The Business Model Of An Online-Only Newspaper

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flickr: Annie Mole

The Seattle P-I may have it right.

Peter Kafka at Mediamemo posts a spreadsheet he got from Mark Josephson, the founder of Outside.in, who figures that the online-only newspaper of tomorrow will support about 20 staff. Six of those are reporters, or “news gatherers” or “content creators” or what have you.

The “paper” then has to get 40 million page views a month, plus another 40 million from a third party network. This results—if the ad folk can sell high enough CPMs—in a profit margin of 43 percent. (Yikes!)

Kafka writes:

If you think his assumptions about ad rates are too aggressive (and some local publishers I’ve talked have given me that feedback), you could knock them down. Same thing with page view goals. Or if you decided you wanted to run the business at break-even instead of trying to make a profit, you could do that too, and see how many more people you could afford to hire.

But no matter how you fiddle with the numbers, there’s no way that Josephson’s model gets you anywhere close to old newspaper staffing levels, where a paper like the Seattle Post-Intelligencer employed 150 people on the editorial side alone.

Play with your own numbers at this spreadsheet: http://bit.ly/newlocal