Jim

Pondering the economics of making a news startup work on the Web

In Biz, Freelance, innovation, newspaper, publish, publisher, Publishing, smartnews, startup, venture on April 18, 2009 at 7:18 pm

I ran a cross a comment on this thread that breaks down the dilemma that faces Internet startups.

It’s a great idea to have journalists curating the best tweets about a story or topic. That’s a solid content model. Now, if you want to make a living at it, you need to sort out and execute a business model.

You have two options:

1. Get massive traffic, 2MM+ pageviews/month while keeping costs low, low, low, such that you can use existing advertising networks to make a living. Their rates are insultingly low, but if you can break a million pageviews without having to pay for content or help, then you can make that work possibly.

2. Build it out into a brand with a defined, die-hard niche audience that specific types of businesses will pay a premium to reach. What about approaching the makers of some of the Twitter clients out there? They’re always looking for new users and your audience consists of super-active Twitter-users who are likely always one step ahead of the game. What if Twirl or Tweetdeck sponsored you guys for a month or two?

Very difficult for any individual journalist to drag in 2 million page views per month (I’m astonished at how few even this blog gets, even though I make almost no effort to market it. You’d think that random chance would drag in more useless, accidental traffic.) And there are only so many valuable niches around. I think of my friend Charles Apple who’s absolutely got the “visual journalist” market nailed down — but what is that worth to him or to Visual Editors in terms of advertising? I don’t see Adobe ponying up oodles of ad money. (Maybe as we all get outsourced and have to buy our own equipment and software, that’ll change.)

As publishers and executive editors have not exactly been beating down our doors, I’ve been thinking off and on about how we could grow Smartnews into it’s own direct-to-consumer Web experience. The result would probably be something like True/Slant. But probably more open, using that rating system to direct eyeballs and presumably ad revenue to journalists. I’m open to your suggestions.

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