Former BusinessWeek Editor Launches Mysterious Media Startup
John Byrne, the former editor-in-chief of BusinessWeek, has launched his own company C-Change Media. He writes that this is a good time to launch a new media company because there are significant advantages.
He says there is no future in these media business models:
1) Print advertising will never come back. There are just too many options for advertisers today and too much pressure on rates. Sadly, success in print will be measured in single-digit declines, forever.
2) Online advertising will never offset those declines nor save print. There's far too much competition online and far too much available inventory; and
3) Users will not pay for content, unless they're convinced it has immediate and tangible value.
Yet he points to the success of: "Huffington Post, Politico, Drudge, GigaOm, TechCrunch, and other media enterprises on the web have shown us a path forward."
The last time I looked those media companies rely heavily on advertising.
Mr Byrne does not say how his new company will make money:
Focusing on a business audience is smart because they already pay for information. But how will C-Change create a competitive advantage over Bloomberg, Wall Street Journal, Financial Times, and other business oriented media publishers? They have considerable resources and access to timely information. He will need a real-time capability. [Please see: Groovy: Real-Time Data Could Aid Media Companies - SVW]
C-Change can move more quickly than larger publishers and it could potentially attract enough users that it might one day be a good acquisition candidate.
But matching a top BusinessWeek editor's salary (est. over $500K) with the revenues from online content will be challenging. Not to mention salaries for his team of editors and technologists.
I wish Mr Byrne well but even new media is suffering along with the old. Most new media sites have to branch out into conferences to pay the bills, plus research reports. It's not easy to make a decent living --- even if you aren't old media and loaded with legacy costs and legacy thinking.
Many of the latest new media companies are taking a low-end approach to content creation, such as Demand Media which tries to commission articles related to popular search terms and pays rock-bottom rates because that's the value in media content these days. In an advertising pageview world a pageview is a pageview whether it is quality media or low-end machine generated media.
Business media markets are far more lucrative than for general media but even there we will see companies competing heavily and undercutting each other. Because they can.
C-Change's operating costs will certainly be lower than for incumbent competitors but there is still one very large cost: marketing.
Getting attention is harder today than ever before and the noise level is going to increase exponentially because everyone has access to the same publishing tools.
As Mr Byrne says:
Launching a new media startup today is very challenging. It will be interesting to see what C-Change will come up with.
It's always good to see people trying out new media business models. Because if they are successful it means others can follow and that means quality journalism is preserved -- we all win.
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