James Mirtle (formerly of the Globe and Mail) explains quite succinctly the state of the business and why he left the Globe and why his new endeavour with The Athletic is from his point the way to go. He's a great columnist, like Duhatschek and Johnson and could see the writing on the wall.
https://theathletic.com/40690/2017/0...has-a-paywall/
Quote:
One of the things I’ve made an effort to do the last few years is learn more about the business side of how the media operates. A lot of people in the traditional media feel helpless the way the business is floundering, and my response to that was to get as much information as I could and at least understand the why behind those struggles. I was on audience committees at the newspaper, used analytics to track how stories performed in terms of engagement and followed industry trends in terms of business models.
What I learned along the way is there is a big disconnect between what the public believes is happening in media and what is actually happening.
Journalists are not losing their jobs because they are bad at what they do. The No. 1 killer of newspapers and websites – and radio and television appear to be next – is ad rates, in print and online. As Facebook and Google corner the ad market, and companies increasingly turn to social avenues to promote themselves, ad rates are dropping, often at exceptional rates.
In the (recent) past, you could attempt to make money online by going for scale – a high number of clicks – but that is becoming increasingly difficult. Even a very high-end website, like the New York Times, has online ad rates of about $8 CPM (cost per thousand impressions). Most newspapers and websites are much lower than that – and the number seems to be falling every year.
Even very well read stories for large outlets may only generate $75 or $100 in revenue online. Not enough to pay a writer for a day’s work, let alone add in an editor, or any other costs associated with a large company producing content.
And those are the ones that hit relatively big. Others about more niche subjects, or that require a high level of sophistication, research and time, would generate even less revenue relative to the cost to produce them, in that click-per-penny model.
That, on a basic level, is why newspapers like the New York Times and The Globe and Mail are pursuing a subscription model. They have to in order to produce the content that makes those brands what they are. They have done the math that shows getting even two or three subscribers for a story is worth more than 20,000 hits.
The alternative is to chase web pennies – and bleed millions of dollars a year.
We know that won’t last. We know now many of those outlets will fail.
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There has to be another way to get the coverage everyone is seeking. Like most things on the planet, the digital age is shifting paradigms and models of how we're used to the world functioning beneath our feet.