The trick in the new online, digital paradigm was making it profitable…Therein lies the rub.
It’s not too often that an insider gives up any real tangible figures or metrics highlighting just how their business is doing…where it started from and how it is becoming successful.
Surprise! Henry Blodget (pictured), CEO of financial news and analysis site Business Insider (which was just named a Top 25 Financial Blog by Time.com) has done just that in this article for FOLIO magazine by Matt Kinsman:
At FOLIO:, we’re used to having to cajole publishers to share metrics to back up the case they’re making for their own success. But every now and then someone lays it all out, understanding that solid revenue, net income and EBITDA (Earnings Before Interest, Tax, Depreciation and Amortization) figures go a lot further than phrases like “synergy” and “relationship with our audience.”
Kudos then to Henry Blodget, CEO of financial news and analysis site Business Insider (which was just named a Top 25 Financial Blog by Time.com), who shared the type of proprietary financials that keep most PR heads up at night in a post making the case for the viability of “digital news” as a business. (The admissions come on the heels of Huffington Post’s $315 million sale-or as one talkbacker to Blodget’s post wrote, “The headline on this post should be: Dear AOL, For your consideration, we’re an excellent Web property too!”)
The stats: Business Insider generated $4.8 million in revenue in 2010 (up from $39,495 a couple years ago), mostly from advertising. The company was profitable in 2010 (making $2,127), but Blodget warns it will dip back into the red over the next few quarters, due to aggressive investment, spurred in part by New York State’s capital tax. “Making $2,127 feels about 2,127 times as good as losing money,” he writes. “And it makes us confident that, if we keep working hard, and we keep getting better, we’ll be able to build a successful business and a truly great product someday.”
The Costs Of Making Online Content a Real Business
While we’re definitely in the “aggregation”-oops, sorry, I meant “curation” age-many online startups are investing in staff and resources in creating original content (which is more than can be said for many of their peers coming from traditional media).
Blodget [pictured] acknowledges the knocks against HuffPo’s content (paying a few big name writers while plucking content from low-or-unpaid bloggers, generating SEO-bait) but he also says that with HuffPo expected to grow another $20 million to $50 million in revenue that it “will likely hire a lot more New York Times staffers to go with the ones it has already got. In other words, HuffPo will keep getting better.” (HuffPo did just snap up political writer Jon Ward from News Corp’s The Daily).
Blodgett doesn’t reveal what he’s paying to generate content, but says “We didn’t make that profit because we’re a sweatshop, by the way.” He claims a 25-person newsroom, (which is larger than many magazines which are generating far more than $4 million and splitting four or five people-if they’re lucky–across print AND digital).
“Our newsroom salaries for full-time employees, for example (which include bonuses and benefits) are now higher than at many companies in the traditional news industry. Because the digital news business is quite different from the traditional news business, we often promote from within, and we’ve had the huge pleasure of watching folks who joined us as interns grow up to take leadership positions. True, we can’t yet toss around the $300,000-$500,000 a year per brand-name columnist that Huffington Post and Daily Beast are now reportedly tossing around. But, in future years, if we keep doing what we think we can do, we should be able to pay our top people a lot more than we do today.”