A $2 Million Newsroom – from Scratch

From the New Business Models for News Summit going on at the City University of New York, interesting post on how you’d build a newsroom from scratch these days for a largeish city like Dallas or Philadelphia. The tab: a little over $2 million a year for 35 FTEs, paid for with about $4 million in revenue (800 million annual pageviews at $5 revenue per thousand pages). (My former colleague Neil Budde, it is said, did the math.)

Since I spend most of my time working with much more vertical, industry-focused news sites, let’s do a comparable calculation for one of those. Let’s pretend you could get 20 million pageviews a year on a site like that, not 800 million. That’s $100,000 in revenue per year at a $5 RPM. Sure, on a vertical site maybe you could do a higher RPM — so let’s call it $300,000 in revenue. Can you do a decent job covering an entire industry with a $150,000 news operation?

I still can’t imagine how most (maybe all) news sites will survive without some kind of a model that enables them to get revenue from readers. A $199 annual News Pass that lets you read any news site you want, as much as you want? It’s sounding like even with lower royalties on music, internet radio stations are going to need some kind of a Radio Pass like that. I wonder who will come forward and make this model work – probably not Google, even though they are (perhaps) the only people right now who could get people to the table to help it happen.

Newspapers’ Future May Be Elite Only

Thought-provoking piece from Philip Meyer on one future strategy for newspapers: Give up chasing the mass market, give up being daily even, and focus on the investigative and analytical journalism that an elite local audience will always want. High-end, targeted advertisers, subscriptions, and local or national nonprofit foundations would provide the revenue. It’s a little like redefining a newspaper to be as targeted and “different” as public radio and television news have tried to be compared with their commercial counterparts. Or, perhaps, as a local edition of what ProPublica is starting to experiment with nationally.

It’s not the only business model for a Newspaper of the Future – free dailies and weeklies for “everyone” seem like they’ll also have a place. But would those more stripped-down publications ever have the newsroom resources to do the kind of real local reporting that will always need to be done by someone? I found myself wondering a few weeks ago when reading the New York Times’s terrific expose of disability retirement abuse on the Long Island Railroad: Who’ll be able to do this kind of work in a world of shrinking local newsrooms? Maybe Professor Meyer is onto something. It would be interesting to see a real business plan for what he’s suggesting, to see if the numbers have any hope of working out.

Tougher Passwords = Lower Revenue?

Just finished trying to order a simple $30 online print job at Fed Ex Office (the happy life of a consultant!). I abandoned the whole process in the middle of trying to create an account to make this purchase. Why? I got this message after my third attempt to choose a password acceptable to the system:

I’m all for security, but how does it make my life better to force me to choose a password I can’t possibly remember? And how is it good usability to tell a user the password rules (in an error message) only after he or she attempts to choose one?

Some online program manager at Fed Ex (assuming they have one) simply wasn’t doing his or her job: Wondering if a checkout process like this would help customers spend more money.

Fast Company’s “Sweeping Initiative” Gets Swept

The recent layoffs at Mansueto Digital aren’t a surprise if you have tried what PaidContent.org calls their “sweeping social media initiative.” I am afraid I panned their nascent social network at FastCompany.com in my very first post back in July. Three months after registering, I still haven’t received a single e-mail from this network inviting me to come back. I guess the likelihood I’ll get one is even lower now. From the outside, at least, this looks like a future case study on how not to start a social network.

Behind the Newspaper Online Ad Drop

Good roundup in the New York Times on the not exactly shocking falloff in newspaper Web ad revenue. The story points out (accurately) that prices on banner ads have been undermined by ad networks (where banners often net publishers $1 per thousand or even less). Some newspapers’ response is to pull out of the networks, reduce inventory, and try to preserve what’s left of their higher CPMs.

This is part of the way to respond, but I wonder if there aren’t two other elements newspaper sites (or any sites) need to deal with.

(1) In my experience some publishers just haven’t lowered their banner CPM expectations to get in line with reality. The fact is, there’s a huge glut of banner inventory on the Web. You may not want the $1 CPMs you’ll get from a network, but that doesn’t change the fact that your rate card may be simply look too high compared to the ROI potential buyers are expecting.

(2) If you want to sell your banner inventory at higher prices, ultimately you have to tell either an environment story (convince people you have an editorial package that by its quality or coolness or audience engagement enhances the value of the ads it carries) or a targeting story (a highly vertical market segment that no network can get you). I wonder how many of the newspapers whose revenues are falling could really make either of these two cases effectively — either online or in print?

ESPN’s Hard-to-Read Brand Management

This is a little off topic, but I can’t stop myself.

Usually I am lost in admiration for the brilliant way ESPN has extended its brand into the cross-media juggernaut that it is. But lately, in two local Rite-Aids, I’ve seen large displays devoted to ESPN-branded … reading glasses?

ESPN Readers

I mean, far be it from me to question anyone’s quest for licensing income in these difficult times. But does putting one of the world’s hottest global sports brands on drugstore reading glasses make any sense?