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Taking venture capital and starting at -$22M doesn't help. There have been a lot of very successful and profitable media companies[0]. The industry isn't broke
by nikcub 12y ago
Taking venture capital and starting at -$22M doesn't help.
There have been a lot of very successful and profitable media companies[0]. The industry isn't broken (far from it), just some of the models are.
This also isn't a new revelation: Arrington wrote a post on TechCrunch in 2008 warning other bloggers not to raise money[1]
Re: the effectiveness of advertising. This is a $120B+ annual industry with entire billion-dollar sub-industries involved in measuring its effectiveness and optimizing value. If it didn't work it would have slowed, shrunk and or shut down a long time ago - but rather it is growing insanely each year. Advertisers and the over-qualified engineers working in adtech are not idiots.
[0] TechCrunch (disclaimer: worked there, profitable - sold), ReadWriteWeb (profitable - sold), Huffington Post (profitable, sold for $350M+), ProBlogger (profitable), etc. etc. etc.
[1] http://techcrunch.com/2008/03/19/more-bloggers-raising-money-here-come-the-politics-and-here-comes-my-rant/ http://techcrunch.com/2008/03/19/more-bloggers-raising-money...
- vonnik 12y agoI'm not sure that all the examples you cite are evidence of very successful and profitable media companies. ReadWriteWeb was acquired by SAY Media for less than $5M and they cut it loose two years later. HuffPo wasn't turning a profit for AOL in 2013, and Tim Armstrong wouldn't say in Dec. 2014 if it was earning a profit, which basically means it's not. In any case, HuffPo's revenue is largely driven by rehashing the original reporting of other outlets, and that is definitely not sustainable journalism. [0]http://techcrunch.com/2014/11/13/say-media-selling-off-readwrite-xojane/ http://techcrunch.com/2014/11/13/say-media-selling-off-readw... [1]http://www.businessinsider.com/aol-huffington-post-profit-2013-12 http://www.businessinsider.com/aol-huffington-post-profit-20... [2]http://www.businessinsider.com/huffington-post-over-200m-revenue-says-tim-armstrong-2014-12 http://www.businessinsider.com/huffington-post-over-200m-rev...
- declan 12y ago<nikcub> is certainly right about the dangers of raising venture capital as a media company. Few news organizations generate outsize returns. In terms of companies sold, there's also CNET, which was sold for $1.8B to CBS in 2008. That was after an operating loss of $6M in 1Q 2008.
- nikcub 12y agoRWW operated for 8 years with no money raised and then cashed out when Richard retired. HuffPo makes more in revenue p.a than what AOL paid for it. They may have only technically not been profitable at acquisition because of their reinvestment in business. There are a ton of other profitable, bootstrapped media businesses - I just happen to know those I mentioned.
- vonnik 12y agohttp://www.washingtonpost.com/blogs/monkey-cage/wp/2015/03/11/the-decline-of-journalism-and-the-rise-of-public-relations/ http://www.washingtonpost.com/blogs/monkey-cage/wp/2015/03/1...