What happens when your local paper goes online only? It loses most of its staff, that's one outcome. I picked up the information from Fred Wilson's blog where a really good discussion around aggregating, curating, and publishing new media is under way. The P&L chart does make a fair argument for staff reductions. Yes, readers did point out that the $5-15 RPM is rather high.
The pitch to make such publication possible is from Outside.in, a three-year-old company that has just rolled out a new tool to (supposedly) make pulling extra content created by local bloggers, Twitterers and lots of people who don’t even think of themselves as content creators, like people who post real estate listings, easier for local publishers, which could be a newspaper site but doesn’t have to be.
And if there aren't any local bloggers and twitterers? The discussion at Fred Wilson's blog included so many examples, that I thought you might enjoy taking a stroll through them:
- Toronto City blog from Freshdaily
- Wikicity - over 22K U.S. towns
- Seattle PI and Seattle Post Globe
- Village Voice
- Milwaukee, WI - using Outside.in for Publishers
Given that many media companies are still milking the print cash cow to subsidize the online version, figuring out what's next for online profitability seems to be a tall order. But print is not dead, and probably will not be for a long time.
I was intrigued by a comment in the discussion made by Joshua Karp about how online is about exploration and print is for consumption. Reading the printed word is a physical, tactile experience. It is not the same as reading something on a 22 inch monitor, or on a 2 by 3 inch glass screen sitting in the palm of your hand. That's the same observation Tim McHale made when we had our conversation on new media.
What's interesting about Karp's project is that The Printed Blog was written up in the New York Times and in more than 200 major media publications around the world, on US and national radio, TV, on thousands of blogs - guess this counts as +1. In case you're wondering, they distribute in New York, Chicago, San Francisco, and LA.
Maybe The Huffington Post is planning a glossy magazine of its best content. I know for sure that media properties like Fortune would do well if they offered special editions of their archives as souvenirs, or posters of their board of directors' photographs - something I enjoy a lot (recently, they published a fun photo of Twitter's BOD's).
Karp shares The Printed Blog financial model in the comments to Wilson's post (republished with permission):
10 pages, 18 "small" ad spots
per page, $30.00 per ad spot: equals 180 "small" ad spots per edition
inventory and a potential $5,400.00 in revenue - each edition equals
1,000 copies in a single location. Publish 5 times per week, and total
potential weekly revenue is $27,000 per location. Assume you can only
sell 70% of inventory, and our weekly revenue per location is
We've sold a LOT of ads at that rate, and could fill each edition.
In terms of costs, each issue (10 pages) costs $1.00 to print; this equates to $5,000.00 per week.
Each issue requires two people to hand it out each day, at $100.00 per person; this equates to $1,000 per week.
We pay bloggers / photographers a rate equal to 20% of the ad revenue that appears on the same page as their content, with avg. 3 blog posts and 3 photographs, that's 6 pieces of content per page, 60 per issue, 300 per week (5 issues per week). Twenty percent of $18,900.00 (weekly revenue) is $3,780.00, divided between 300 pieces of content, that equals $12.60 each (ask a blogger how much money they earn for EACH posting, and it's less than $12.60 - and, with TPB, you would get this amount for EACH edition you appear in; if a blogger appears in 10 editions, they would earn $126.00 for that one post.)
We pay an ad sales person
(community relations person) to walk the community each day to learn
what is going on and to sell ads; a college student at $125 / day is
$625.00 per week.
Overhead costs are editorial and layout, but each editor and graphic designer can handle 5 editions per day. If an editor costs (burdened) $65,000 and a graphic designer costs (burdened) $55,000, their weekly cost per edition is $250.00 and $212.00, respectively.
Add up all of those costs and you get $10,867.00 per week. That leaves $8,033.00 PER WEEK per location for other overhead. Yearly location revenue is $982,800.00, yearly costs are $565,084.00, and $417,716.00 remains for executives, technology, and marketing - and this is per location, representing 1,000 copies.
In Chicago, where we are based, the Tribune's circulation is somewhere around 400,000 per day. If The Printed Blog could circulate 150,000 (which can be supported by ads - there are 150 neighborhoods where I can easily distribute 1,000 copies AND there are local / regional / national advertiser interests to earn $18,900.00 per week), could we make, pure profit, of $1,000.00 per week? I EASILY think we can - that equates to PROFIT of $150,000 per week, or $7,800,000.00 per year, in Chicago ALONE.
It might be expensive, but if you look at the only newspapers that are doing well, they are community newspapers, i.e. the model above.
If you think new media is just about being online, you're wrong. I think new media is about finding new ways to package content that meet customers' demands for it where they are and for what they do. RSS is pull online and there are tools that will help journalists pull paper stories in the medium, but there is still a case for offline pull.
In both cases, I'm wondering what the new role of public relations professionals and agencies is. In guest post here, Christine Needles wondered about that, too. If marketers are to be in the content creation business, and I know we are, then is public relations going to help out? Would PR professionals become community content curators?
What are your thoughts / ideas?
[image of Scrooge McDuck: The Expert by Carl Barks]