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.