In Fortune, even Web publishers that say they're profitable don't share revenues
Fortune | The Atlantic Wire | The New Yorker | TechCrunch | Fast Company
JP Mangalindan looks at the financial health of Web publishers like The Huffington Post, Gawker Media and BuzzFeed. But of the seven companies listed, the piece includes revenue from only one: $12 million at Business Insider last year, a figure that comes not from the company but from a New Yorker profile of BI editor Henry Blodget.
Nailing down just how well each company was doing was a challenge from the beginning, Mangalindan told Poynter.
"The vast majority of these companies are private, and as such, aren't obligated to break down or disclose their earnings, even when asked," he wrote in an email. "In the case of HuffPost, it's owned by AOL, a publicly-traded company, however they do not disclose HuffPost's exact revenues and profits in their financial statements."
Business Insider had a small profit in the first quarter this year, though Blodget did not reveal how much, Fortune adds. The Awl and Gawker were the only other sites confirmed as turning a profit. Everyone else was listed as expected to turn a profit this year or later, except for BuzzFeed, which had no analysis listed, and The Huffington Post, which Fortune says hasn't been profitable since being acquired by AOL in 2011.
In fact, TechCrunch's Anthony Ha writes that Say Media, the owner of sites like Remodelista, Gear Patrol and Honestly...WTF, is expected to reach profitability later this year. The company announced Thursday it laid off 10 percent of its 400-person staff "as part of Say’s transformation from an ad network to 'a digital media company.'"
Publishers may want to look into one related effort to increase readership rates (and perhaps ad revenues as a result) by Fast Company, which experimented with what Chris Dannen calls "stubs." The model, in which stories are posted and then updated as the story unfolds instead of several smaller items about the same subject, leads to a lower "bounce rate" and an increase in the amount of time readers stay with the site. What that means for web publishing is still up for debate, however, Dannen says.
Big-time disclaimer here -- it's too early to tell how permanent these effects will be, and we can't know for sure that the changes are attributable to these stub articles. But we've racked our brains to think of other factors at work here -- some big boost in inbound links? Some external event? A technical change? But after about a month, we've seen these changes stabilize, and we haven't been able to isolate any other contributing factors. We're not saying this is causation, because there's no way to be sure. But it sure as hell looks like it's working.
Mangalindan told Poynter he thinks online publishing "is still maturing." While there are a number of companies either already profitable or well on their way to establishing themselves, plenty of other players are still figuring out how to produce quality content and then find ways to monetize it, he said.
"I'm confident Web publishing will sort itself out, and healthy profitability is possible, but a number of companies will have to look beyond online advertising and experiment with other potential revenue streams," he said.