The Changing News Business Model
Interesting move by the Seattle Post-Intelligencer in abandoning the print edition and switching to an online-only publication. The news business has a fixed overhead, there are a number of full-time reporters. So even though the marginal cost in online distribution is zero to extremely low, there’s a very high fixed cost in creating new content. Therefore, what’s interesting in P-I’s announcement is not just the change in the medium of publishing and distribution, but also the structural changes to the news desk and strategic changes in news coverage.
The P-I’s new model hinges on slashing its work force, scaling back its news coverage. The P-I will revamp the familiar model of a big-city daily as a catch-all of local and national news and features. Instead, it will cover local events and publish blogs and columns from staff, readers and prominent local citizens.
Since the online news business model is predominantly ad supported, driving traffic to the site is primary. Broadly speaking, there is 2 kinds of traffic to a news site online.
- Front-door traffic – readers coming directly to your site. The front-door traffic is typically high for a site with loyal readers that value the content and the brand.
- Side-door traffic – readers being referred to your site. They could be referred by friends (email, IM), your network (Facebook, Twitter), news portals and aggregators, blogs linking to your story, RSS readers and web search. Depending on the news site, the sidedoor traffic could be anywhere from 30% to 70%.
There is so much content available on the web, it’s impossible for one news source to be the catch-all for every news topic. The P-I is not a national publication, so it is hard for it to be the authority on national news.
Thanks to portals, aggregators and social networks, every story on the web is then just a click away. So if a majority of your readers come through the sidedoor, then it is critical that your stories be “link-worthy”. If it doesn’t get much link-love, readers won’t be able to easily find the story. But even if you’re the news site of authority on a certain topic, its hard to have every story be the ‘best of ‘ and get others to link to it.
The P-I will resemble a local Huffington Post more than a traditional newspaper, with a news staff of about 20 people rather than the 165 it had, and a site with mostly commentary, advice and links to other news sites, along with some original reporting.
This is the new catch-all model. Identifying a niche and focusing resources on it, and rather than create every bit of content from scratch link to other good stories out there. Become the aggregator and curator of good content in addition to producing original content, and increase your organic readership and front-door traffic.
The Techmeme leader board is a snapshot of various tech news sources competing for link backs on the Techmeme front page. The leader board is a mix of big publications with hundreds of reporters, and some popular tech blogs with only a handful of writers. When it comes to competing for side-door traffic, it’s a level playing field.The most interesting and link-worthy stories make it to the top.
References: WSJ.com and NYTimes.com
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