6 ms·

I fully expect to see more announcements like this in the media industry over the next couple of years specifically for these digital media "startups". They ar

• jdavis703 10y ago
  Not debating your point, but how come in the old days media outlets were able to become profitable when they had (have) both union costs, and costs related to actually printing and distributing a physical good?
  • symkat 10y ago
    Probably because people actually paid for media at the time?
    • joshu 10y ago
      Nope. For newspapers, at least, this accounted for maybe 20% of revenue. The remainder was ads and classifieds. Everybody is in trouble.
    • loudandskittish 10y ago
      But people paying for a newspaper barely covered the cost of printing it, and even then, plenty were taking losses on the cover price.
      • superuser2 10y ago
        The newspaper was the primary way to get ads into the home. Each city paper had a Google-like position in that city's ad market. Quality could be higher because ad reach was based in part on subscriber count, not just the attention-grabby-ness of particular headlines.
  • chongli 10y ago
    Two words: classified ads.
    • danso 10y ago
      Yeah, this. I know Craigslist feels like an entire era ago, but at its peak, it ate up 25% of industry revenues. Media companies were definitely slow on the existential uptake, but I think a lot of industries would have a problem with a 25 percent drop in revenue over 5 years. And that was just one of the problems that media companies had to track. It'd didn't help that newspapers were just exiting a period of golden complacency in which cities were monopolized by a single newspaper. If you wanted to print an obituary notice for your mom in tiny font in a 4 inch space, you paid $500 because what the hell else were you going to do?. When I was in college one of our professors told us that running a newspaper was like running a printing press that printed money. And he was right. The problem with newspaper companies was that they didn't reinvest enough profit into innovation and experimentation.
      • PeterisP 10y ago
        On the contrary, I believe that newspaper companies were correct when they didn't reinvest most of the money into innovation and experimentation. Experimentation and investments would have allowed an average newspaper to become (also) a platform like Mode Media, ultimately a waste of money and also wouldn't change the fact that the whole industry is losing profitability - but taking the profit out was obviously useful to the shareholders. Most companies exist to make money for their owners. Often the best way to do that is to grow and reinvest into more growth, but there certainly are cases where the best option is to milk an existing revenue stream dry and squeeze until it runs out, and place all that money in an entirely different industry - IMHO newspapers a decade ago is a prime example of that situation.
• eli 10y ago
  The media startups that raise tons of money get lots of press. Some of the ones that raise little or no money but bootstrap are doing very well, you just don't hear much about it. We're profitable, our economics are great, and we're hiring to expand into new verticals.
  • GoRudy 10y ago
    Completely agree here... we did that. Bootstrap, small team but still at scale (and highly profitable).
• DougN7 10y ago
  Is it just me, or a lot of these never-gonna-be -profitable startups just Ponzi schemes? The first few people that start it eventually take some money off the table as they keep getting funded, and eventually somebody is left holding the bag. If that's how it works, there is no reason for the same people to go out and do it again.