Being a journalist in today’s media landscape can be a daunting proposition. Traditional media is seeing newsrooms scaled back, circulations continue to spiral and advertising revenue – once part of the ‘rivers of gold’ for the industry – is being spread thinly across varied print and digital platforms.
Last month The New York Times Company, which bought The Boston Globe 20 years ago for $US1.1 billion, sold the paper to Boston Red Sox owner and hedge fund manager John Henry for a bargain basement price of $US70 million. That amounted to a 93 per cent loss! The Times was so happy to sell that they even agreed to retain all the Globe’s pension liabilities, estimated at about $US100 million – more than the actual sale price.
Then the Graham family decided they were bailing out of the newspaper business after 80 years and sold The Washington Post to Amazon.com founder Jeff Bezos for $US250 million.
But there was something of a bright spark this week when Robert Allbritton, publisher of Washington news publication Politico, said he had acquired the three-year-old news site Capital New York and that he intended to turn it into the Empire State’s own Politico.
Politico started in January 2007 when two Washington Post journalists, Jim VandeHei and John Harris, decided to decamp and set up their own shop. Politico comprises of a free website, a free newspaper distributed mostly on Capitol Hill and the $US5000 a year PoliticoPro which gives users access to premium content.
While financials are not available for the privately held company it began to turn a profit within two years of launching.
Professor Bill Grueskin, dean of academic affairs at Colombia University, said where Politico has been successful is in targeting a niche market, in this case political types in Washington DC, and providing crucial information they can’t afford to miss. By providing this type of content they can give advertisers access to the eyes of America’s decision-makers.
“To a certain extent what they are doing has been a lucrative model for media for some time – narrowly focused industry publications that people in that industry have to read. For example if someone’s business relies on what the copper price is then they are going to pay to find out that information.”
“Then you have their advertising model. A health care company might be willing to pay for an ad if they want the attention of politicians considering and a niche publication like Politico’s newspaper gives them a place to do that,” Professor Grueskin said. “Can you create that niche publication in New York? I don’t know, I think it is going to be much harder.”
Politico publisher Allbritton is pushing ahead regardless. Six weeks ago he sold his family’s seven television stations for nearly $US1 billion so he could provide Capital New York with the firepower it needs to become New York’s Politico.
The site will bring on two dozen new journalists and editors and launch a PoliticoPro-style premium content service for about $US1000 a year. That is a hefty ask when you can get The New York Times for $US195 a year.
“The publication will focus laser-like on New York and its power centres, including the media, city and state politics, culture and business. It will target a sophisticated insider audience of New York's most powerful,” Allbritton said in an email to Politico staff. “To succeed, these publications must exist in areas where reader interest is very strong and the potential to sell targeted ads and subscriptions is very high.”
While it won’t have quite the same resources at hand, Capital New York will be trying to steal readers from The New York Times, which has itself has been implementing a strategy to find new revenue streams and retain readers. Its sale of The Boston Globe is part of that plan to narrow its focus on its main horse in the race, The Times.
It is the reason why it rebranded its Paris-based newspaper, the International Herald Tribune as The New York Times International.
The Times is backing the idea that a strong brand that readers can rely on to provide them with quality journalism will thrive no matter how the landscape changes.
The Times began charging readers for access to information it calls 'Need To Know' in 2011 and has amassed about 700,000 digital subscribers. Other newspapers around the world have followed suit over the past two years, providing the industry with a much-needed revenue stream.
As the digital world of journalism takes shape Columbia’s Professor Grueskin says there will be many opportunities for start-ups to take on traditional media and establish a name for themselves.
“I think if you find the right segment of news and do it well then it doesn’t matter if there are a lot of papers covering an area. You could have said that about the amount of coverage there was on US politics and then came Politico.”
The same could be said for BuzzFeed, which was founded in 2006, and now has 25 million monthly visitors, most of them coming through social media links from Facebook, Twitter and Tumblr. While many of those readers are wanting to see lists like ‘19 People Having A Worse Day Then You’, BuzzFeed has also set its sights on breaking news. Last year it hired Politico’s Ben Smith to be its editor-in-chief and heavily invested in its politics and business coverage.
"Business news is about scoops," said BuzzFeed's business editor Peter Lauria. "That's how you get readers. That's how you get noticed. That's how you get mentioned."
Professor Grueskin says for traditional media companies to survive in the new digital world then the focus needs to be on more ways to generate revenue than more advertising.
“I think what the big media companies will have to do is think about ways to create different revenue streams other than advertising. Online ads are not the panacea. They will have to think outside the box on this one.”
Mathew Murphy is a Walkley Award winning journalist based in New York.