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Posts Tagged ‘politico’

Like everyone else I’ve watched the print media world fall apart over the last few years. The poster child for that industry is the New York Times, of course, and their many missteps in recent memory have been well chronicled. In early 2008 Marc Andreessen started a New York Times Deathwatch, and the company’s financial performance has degraded since then.

I keep wondering what would happen if the top 10% of the writers at the NYTimes just…walked out. I know it’s crazy, but let’s just explore this a bit for the heck of it.

Today the company is worth just a little over $1 billion. As recently as five years ago it was worth nearly 5x that much. You have to go back to the early 1980s to see a lower stock price.

I certainly don’t think the NYTimes is going to be shutting down any time soon. The company still pulls in nearly $3 billion a year in revenue, down just 10% or so from 2005. But massive overhead, and more than 9,300 employees, make profitability an increasingly difficult goal for The Gray Lady. Her age is showing.

Journalism Isn’t Dead. Just The Old Business Part Of It.

A couple of weeks ago I met the Politico guys just before they taped their Charlie Rose segment. I watched them live from the green room at the show, and read Michael Wolff’s excellent Vanity Fair article on the young company. Their news room is 100 strong and they have more people in the White House Bureau than any other brand. They have roughly the same traffic as we do - 7 million monthly visitors - but they’ve been around just half the time. How did they do it? The site was founded by well known political journalists who bailed to start their own company. They took their personal brands and credentials with them, and the readers followed. Today they are profitable - largely because they launched a three-day-a-week print version of the site. Amazing. Print isn’t dead (yet). Just the overhead is.

And earlier today I got a glimpse at what AOL is up to - they are hiring all the journalists being fired and laid off by the newspapers and magazines. And they now have a news room 1,500 journalists and editors strong. Amazingly, failing old media is throwing away their most valuable assets. And AOL is eagerly picking those assets up for a song. Before anyone knows it, AOL may be the most powerful news outlet in the world.

Journalists still matter. A lot. Especially the good ones.

What if…

So that got me thinking about the NYTimes. $3 billion in revenue. 16 million monthly unique visitors and 124 million page views (Comscore worldwide, May 2009). 9,000+ employees. 1,200 news staff, and just 400 or so writers, critics, correspondents and columnists. I’m still waiting to hear how many editors the paper has on top of those 400, but it’s probably a total full time news staff of no more than 450 people.

I don’t really read the NYTImes beyond the technology section. But I’m guessing that the top performers in the news room, say the best 5 of the writers and editors, produce 50% or more of the real value of the newspaper. The hungriest reporters. The best writers. The most competitive and aggressive editors.

What if that group, the most valuable assets that the NYTimes controls, simply walked out of the building and started their own company? What would that look like?

The New New York Times

The New New York TImes, or NNYT, would have a writing staff of say 50 people. These are among the best journalists in the world, and lets say they wanted to pay themselves $200,000/year, a top salary for a reporter of that stature. That’s just $10 million a year in payroll expenses. Call it $12 million with benefits. Plus, they all have stock options in the new comapny

If TechCrunch is any indication, the amount of support staff (developers, office staff, sales people, admin) needed to run the company is at most 20%, or another ten people, particularly if they outsource a lot of that. Put everyone in the cheapest office possible, and you’re looking at additional payroll, benefits and office expenses of another $3-4 million per year.

Now lets just add another 50% on top of that for other expenses and a safety net, and round it up to $25 million per year in total expenses.

That’s $25 million/year to have a well paid staff of the best journalists on the planet. How long before they outstrip those 16 million monthly visitors and 124 million page views? 5 years? Less?

How many private equity funds would kill to put $100 million behind the NNYT to make sure the company had plenty of money until it reached profitability?

My guess is plenty. And Marc Andreeseen, who has already backed two blogs, may be the first in line to invest. And I know a couple of hedge funds that would be right there, too. I know this because they’ve pitched me on a vision not much different than this one.

Of course, none of this is going to happen. Those 50 top journalists aren’t going to be able to self select and organize themselves even if they had the inclination to do something like this. But the interesting thing is that I think something like this would work, really work, if anyone tried it. And the guys at Politico and AOL seem to be doing just that.

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AOL’s new political news and blog site, PoliticsDaily.com has surpassed rival Politico.com in unique visits in May, after being launched only a month and a half ago. According to May’s comScore results, PoliticsDaily.com received 2.4 million unique visitors compared to 1.1 million unique visitors on Politico.com in May. PoliticsDaily, a “news magazine” site which primarily focuses on in-depth political commentary as opposed to breaking news, provides only original content, from long-form analysis to blog posts on issues in the U.S. political landscape. You can read our original review of PoliticsDaily here.

This is a big deal for AOL and representative of the company’s ambitions to become a dominant player in the online content space. PoliticsDaily is the brainchild of Martin Moe, senior vice president at AOL and is built under Bill Wilson’s new MediaGlow division, which is building new content brands distinct from AOL itself. MediaGlow, which recently launched topic directory Love.com, runs AOL News, Engadget and TMZ.com, among other properties.

AOL may be on to something. MediaGlow reports that sites as a whole, rose 5% year over year, with unique visitors climbing hitting 76.3 million, according to May’s comScore data. AOL’s Technology Network – which includes Engadget, , Switched, DownloadSquad, and others, saw the most growth out of all the MediaGlow networks, seeing 35 percent growth in year over year.

As TechCrunch Editor Michael Arrington wrote earlier this month, the MediaGlow team is looking to pick up the remnants of the dying print magazine business and digitize this content. With the print business in shambles, a lot of high quality talent is suddenly willing to take a job in online, even at a much lower salary. And AOL has some cash from the dialup business.

High quality talent may be what is helping PoliticsDaily stay competitive in a crowded field. Wilson credits editor and former New York Times Washington Correspondent, Melinda Henneberger’s leadership and “dream team” as the primary reason for the site’s rapid growth. PoliticsDaily launched with a venerable list of experienced political reporters from both new and old media, including Walter Shapiro, former columnist for USA Today and former Washington bureau chief for Salon; Jill Lawrence, former national political correspondent for USA Today and columnist for the Associated Press; Carl Cannon, former Washington bureau chief for Reader’s Digest and White House correspondent for the National Journal and the Baltimore Sun; and others.

Of course there are still other political news-driven sites that are getting more unique visits than PoliticsDaily— The Huffington Post saw 5.3 million unique visits in May, over twice the amount of traffic than PoliticsDaily. But HuffPo’s a content aggregator and PoliticsDaily is focused more on long-form original content. And it seems that PoliticsDaily is still growing and may be a model for where magazines should head in the future.

In the grand scheme of things, AOL’s strategy towards monetizing niche content online seems to be working out. And since they’ve already got the publishing platform with MediaGlow, new brands can be inserted or built at little marginal operating cost. If the brand tanks, which is likely to happen at some point, then AOL isn’t losing too much. It will be interesting to see what digital content brands AOL unveil next. Wilson says that MediaGlow will be launching several sites in the near future, but declined to give specifics. Perhaps they’ll reinvent some of the dying magazine brands at former parent company Time Inc.?

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Adify, a company that powers vertical ad networks, has released its API through a newly formed partner program to allow customers to extend online advertising technologies to the 12,000 publishers who use Adify’s vertical ad networks. Adify’s Network Builder is a technology platform upon which customers can build and commercialize vertical ad networks.

Adify’s Amplified Partner program brings together advertising technology companies Aggregate Knowledge, Ooyala, Rovion and Wave2 Media Solutions and networks who use Adify’s Network Builder, such as SixApartMedia’s VIP Ad Network and Resonate Networks. The release of Adify’s API allows ad technology companies to deliver video, display, and rich media advertising options tailored to each of Adify’s 180 vertical ad networks, which also include networks for the Politico, NBC Universal, The Washington Post, and Martha Stewart Living.

Adify, which was bought by Cox Enterprises in April of 2008 for $300 million, hopes to create a virtual marketplace for Network Builder customers integrate ad products and technology, from Ooyala’s video technology for ads to Rovion’s rich media ads. Adify also recently launched a horizontal business, Adify Media, to let advertisers buy across the networks built on its platform.

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AOL is adding a twist to old-fashioned political journalism with the launch of its new political news and blog site, PoliticsDaily.com. The site, which will primarily focus on in-depth political commentary as opposed to breaking news, will only provide original content, from long-form analysis to blog posts on issues in the U.S. political landscape. Led by former New York Times Washington Correspondent, Melinda Henneberger, PoliticsDaily wants to tie the old media’s in-depth political analysis with a sustainable digital medium

PoliticsDaily is the brainchild of Martin Moe, senior vice president at AOL and is built under Bill Wilson’s new MediaGlow division, which is building new content brands distinct from AOL itself. MediaGlow, which recently launched topic directory Love.com, runs AOL News, Engadget and TMZ.com, among other properties. PoliticsDaily is part of the AOL News network, which received more than 27 million unique visitors in March, according to comScore stats. New York Times Digital by comparison had close to 46 million unique visitors in March.

PoliticsDaily has enlisted a “dream team” of experienced political journalists from both new and old media, including Walter Shapiro, former columnist for USA Today and former Washington bureau chief for Salon; Jill Lawrence, former national political correspondent for USA Today and columnist for the Associated Press; Carl Cannon, former Washington bureau chief for Reader’s Digest and White House correspondent for the National Journal and the Baltimore Sun; Lynn Sweet, blogger and Washington Bureau Chief of the Chicago Sun-Times; and Patricia Murphy, founder of Citizen Jane Politics, a non-partisan website for women.

The site will include blogs such as “Woman Up,” a blog focused on political issues from a woman’s perspective; “The Daily FLOTUS,” a blog which focuses on First Lady Michelle Obama; and “The Cram,” a student-focused blog on political news.

Consumers are more frequently looking online news for political news, as we saw in the past presidential elections and during the current downturn in the economy. PoliticsDaily hopes to be a mainstream source of analysis and news and shuns the idea of being a news aggregator. While the all-original content includes both long-form articles and blog posts, the site will not be primarily focused on breaking political news—perhaps leaving the real-time, short-form news to other political news competitors like The Politico,The New York Times, The Huffington Post and the A.P.

The competition in the political news sphere is tough, especially online. PoliticsDaily will have to build a credible brand with its original content, going up against media organizations that have long been offering in-depth analysis, like the New York Times, The Washington Post, The Nation, The Atlantic and The Huffington Post. PoliticsDaily will also face some competition from The Politico, which incorporates blogs, breaking news, interactive multimedia features and in-depth reporting into one site. And while the New York Times and Washington Post are hemorrhaging money from their print publications, their in-depth political coverage and analysis on their websites is strong, deploying a wide array of multimedia, blogs and long form commentary.

News broadcasters sites also provide popular political coverage—CNN.com. MSNBC.com, and FoxNews were among the top five trafficked news sites following the election in November. Moe maintains that PoliticsDaily’s long-form magazine content will differentiate the site from The Politico and other real-time focused news sites.

Moe pledges that the differentiation between PoliticsDaily and the Huffington Post will be even more clear. Moe says that while the Huffington Post is largely a content aggregator, has a leftward bent, and doesn’t pay many of its bloggers, PoliticsDaily will be 100% original content from “experienced” paid writers, and will be “poly-partisan” with perspectives from the liberals, centrists and conservatives. Of course, with the financial backing of AOL, PoliticsDaily has the advantage of being able to pay all those editors and reporters. But if PoliticsDaily is supposed to be an online new magazine, why isn’t AOL’s sister subsidiary Time Inc. running it?

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