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Yet another “What if you go online-only?” scenario

This question keeps getting asked in various ways: “What if you just stopped printing the newspaper and went online-only? How many people would you need, what would your costs be, and could you earn enough revenue to make a profit?”

It’s not necessarily the right question, because there’s still life left in print. An online-print hybrid, with one or two days a week of printed distribution tied to a strong digital publishing operation, is probably a much better solution than online-only.

In any case, Peter Kafka of All Things Digital is the latest to noodle the online-only version and has posted a spreadsheet supplied by Mark Josephson, CEO of Outside.in, which offers a news platform, Outside.in for Publishers, that can augment a local news site (such as that of a newspaper or TV station) with a stream of content links to local blogs and other sources.

In Josephson’s wildly optimistic model, the news operation gets 40 million page views per month, which is then augmented by 93 million page views from the Outside.in adjunct, and ultimately this sugars down to a tidy annual profit of $2.8 million with 20 employees who earn $70,000 apiece.

If it were that easy, it would be happening all over. The problem begins with the combined page views of 130 million per month, which is more than nearly all U.S. newspaper sites get, as Topix CEO Chris Tolles pointed out in response to the Kafka post. As well, it seems unrealistic for the Outside.in add-on to the local site to more than triple the combined monthly traffic.  Maybe for the typically underperforming broadcast site, that would be the case, but not with a newspaper partner. Tolles questions the assumed ad CPM, as well.

Josephson responded to Tolles by saying “but the model still works with fewer . [Pageview] reductions reduce the attendant expense and would require fewer people.” Well sure, but look, a typical 30,000-circulation daily paper is lucky to get a million pageviews a month, which, even if leveraged to 3 million with Outside.in, would scale the 20-person staffing model to exactly 0.5 people. Back to the drawing boards, I’d suggest.

                                   
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Ken Doctor    July 16, 2014
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