June 24, 2009

Keep Cutting: Online Hard Going for Newspapers

by tolles at 2:07 PM

Peter Kafka of AllthingsD, got Mark Josephson, CEO of Outside.in to project what the "online newspaper for tomorrow" might look like.

Mark posited that with 40MM monthly pageviews, and $560k of revenue (half is which is from a network of blogs or some Outside.in like stuff, not part of the core site), a reasonably sized city paper could afford a staff of around 20 people.

Two problems.

Only a handful of newspapers have the 40MM pageviews. like less than 20.

newspaper_death_spiral.png

And, next, you are estimating a $7.00 eCPM sitewide, and a pretty healthy eCPm for your 3rd party network revenue. Now, I'm rooting for those guys at Outside.in to deliver on this kind of revenue, but we have used every single ad network on the web here at Topix, and let me tell you, getting $7.00 sitewide eCPM on news is really really tough.

So, what's the solutuion? Personally, after talking to Tim Redmond at the Bay Guardian and Billy Jensen at Village Voice Media, I think the alt weeklies have a pretty good balance of print and online and a sales effort that makes sense for a locality, and those publications are in fact right in line with the staffing that Mark is talking about, have a good shot at selling lcoal advertising and seem to be doing ok.

But.

There's no way that your typical midtier local newspaper is getting to 40MM monthly pageviews any time soon, and that means a staff of 20 is probably going to be pushing it for a local online only publication.