5 things we learned about building a new media company
Last year was supposed to have ushered in a golden age for journalism. Old and new media alike got infusions from tech-rich entrepreneurs like eBay founder Pierre Omidyar and Amazon’s Jeff Bezos, not to mention venture capitalists. Undaunted by the difficulties of digital publishing, new startups were launched, fueled by the belief in new ways of telling the news and the power of the journalist-as-brand.
But starting a new media company isn’t without its challenges. Along the way, here are five things we learned:
Journalists can be hard to manage …
Exhibit A: First Look Media. The company created by Omidyar was supposed to be a well-funded source of fearless journalism, but the biggest headlines it made were about its own internal turmoil: First Look made some high-profile hires in Rolling Stone’s Matt Taibbi and Gawker alum John Cook, but they left after a few months, and First Look’s launch publication The Intercept published an unusual tell-all about conflict between the company’s rigid Silicon Valley management and the anti-authoritarian values of its journalists. Omidyar tapped the brakes, saying he would scale back First Look’s growth plans.
… but we need MBAs, too.
Journalists have been criticized for being poorly informed about how their business works, and the criticism isn’t entirely unwarranted. That didn’t stop a number of journalists from trying their hand at entrepreneurship this past year, though. And while some of their journalism training prepared them for some aspects of running a business, they weren’t always prepared for what it takes to get their companies off the ground.
As Jessica Lessin, founder of The Information, said, “One of the things I had to learn quickly was which decisions take a lot of time and which don’t.” Ryan Singel, founder of content-recommendation engine Contextly, had to learn sales and fundraising on the fly. While all startups can have their hiccups, it’s arguable that more business training at the helm might have accelerated their growth.
Consumer pay is hard.
It sounds simple: Come up with information people will pay for, and deliver it. That was the premise behind two startups, The Information and The Daily Dish. If only it were were that easy. (The New York Times, with all its research capabilities, might have cracked the code and the two paid apps it introduced this year, NYT Now and now-shuttered NYT Opinion, would have been unqualified successes.)
But as the scarcity of such sites shows, consumer revenue hasn’t upended the model for news, which still gets 69 percent of its revenue from advertising. The Information hasn’t released subscription numbers. In the case of The Daily Dish, a year after blogger Andrew Sullivan launched it as a subscription site, the once-outspoken critic of online advertising was embracing video ads as a second revenue stream.
We have some ’splaining to do.
Explainer sites were the big thing this past year. The year 2014 brought us Vox.com, Nate Silver’s 538 and The New York Times’ The Upshot and other verticals at existing media companies. The idea behind these data or “explainer” journalism startups was to present complex subjects and developing stories like Ebola and Bitcoin in more accessible, varied formats than those found in the traditional newspaper.
This trend is responding to the fact that while there’s more information than ever on the Internet, we don’t necessarily have the context we need to make sense of the news. The hope of explainer journalism, with its frequently conversational tone and evergreen content, is that it will help new and legacy publishers reach a larger — and younger — audience. (Even so, explainer sites need audience scale like any digital publisher, which is why we’ve seen explainers like this one on flatulence from Vox.)
We still need newspapers.
It’s tempting to think that all the new media startups means more employment for journalists and more serious news production. Yes and no. For its 11th annual State of the News Media report, Pew Research Center estimated that there are 5,000 full-timers across 500 digital-only news sites, including Vice, BuzzFeed and Business Insider.
But that’s a drop in the bucket compared to the U.S. newspaper industry, the bedrock of news reporting. More than 2,400 full-time journalism jobs have disappeared from 1,400 U.S. dailies from 2012 to 2013, leaving 38,000, and those jobs are increasingly at risk as newspapers face ongoing financial pressure with waning ad revenue and public ownership.
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