Newsonomics: The steep hill of scale

A couple of years ago, after trying and failing at a free ad-supported business model and flirting with pay walls that brought in negligible revenue, a number of news publishers started to come around to the idea of scale. When it comes to monetizing an audience, it’s go big or go home.

And there is certainly a lot to be said for scale, since it appears to be the only way of making any real money selling journalism online. Big players like BuzzFeed, HuffPost, an Business Insider, even medium sized ones like Gawker, all make money by funneling colossal amounts of traffic into a hopper. Out the other end squeezes a non-colossal amount of revenue, which is used to pay for a handful of journalists.

It’s not a great business model, but it is pretty much the only one on offer right now. Which is why Postmedia — as it prepares to downsize yet again — appears to be moving into the digital-scale business.… Continue reading