Analysis: No 'Magic App' For Journalism As Omidyar's $250m First Look Venture Takes A Second Look
Pierre Omidyar, the co-founder of eBay, has delayed the roll-out of his $250m First Look Media venture.
In a blog post, Omidyar wrote:
We have definitely rethought some of our original ideas and plans... rather than building one big flagship website, we’ve concluded that we will have greater positive impact if we test more ideas and grow them based on what we learn. We are unwavering in our desire to reach a mass audience, but the best way to do that may be through multiple experiments with existing digital communities rather than trying to draw a large audience to yet another omnibus site.
And rather than immediately launching a large collection of digital “magazines” based on strong, expert journalists with their own followings, as we imagined earlier, we’ll begin by building out the two we’ve started and then explore adding new ones as we learn.
...I believe deeply in the importance of the work of independent journalists — people like Glenn Greenwald, Laura Poitras, Jeremy Scahill and Matt Taibbi. Whatever direction our experiments lead us, we will continue to invest in our journalists and support their commitment to fearless, fact-based reporting...
I expect we’ll be in this planning, startup and experimental mode for at least the next few years as we explore how to become integrated into people’s lives in meaningful ways.
Foremski's Take: It's been clear for some time that Pierre Omidyar has been struggling to find the right strategy for creating a viable mass-market media business. Nine months into the venture there is no baby to announce, just a long, vague post about having a strong commitment to journalism, the greater good for society, and the marvelous opportunities that technology can bring. But there's nothing new, nothing concrete to announce.
Omidyar says that he's interested in launching small media experiments, which will inform his future launch strategy but will last "for at least the next few years." This is a blow to many in the journalism community who expected Omidyar (and Amazon's Jeff Bezos) to come up with a solution to reverse the fortunes of the media sector because of their familiarity with technology.
There will be no magic app to save journalism.
Searching for strategy...
The venture looked troubled by a lack of strategy from its early days. Omidyar's heart and his money are in the right place when he talks about the importance of journalism to the health of society, but his problem has been in figuring out a viable business that can carry the burden of his ambitious mission.
Earlier this year, Omidyar invited a small group of veteran editors and journalists to offer advice on his venture plans. But that meeting failed to crystalize a launch strategy.
First Look Media must quickly become commercially viable or it will be seen as a billionaire's vanity project and its reporters will struggle for credibility and relevance.
Omidyar wants to build a type of media experiments laboratory in San Francisco and double his editorial team to 50 people by the end of this year. However, the delay of its mass-market media business could mean the loss of current journalists, who joined the venture expecting a fast launch instead of years of media experiments.
And it will be hard to recruit new editorial and technical talent if there is little opportunity to reach a mass audience over the next few years. It's a loss of momentum that needs to be reversed otherwise there will more delays.
Media shift still shifting...
Omidyar's challenge is that the media business model continues to shift in the wrong direction. The media industry is still being disrupted and these days, it is by the shift to mobile, where media companies are making one-tenth of the revenue from desktop.
It is a similar difference in revenues seen in the transition from paper to online ads — except that this time, it is at a much faster pace. It's not possible to build a new type of media business when revenues are shifting so quickly, and falling so fast.
What's needed is innovation in the media business model. Solve that and everyone gains.
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