Regarding my scheme to earn money as a blogger, a reader says: "Your blog has gotten good press and good traffic numbers, and you certainly have my respect for the job you've done. And that's gotten you enough money to still qualify for food stamps. So, if I start a hyperlocal, informative website about, say, the Hyde Park neighborhood in Chicago, using all my journalistic skills and experience, it still won't support me as an adult human being, let alone if I have a family. Will such sites eventually make money? No doubt. Do they now? Very rarely. So what happens to the huge gap between when newspapers regress and purge thousands of journalists and when blogs like yours become successful businesses that can support their owners and/or staff?"Join the debate, in the original post.
[Image: an issue of TV Guide with the original $64,000 Question TV game show, Tim's TV Showcase]
This is EXACTLY the question I've asked out loud to many people over the past few months. No one seems to have an answer.
ReplyDelete"Will such sites eventually make money? No doubt." My 2 cents is that this is a false assumption.
ReplyDeleteThe vast majority of independently owned businesses fail within three years. If you look at media this is especially true. You won't find many successful, single property media outlets be they TV, radio or print. In the online world this is even more true. Most internet start-ups never turn a profit.
What makes the hyperlocal or niche online play even more difficult (as a business)is the commoditization of your revenue stream -- ad networks.You get crumbs.Just ask Jim. Bottom line is the independent publisher who cannot afford his own sales staff has little chance of generating enough revenue to make it worth your while.
For instance, one of my websites is a component to a weekly newspaper I own. I have about 6 million annual pageviews, 70% sell through rate and an average page yield of $10CPM. This is VERY good. Yet, it only ads up to about $42K a year. After paying sales commissions, it's down to about $35K. That's not enough to power a stand alone business.
The math simply does not work given the current CPM levels. And I don't expect that to change anytime soon. Ad networks and Google simply have too much inventory which keeps the rates to low to build a real business on. Unless Gannett can start selling dramatically more of its inventory (currently below 50%) at much higher page yields, it is toast. Again, just my 2 cents.
So you haven't found a financial model that will allow you to make a living on the Internet as a publisher?
ReplyDeleteWelcome to the read world.
42K a year? Sounds pretty good to me - more than what Gannett was ever paying me annually. My take on it is this - you can't just be a journalist - and you can't just be a sales person. You have to be both to make this kind of endeavor work. Maybe that's why websites won't ever replace print in Gannett as it's business model stands today. News and sales are in such silos - they rarely work well together if at all. Then take in to account that the overhead alone - the shear number of bodies that Gannett employs is exhorbitant - and will never be able to make payroll if they go virtual.
ReplyDeleteOne guy (or gal :))and a computer... and a little sponsorship advertising? That's a recipe for a success that will at least sustain the recession. :)
Don't let them discourage you, Jim. If I had a nickel for everytime someone thought I was crazy for starting my own website to make money - I'd be a rich woman by now - oh wait... I don't need to be rich - just pay the bills - and I am!!