Is Big Online Media Doomed?

You only have to observe the painful and austere transition of Time Inc. to see the grim portents of a much leaner future. And a lot of this has to do with a double problem: how to get revenue from readers and from advertisers in sufficient amounts to sustain the kind of outfit that was once so dominant. Right now, most big sites have no purely online subscribers and the ad rates are leagues below what they once were for print – and declining. In so far, as digital advertising is growing, the lion’s share goes to new media companies like Google and Facebook rather than general interest media sites. Derek Thompson faces some grim facts:

It’s not a coincidence that the most successful big digital media property, BuzzFeed, isn’t really in the old-fashioned adjacent advertising business at all. It’s a website where original stories live next to “promoted” ads engineered by an in-house laboratory for building advertising that will go viral. That’s not like Time Inc going into digital journalism. It’s more like Mad Men going into digital journalism … Maybe someone like Vox Media will figure out how to build the Time Inc. of the Internet. I hope so … But I don’t see a thriving future for the largest digital journalism enterprises as businesses, even though the web offers sensational opportunities for digital journalism as a product.

My bet is that small, niche, and premium digital journalism survives with high CPMs and light costs, while big, broad, and everything-for-everyone journalism struggles with low CPMs and heavy ambitions.

That’s good news for the future of the Dish, but pretty rough for those with ambitions to equal the media giants of the past. And even here, with 29,000 subscribers, we have a budget for just ten staffers, and no office. Which is why we’ll be dipping our toe into the ad market for non-subscribers soon – while keeping our premium product ad-free for those who are fully part of the Dish subscriber community. Kilgore uses the occasion to pour a big bucket of frozen water over the recent uptick in hiring for journalists:

This should operate as a corrective to the under-warranted optimism associated with a few new journalistic enterprises that have snapped up a handful of familiar names and created a brief churn in opportunities for small fry as a declining number of job openings ripple through the industry. Niche markets will remain, of course, and some magazines and websites (including, I trust, WaMo) will be able to chug along by shining brighter against a darker background. But the brief sense of a Klondike Gold Rush upon the intrusion of some tech money into the news-and-views biz will likely subside, and soon become as anachronistic as the liquor carts that once trundled through the halls at TIME.

Liquor carts! Now those were the days. A small promise: if the Dish ever gets an actual, you know, office (instead of a weekly meeting at a local diner), then we’ll find one.