Tuesday, April 13, 2010

Who Will be the Sole Survivor?

Several entities, including a couple with money, are getting into the local online politics-news-aggregation business. But as someone who publishes original political content for free, I can tell you that the margins are low, the work is constant and not all of them are going to make it. In fact, just one of them might be the Sole Survivor.

Who’s playing in the cyber-sandbox at the moment? First, there is the Post’s revived Maryland Politics site (formerly known as Maryland Moment), which is based around John Wagner’s steady statehouse reporting and morning aggregation by Aaron Davis. Then there is Marylandreporter.com, an online startup by former Baltimore Examiner statehouse chief Len Lazarick that depends on right-wing financing. This site also does original reporting backed by daily aggregation. There is also Center Maryland, a project founded by former O’Malley officials who operate a PR firm. It too offers reporting and aggregation, but with a “centrist, pro-business voice” that benefits the PR firm’s clients. And now there’s a new player on the way: a Washington-area local news site backed by Politico and linked to WJLA and News Channel 8. Like the other sites, it will do a combination of reporting and aggregation. Unlike the others, it claims it will have 50(!) staffers. Other than their business model (occasional original reporting and lots and lots of links), the four sites share another common trait: they are all supposed to operate in the black over the long run.

We have seen this before. The first for-profit site along these lines in Maryland was PolitickerMD. Part of a network of state-specific political blogs owned by New Jersey millionaire (and new Ivanka Trump husband) Jared Kushner, PolitickerMD had one paid editor and one paid reporter who roamed the state looking for tidbits. And that was what the output of the site resembled: little bits of information with minimal context and no perspective. The site folded, along with most of its counterparts in other states, more than a year ago.

Next came Maryland Commons, a political news and opinion site founded by retired charity fundraiser Neil Didrikson in late 2008. Didrikson obtained a grant, produced a couple independent articles a week, sometimes hired freelancers to write with him, and supplemented that with daily aggregation. Sound familiar? Didrikson told your author last spring that his backers believed the site had a shot at breaking even if it received 10,000 visits per month. Its high point was 3,000. The site shut down in August.

How difficult is it to make money from an online news-politics-aggregation business model? Consider the experience of Dan Silverman, the founder of D.C.’s Prince of Petworth blog. Silverman created the site in 2003 to chronicle the District’s Petworth neighborhood and his coverage spread to other areas in the city. It is now one of D.C.’s most popular blogs, and that is saying something because D.C.’s youth-skewed demographics make it a FAR more blog-addicted jurisdiction than Maryland. Silverman quit his day job, which paid him nearly six figures, in September to blog full-time. Silverman admitted to taking a “huge salary cut” and makes just enough money to pay his bills.

If any blogger can stay above water with no day job, it should be Silverman. His site demands little or no overhead cost and it is incredibly popular. Silverman told the Examiner that his site received “6,000 to 7,000 hits a day.” Now that could mean several things in terms of site traffic. A “hit” is a very broad definition of traffic that is seldom used directly, but is often used colloquially to mean page views or site visits. Silverman’s statistic counter, Sitemeter, does not track hits at all. So how much traffic is Silverman really getting?

Since January, MPW, which has been the most-visited political blog in Maryland every month since November 2008, has averaged around 1,100-1,300 daily weekday visits and 2,000-2,500 daily weekday page views. That equates to roughly 30,000 monthly visits and 60,000 monthly page views. We surpass Maryland Commons’ estimated break-even point (which we believe was optimistically low) by a large margin. Depending on whether Silverman means visits or page views when he uses the term “hits,” he could be getting three to six times our traffic. That is far behind DCist, the King of D.C. blogs, but would blow away any blog in Maryland. And yet Silverman makes barely enough money to pay his bills.

It would take many, many years for any Maryland political blog to equal the success of the Prince of Petworth, which has been around a long time, produces tons of original content, has a broad geographic reach and operates near the core of D.C.’s urban culture. That means the economics of operating a solvent site with paid staff in Maryland using a news-politics-aggregation business model are nearly impossible at the moment. That is doubly compounded by a business plan calling for 50(!!) employees as proposed by Politico. And it is further compounded by the fact that a number of sites are attempting to do virtually the same thing, at the same time, with little or no audience history and no record of making a profit.

And so who will be the Sole Survivor? Whoever is willing to lose the most money is likely to last the longest. Anybody want a piece of that action?