Online media takes blow as stocks drop
In the media world where anything seems possible, many people thought the Internet would be the perfect place to launch new publications. After all, online publishing avoids all those costly factors that brick-and-mortar publishers must deal with: printing presses to print the publication, paper to print it on, trucks to get the publication to market, fuel for the trucks, salaries for the printers, drivers, etc.
So it was no surprise that many traditional journalists left traditional media to sign up with online ventures like Slate, Salon, APBNews, thestreet.com, quokka.com, and others. Two years ago, they looked like the next sure thing. And this impression of inevitability was enhanced when well-known media and cultural personalities signed up for writing gigs, and when staff writers and editors from online media sites began to appear on the Sunday talking-head news shows.
But oh, what a difference a stock market downtrend can make. What once looked like a promising future paved with digital gold, now looks like a brutal battle of survival. Numerous online media sites have either folded or greatly reduced their staffs. Of all the sites mentioned above, only Slate still looks completely stable, and that's only because it is backed by Microsoft.
Yet there is a silver lining in this dark cloud. Most of the problems these online journalism enterprises ran into can be boiled down into three factors: overexuberance, poor financial management, and, well, greed.
The overexuberance part is easy to understand, because two years ago everybody was overexuberant. Staffs were large and well paid. No one really seemed to care to much about actually making money - that would come later. The most important factor was attracting an audience, and some sites spent wildly in an attempt to do so.
Which brings us to our second factor: poor financial planning. APBNews.com was devoted to covering crime and safety the way thestreet.com covered the financial world. The site was very good and won numerous journalistic awards, but when hoped-for advertising and new investment dollars didn't appear, it was forced to lay off 140 employees in June 2000. While APBNews was a great success journalistically, it overextended itself financially way too early. It went for the Big Bang approach, hoping for instant success, rather than long-term growth. Then when the bills came due, and new dollars weren't available, the site almost disappeared. A new investor was finally found, and the site is still operating, but with a much smaller staff and a more limited mission.
Finally, there is the greed factor. Stephen Johnson, the editor of Feed Magazine (one of the best new online media sites, www.feedmagazine.com), described this aspect well during a recent seminar in Cambridge, Mass. Speaking about the role and future of online media, Johnson commented that in the beginning of the Internet, the idea was that you would start with a small staff, build slowly, and then one day, have a large publisher buy your site for a reasonable return, perhaps in the hundreds of thousands of dollars. But then the Internet boom came along, and suddenly, everyone was going to be a billionaire.
"And the thought became that if I didn't make millions, or even billions, from my site, then I was a failure and somehow my parents wouldn't talk to me anymore," Johnson joked. "If we could just forget the past three years, and get back to the idea of a smaller payday, but still having a personally rewarding experience, ... maybe that's what we should be aiming for."
Online media will prosper. But they will have a few more bumpy days before they mature into the reputable sources of information and the profitable businesses that those of us who work in them know they can be.
Tom Regan is associate editor of The Christian Science Monitor's Electronic Edition. Send e-mail comments to Tom@csmonitor.com.
(c) Copyright 2000. The Christian Science Publishing Society