A number of high profile newspapers have recently shut down their printing presses and transitioned to online only. The Christian Science Monitor will now be online, with a weekly print magazine. The Rocky Mountain News shut down completely last moth
, but there is a new initiative by ex-Rocky journalists
to start an online-only offshoot. The Seattle P-I shut down their print version on Tuesday, and will be online-only going forward. I've said before that the transition to online-only is extremely significant - it will give these newspaper organizations a chance to continue doing what they do best: high quality journalism. By changing the platform and distribution mechanism, they can take advantage of cost efficiencies and run a leaner, cheaper and more efficient operation. Most importantly, it gives them the chance to re-invent themselves and their business model. That is why I think these newspapers should now be run like startups. Unfortunately, I'm not really seeing this lean mentality manifesting itself in the new online-only operations. For one, the new Rocky offshoot (INDenverTimes.com
) will only launch if they can pre-register 50,000 paid users by April 23rd, each paying between 5-7 USD a month. Think about that for a second: they want guaranteed subscription revenues of $250-300K/month just to begin their 'startup.'
I counted approximately 30 staff listed on the site, so just the subscription revenue is enough to pay 120K/year per employee. On top of this, there will be advertisement revenue as well, which can be used to cover operational costs (servers, bandwidth, office space etc). So just in order to get going, they want to guarantee enough revenue to run their entire business. Color me dumbfounded. This is the exact opposite of a startup or entrepreneurial mentality. What happened to bootstrapping? The Christian Science Monitor had around 95 staff for their print newspaper. Surely the online newspaper will be a small, lean and very agile operation? Think again. According to the Monitor's editor John Yemma
, "a modest reduction" in the Monitor's 95-person editorial staff is likely, once the transition to the new product line-up is completed." The Seattle P-I will be run with a reduced staff of around 40 (down from 195). That's exactly the menatility we need! Michelle Nicolosi, who ran the paper’s old Web site and will oversee the new one, says
“the site won’t have specific reporters, editors or producers—all staff are expected to write, edit, take photos, shoot video and produce multimedia.” This is closer to my vision of running an online newspaper like a startup. But then I saw this tweet
from the Nieman Journalism Blog that says "Back of the envelope: I think Seattle P-I needs $5m/yr in ad revenue to break even with 40 employees." If this is the case, there is something wrong. $5M/40 staffers, is $125K/year per staff member. Very un-startup like. I should reiterate that this tweet was NOT from the Seattle P-I, so I can only hope that they are forecasting their financials slightly differently. Before anyone jumps all over these numbers, I realize they are very rough and simplify the cost structures of these organizations. But that is the point. The logistical and operational overhead should be neglible - there are no printing presses, deliver men, unions, paper costs etc. There are servers, computers, and bandwidth - which are essentially free (or very, very cheap). Software? Open-source. Office-space? Find the cheapest you can get. That leaves us with one cost, the people. Sure, the journalists are your most important asset, but why not think of this as a bootstrapped business? Startups don't pay their staff an average salary of 125K. The InDenverTimes website says that they are embarking on a 'bold and creative' effort, combining traditional distinguished reporting with 21st century electronic delivery. Well, I would say these online-only newspapers should take it one step further. Combine the 21st century delivery with a 2009 entrepreneurial mentality
. Be very lean but agile. Be cheap but resourceful. Take advantage of constraints by being creative. Focus relentlessly on giving people what they want. Only work on projects that create a tremendous amount of value for your readers. Hire lots of young, hungry journalists and pair them with a few experienced ones. Start small (even smaller than 30 or 40 staff), and work your way to break-even. Then grow, using cashflow or outside funding. If you can run your newspaper like a startup and create something that people want, I will gladly invest. Edit: Mathew Ingram
pointed out in a tweet that "even startups need financing, no? most journalists can barely afford pen and paper, let alone funding a startup." That's a fair point: not all journalists can take a startup salary and wait around until Ramen profitability. But not all startup founders can do it either. But startups find ways to get it done, whether its bootstrapping, finding angel money, freelancing on the side etc. By applying the same "relentless resourcefullness
" to newspapers, I'm confident journalists can get it done as well.