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Capital flows like water to media companies (of a certain kind)

December has started with a bang-up ten days financially for some leading American media companies.

Vox announced it has raised another $46.5 million in a new round of venture capital bringing its total valuation to $385 million. CEO Jim Bankoff, in a internal memo he made public, announced ambitious expansion plans for 2015.

Outbrain, a content recommendation/native advertising company, indicated it is tentatively planing an initial public offering early next year, with a target valuation of $1 billion.  (Outbrain, like its biggest competitor Taboola, is Israeli in origin but has moved headquarters to New York and plans to be listed on NASDAQ).

Meanwhile expanding Buzzfeed’s growth continues and its investor valuation stands at $850 million.  Editor Ben Smith was lecturing in Australia late last week as the site announced it has hired a star from Wired to be its Silicon Valley bureau chief and is forming a health and science desk. Read more

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Time-Picayune reporter Ramon Vargas, left, pats the back of movie critic Mike Scott as they walk into the newspaper's offices after learning learning their fate by the company in New Orleans, Tuesday, June 12, 2012. The Times-Picayune is laying off 200 employees as one of the nation's oldest daily newspapers prepares to print just three days a week. The layoffs amount to about half of the newsroom's 169 employees. Advertising, circulation and other departments also were affected at the 175-year-old newspaper. (AP Photo/Gerald Herbert)

Cutting print is a money-loser for Times-Picayune, but cutting staff makes changes slightly profitable

The events of the last two weeks show that Times-Picayune readers and employees are fighting-mad at absentee owner Advance Publications for deciding to eliminate their print newspaper four days a week.

Management’s reply, as articulated by Times-Picayune Editor Jim Amoss, has been, sorry, but “we can’t sustain the old business model in the face of irreversible print advertising and readership trends.” That was echoed by Ricky Mathews, president of NOLA Media Group, who wrote Sunday, “Before we faced economic doomsday, we decided to build a new model, a combination of print and online that gives us a chance to achieve a sustainable business and content model.”

So does that mean the savings clearly outweigh the losses in this transition to digital? My math suggests not necessarily, and not right away.

Cutting back on print will cost revenue, too

Let’s assume that the cost of paper, printing and delivery is about 35 percent of The Times-Picayune’s costs (the industry standard). Read more

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Gannett to expand paywalls across more properties

Gannett Blog
Gannett CEO Gracia Martore didn’t say if the plan will apply to all of the company’s sites, writes Jim Hopkins, who predicts that the company’s “paywall model will be closely watched across the industry because it’s the nation’s No. 1 newspaper publisher. It proceeds cautiously in new initiatives, so a move toward companywide paywalls would be a strong signal that such a strategy is worth pursuing.” || Related: McClatchy, Gannett say ad revenue improved in November (Poynter.org) || Earlier: Pay walls debut at three Gannett papers testing ‘journalism as a service’ (Poynter.org) Read more

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