Huffington Post Still Making Losses, What Future for online free news?

JTMan

The WSJ have published an interesting article about the Huffington Post here and about making money from free online news. (Free version via Google News here).

One decade, after the Huffington Post launched, it still making losses and cannot get to an operationally profit margin.

We finally have real answers to the question, as two people shared some Huff Post financials—the ones viewed by AOL’s own board—directly with me.

The numbers reveal an operation with defensible digital revenue and growth. They also show a decade-old outfit with a knack for not making money.

There is still no denying the reality of things. The 850-person operation so far hasn’t created sufficient margins to produce even an operating profit.

“We couldn’t figure out how to get this thing to make money,” said one person familiar with its operations.

But isn't the Huffington Post simply 'investing in growth'?

But does the pursuit of growth also help paper over more unsettling realities? That absent this pursuit, the underlying business looks like the blur of a sprinter who, upon stopping, is revealed to be naked?

If The Huffington Post still, 10 years later, can't make money from giving any news for free, what future is there for Independent.ie and The Journal? When the print business eventually goes at INM will a naked loss making online operation be left? I mean 96% of INM revenue still comes from print, their online operation is still a business basket case. How long can Distilled Media bankroll losses at The Journal?

Simon Kuper, of the FT, said at the Dalkey Book Festival yesterday:

The future of news is 2 models.

The first model is paid high quality journalism aimed at the 1% top of society who will pay for quality news. Thankfully, I write for one of those publications.

The second model is free news for the rest of society. People will not pay for this content. The second model will need to compete with the BBC, Guardian and Daily Mail who give away their content. Revenue will not cover quality journalism. Some of these outfits pay as low as 40 euro per article to journalists. Bloggers and people who are willing to write for free will be dominate the second model.

coylemj

Fair play to Arianna, she set up that website, got people to write articles for next to if not nothing and then pocketed a bundle of cash. Does she still have some silly title like editor-in-chief?

I'm not surprised it's not making money, I just looked at their UK website and can't see a single ad., probably thanks to Adblock!

Schadenfreudia

It's sad.

But to get a mass media website that survives without Western Corporate support (via ads) you must read the English websites of Russia, India, China, Latin America and Africa.

They are, of course, (except maybe in the case of India and Latin America) Government supported, effectively just like the Corporate Western MSM.

speedboatchase

As I see it, there are three models for the future of news sites:

1. Providing indistinguishable native content - Buzzfeed
2. A wealthy benefactor who doesn't mind absorbing losses - Jeff Bezos/Washington Post
3. Paywalls - Telegraph/The Times

I think Huffington Post has grown too big to thrive without one of the above models.

JTMan

speedboatchase wrote: »

As I see it, there are three models for the future of news sites:

1. Providing indistinguishable native content - Buzzfeed
2. A wealthy benefactor who doesn't mind absorbing losses - Jeff Bezos/Washington Post
3. Paywalls - Telegraph/The Times

I think Huffington Post has grown too big to thrive without one of the above models.

Yeah, well, broadly there are 2 models. (1) Paywall and (2) advert-supported.

(1) Paywall is a proven profitable business model with high quality content only thus far. FT, WSJ etc.

(2) Ad-supported model can be:
(2.1) Bloggers - who will write for free - proven model,
(2.2) Mass media content for huge mass captive audience - Daily Mail, TMZ, BuzzFeed, Vice etc - Jury still out if they can get this to a profitable model, some probably can, most can't. The key ingredients seem to be unique content, huge audiences and well researched / presented content.
(2.3) Content with long-term cross subsidies from rich owners. Washington Post etc. Model works as long as the deep pockets last.
(2.4) Content with cross subsidies from other business lines. BBC etc. Model works as long as license fees / other cross subsidies can be maintained.

There are plenty of ad-supported models, such as Independent.ie, The Journal, The Mirror, Huffington Post, Daily Express etc that do not fit into these models. They seem to be drifting in somewhat of an illusion that ads will cover journalistic costs while been supported by a rich parent, someday reality will dawn.