Make It Rain

I anticipate the greatest challenge of Project Goldfish will be finding a way to make it profitable. Obviously that’s the challenge of any business but it is especially true in journalism, a field that has for far too long relied on advertisers. Consumers, whether subscribers or newsstand readers, never paid the bills for newspaper companies. It is the fault of media management that readers were conditioned to pay as little as 50 cents for a wealth of news, sports, comics, horoscopes and coupons.

I never understood why it took – and continues to take – newspapers so long to catch up with the digital age. Aside from The New York Times and Wall Street Journal, newspapers have failed to enhance news coverage through their news sites and, aside, from the WSJ, almost all have failed to monetize content in any real way. In the fall quarter, I had a professor point out that it was difficult for traditional media companies to drop what they were doing and move their operations to the Web because of sunk costs and existing infrastructure, such as printing presses. When there are millions of dollars and hundreds of employees invested in a production plant, it is difficult to switch courses.

Then there is debt. The Tribune Company is in bankruptcy. It seems there are weekly updates on plans to pay creditors, pay bonuses and cut costs. At the same time, the company is profitable. Yes, the Chicago Tribuneand Los Angeles Times make money. They just don’t make enough money to keep up with the debt payments.

The good news for Project Goldfish is that it doesn’t come with any of that baggage. I’m starting from scratch, without debt and very little overhead. I’m starting from a place where the answer to every question is: “There’s no money for that.” This philosophy will force me to decide what is a need and what is a want. It will also force me to get creative. Perez Hilton’s office was a Coffee Bean & Tea Leaf. He may be onto something.

In “Clues in the Rubble: A User-First Framework for Sustaining Local News,” Bill Mitchell lists a variety of funding and payment options. They are:

Advertising: Behavioral Targeting; Advertisers as information-providers

User Fees: Memberships; Metered use

Foundation Help: News Services; Direct Subsidies

Government Help: Policy Changes; Direct Subsidies

Crowdsourcing: Donations; Story-funding

Partnerships: with Competitors; Users; Government; Foundations; Universities

Related Businesses: iPhone apps; Books; Info services; Events

Mitchell quotes the 2008 State of the News Media study from the Pew Research Center as saying consumers “still care about such traditional journalism values as accuracy, fairness and independence.” Well, that’s good; at least we haven’t lost everything. What I think this shows, however, is that our financial decisions should remain aligned with these values. “Independence” seems the most likely to be jeopardized. This is why the suggestion of government intervention continues to be, in my opinion, a terrible suggestion and one I hope never comes to fruition. If the “media elite” are already accused of being biased (left or right), just imagine what would happen if there were given direct government subsidies. Actually, look at what people say about PBS and NPR. Both are fine news organizations that are dinged for real or perceived political bias.

The first order of business is to determine what it would cost to start Project Goldfish. Then, what would it cost to maintain the business on an ongoing basis? Only after I’ve answered those two questions can I tackle the equation that will keep Project Goldfish online.