Politico Grows Amid the Newspaper Downturn
Important Details: During the US election, news watchers and listeners could hardly avoid Politico. The two-year-old political news company placed its commentators throughout cablecasters’ talkfests and on public radio. On TV, its bright banner backgrounded its representatives, and soon Americans were growing as accustomed to the site’s brand as they were to the New York Times or Washington Post.
Politico has now grown to a staff of 100, based in Washington, D.C. In January, its Nielsen-reported usage showed three million unique visitors and 17 million page views, while it says its internal numbers are “about double” of those. It shows a time-on-site usage of almost seven minutes for the month of December, down from more than 10 minutes in November; both those numbers run between a quarter and a half of the time spent on far more established and more staff-intensive news websites.
The site is headed by publisher Robert Allbritton, who also serves as CEO of Allbritton Communications, a family-owned string of TV stations that includes Washington’s ABC affiliate, WJLA. Allbritton built the site along with top editors John Harris and Jim VandeHei, both alumni of the Washington Post who in turn hired high-profile journalists from Time Magazine and other well-pedigreed political analyst stock.
While the site has grow its destination business, it recently launched a new syndication business — the Politico Network — as well. That network now comprises 105 media websites, a majority of them local newspapers, with most of the rest broadcast. The syndication idea is a growing one on the web, flexible in its business structure. Politico provides a module of Politico national political stories to affiliates, with a unit of content attached. If an affiliate uses seven Politico stories a week, it gets 50% of the ad revenue. If it uses 14, it gets 40% and if it uses, 21, it gets 30%. Politico is also using its growing sales staff (now numbering eight) to sell ads adjacent to the political news stories of its affiliates, placing relevant ad pages on an opt-in basis. The overall notion: the political news audience (“male, wealthy, well-educated”) is a good one, sought after by advertisers, and Politico is developing the experience and national reach to match advertisers to it. The site is gaining CPMs of about $20 for Politico.com itself, says Roy Schwartz, vice-president of business development and marketing. Affiliate network sales are largely going for $8-12 rates, at this point.
Additionally, Politico and Reuters recently announced a partnership in which Politico provides all its stories (but not blog posts) and Reuters packages the product as an additional feed to its wire subscribers, with Politico gaining a revenue share — and of course, branding. Moving two ways, Politico also provides up to 10 Reuters stories daily to Politico Network members on a no-fee, revenue-share basis.
Significantly, while Politico gets most of its national recogniton from its website, a majority of its revenue is still driven by print. It publishes a five-day-a-week newspaper when Congress is in session and now distributes 32,000 daily in the Washington, D.C. area. The free papers just gained distribution at 70 local Starbucks outlets, which will also host in-person “coffeehouse chats” monthly, often led by chief Politico correspondent Mike Allen.
Implications: Outsell believes the Politico model is one all news publishers can learn from. As much of the news industry has been receding, it has burst — and gained speed — out of the gate. Among the lessons it teaches:
- Journalism counts: Tough-edged, authoritative, breaking news and analysis is part and parcel of the brand;
- Cross-promotion is a foundation, not an add-on: From its inception, Politico’s founders have been savvy about placement of their top people on the talkabout media — broadcast — of the day. They’ve invested in staff in keeping that well-oiled little machine running;
- The hybrid model is key: It’s a glossy web brand — but gets more than half of its revenue from print ads;
- Finding a niche and working it is fundamental: Politico isn’t a news site. It’s a site made hospitable for political news junkies. It took a category of “general news” and turned it into a niche as sought-after as travel or tech.
And, irony of ironies, Politico is now heading up a network of long-established political news companies, companies who have had similar opportunities, but have failed to grasp them. That partnership can be mutually valuable, but it shows how topsy-turvy the news publishing world has become.