The question of how profits can be made from online and mobile news or news-like content has several answers, but none is yet a proven winner.
A recent American news start up NSFW Corp, which billed itself as “The Economist written by the Daily Show”, has this week closed its print edition and folded its digital business into another company, which is, itself, still reliant on angel investors from Silicon Valley.
And here lies the dilemma for the big global brands like Yahoo and The Daily Mail, or local start-ups like The New Daily, particularly those with a focus on serious journalism. NSFW Corp attempted to combine serious news content with hip and ironic twists, but that hasn’t worked out and perhaps the market for serious journalism is not where we think it should be.
On top of that uncertainty, the process for monetising the digital click-stream, whether on the desktop or via mobile devices, is still a large known unknown.
Television still dominates the global advertising market, while print advertising is in decline. On the other side of the ledger, digital revenues are not yet strong enough to support a reliable profit stream. NSFW Corp was offering a niche product and it was behind a paywall; not quite the same as ad-supported content, but another example of trial and serious error when it comes to financially-modelling new news.
Yahoo has a model that relies on volume-selling online and mobile advertising, but at a fraction of the price that print or broadcasting can command. The difficulty is that when you do this, the slice of total revenue you take from the cake has to be substantially bigger than your rivals if you are to survive and make a profit.
So far, no one has come up with a content formula that stacks the eyeballs high enough to satisfy all comers; with or without a paywall. The booking agents currently have the upper hand in setting prices for online advertising.
Mayer has signalled that delivering what she believes will be premium video content, created by Couric and her team, will give the advertisers more “real estate” in which to book their clients’ adverts.
There’s no doubt that Marissa Mayer is a smart CEO, with a strong track record (she was formerly at Google). Yahoo’s investors seem to back her judgment and her sense that the expanding giant of the digital economy will eventually make money from its investment in Couric and news content. However, it is not a given that her vision will succeed.
Brian McNair is a Professor of Journalism, Media and Communication at Queensland University of Technology
This article was originally published at The Conversation. Read the original article.
