New D.C. News Start-Up Raises the Local Ante
Originally published by Outsell on Jan 5, 2010
Advancing the business of information. Information on Outsell's reports
Important Details: Planned for debut next spring, a new Politico-related Washington D.C. start-up promises to test a next generation of local online thinking and business practice.
The site is funded by Allbritton Communications, the company that owns the fast-rising Politco national politics website, and, significantly, by the highly rated ABC 7 and NewsChannel 8 TV channels in the region. That lineage means at the new venture, headed by Jim Brady, former top editor for the Washington Post’s digital operations, will exhibit at least four model-busting characteristics:
- It’s a for-profit start-up, something unusual in an environment in which foundation- and angel-funded operations have so far been the dominant model.
- It plans to field a news-creating staff of between 25 and 35 FTEs, a magnitude of three to five times greater than other local start-ups we’ve seen.
- From day one, the two broadcast sites will merge into the new, so far unnamed, site, providing significant immediate traffic, associated branding, additional reporting and video.
- It will leverage business efficiencies from the mother-ship Politico operations.
“It’s all the things I find fascinating about the medium without the legacy anchor,” says Brady, who will be the business head for the new site and now serves as president of digital strategy for Allbritton.
Brady notes what other news entrepreneurs have said as well: he’s not trying to recreate a newspaper online; he’s creating a new digital local product that will both resemble and depart from older journalistic models.
Curiously, the first week of this year saw the emergence of news about the Washington Post’s own efforts to partner. The Post has recently announced a content-producing arrangement with start-up, The Fiscal Times, and now that partnership is drawing fire, as journalistic standards are put in question. That’s the kind of issue we’ll be hearing much more about as news companies — old and new — reach out.
Implications: The D.C. news start-up is a significant departure from the spate of local news start-ups we’ve seen in the past couple of years.
This is how things go in the digital world. Politico started as an idea in January, 2007 — a high-quality news site, led by veterans from Time Magazine and the Washington Post. It made its bones in the run-up to the 2008 U.S. Presidential election, and hasn’t looked back, now placing in the top 15 of the U.S. news sites, pulling a third or more of the Washington Post’s, for example, unique visitors per month. That model — web-first and web-quick, promotion-savvy and using print as a helpful ad niche — is one that now can be applied to other ideas. So the DC site will be a new test of it within a metro context, and it will be an experiment to which that all daily papers must pay attention.
Outsell believes that the components of the site’s strategy fit the times. In combining traditional “print” and “broadcast” journalism, newly for digital, it can leverage a broadband, visually oriented audience and substantial awareness out of the box. We also expect Brady, who’s been on the leading edge of web innovation for a number of years, to seize upon updated notions of low-cost, high-impact regional aggregation and efficient hyper-local reach.
That said, the site’s large staff — and paying professional wages — provides a major test for a digital-only (or digital-mainly) business model, especially as it faces off, inevitably, against the Washington Post and WashingtonPost.com, still one of the most successful and impressive regional sites (see WashingtonPost.com Builds on Impressive Start, April 2, 2008).
We would think that Allbritton would give the site at least 36 months of running time to get to profitability. Revenue growth should be aided by several factors including the overall economic recovery, expected growth in overall online ad spending of more than 25% over the next three years, and the benefit of serving an affluent market.
Lastly, the start-up points to one other trend that may keep traditional publishers up at night: as their alumni depart — those pushed to leave or those who jumped — some of those alums are taking with them substantive digital news — and digial business — experience. Traditional journalism’s cutbacks are, in fact, creating and fueling new competition. Fifteen years of the digital news web has created a wealth of experience, and some of it is finding new means of funding and of expression.