possible, and you’re looking at additional payroll, benefits and office expenses of another $3-4 million per year.
Now lets just add another 50% on top of that for other expenses and a safety net, and round it up to $25 million per year in total expenses.
That’s $25 million/year to have a well paid staff of the best journalists on the planet. How long before they outstrip those 16 million monthly visitors and 124 million page views? 5 years? Less?
How many private equity funds would kill to put $100 million behind the NNYT to make sure the company had plenty of money until it reached profitability?
The problem you have is that the people who will build this sort of thing are not the existing media behemoths (who will
resist till the end), and would probably find it hard to get that initial $10m to get going as they typically have no brand, readers or industry kudos. Which, of course, is why they all start on even lower cost bases, like Gawker, the Huffington Post and even TechCrunch. Take
this note on Huffington form CEO Eric Hippeeau, for example:
1) Reporting has a different connotation at Huffington Post. “We expose our community to the best of what’s going on. Our content is what attracts the 20 million unique visitors a month. But what keeps our community coming back is engagement. We get 1.5 million comments per month. People jump onto stories and participate in the debate.”
2) There are 40 people in editorial at the Huffington Post; some of them are reporters, the rest are editors. “We have a unique ability to keep a story going when even mainstream media is silenced. Consider Iran, where after the election, the mainstream media reporters were kicked out of the country. But our citizen contributors communicated with us via Twitter and Facebook and cell phones, allowing Huffington Post to keep the story alive for eight days.” Reporters are also responsive to the “vox populi” by amending story leads or headlines based on feedback from the community.
3) Brands have a big role to play in the future of the site. “Marketing executives need to stop thinking about product campaigns. The question is what is your brand presence? Consumers are considering your brand at all possible times. And corporate reputation has a major influence on brands.”
4) HuffPost is considering some form of social network that allows continuous connection among your public and private conversations. The idea is a network that can be both personal and outward facing. “We see our community as being in the middle of the site, with content on the outside.”
5) Bloggers supply much of the content for the site. “We publish over 200 posts per day. Our community wants to hear from those who are in charge, from government leaders to CEOs. The style should be stream of consciousness with a point of view, not like traditional journalism.”
6) The business model depends on advertising. “I do not see us ever charging for content. We are a particularly efficient ad buy in the influencer category.”
Also, its not clear that quality trumps quantity - AOL's purported 1,500 part time writers may well do a "
monkey with typewriter" thing at lower cost than 50 grizzled hacks at $200,000 each.
But as a piece of blank sheet thinking, we salute it!
