Events

Last night I attended "Innovation in Media: Global Meets Digital" at the Levin Institute. Marc Frons from the NYtimes; Betsy Morgan of HuffPo, Geoffrey Sands with Mckinsey, and Tom Phillips of Google sat on the hot seats and answered questions posed by MC Garrick Utley and the audience. The general discussion centered on a short list of key issues that the media industry is currently facing, namely: What does the future of the media industry look like? How does/will anyone make money? Will New York City survive as the media center of the universe?

Mr. Utley started the discussion off by asking the panel what works in the modern media business? Or, does “nobody know nothing?"

Mr. Sands explained that the deterministic 5-year plans that Mckinsey used to create for clients no longer work, because everything now changes too fast. He suggests that companies create a portfolio of initiatives and quickly shut down the initiatives that do not succeed. He also pointed to the explosion of independent artists creating music, films, etc., and innovations in advertising from mobile to behavioral targeting as evidence that things are not all doom and gloom.

Picking up on the innovation, expansion, and optimism note Ms. Morgan pointed out that HuffPo has doubled its staff in the past year to nearly 60 people. Their newsroom in NYC manages about 10,000 bloggers generating 300 posts per day. Nearly all of the editorial staff is under 30 and many are under 25 years old.

So how does HuffPo make the money and stay financially viable in these tough times? It’s the classic model, ad sales pay for operations. There are no plans to change this. It also helps that none of the bloggers are paid. According to Ms. Morgan, bloggers are mainly writing opinion pieces and accrue other benefits from blogging, which make up for the non-existent paychecks.

This makes sense, trying to make money from blogging is not easy, kind of a stupid idea, but getting those published articles on a known site like HuffPo will often bring the notoriety that leads to big money, at least enough to buy a coffee! Also helping the bottom line are the young editors, who are paid “competitive”, read small, salaries.