If you would like to make a fortune producing news, here's our advice, based on Pew Research's new survey of the industry: one, start Fox News and not Time, and, two, understand that you will not make a fortune producing news.
For the past 11 years, Pew Research's Journalism Project has produced an overview of the state of news media. This year's edition (providing an overview of 2013) is actually more optimistic than last year's, in part because of the injection of "a level of energy to the news industry not seen for a long time" — energy from new startups and new expansions. But optimism is forward-looking. The details of what's working at what isn't in existing news organizations look very similar to what was seen in 2012.
So, let's say that you are setting out to become a media mogul, a new William Randolph Hearst who buys the world's treasures and builds needlessly complex mansions in the hills along the California Coast. Here is our advice on how to do that.
Start a very, very popular, polarizing cable news network.
That probably sounds easier than it actually is. But there's no question that Fox News (which is what was being referred to, in case that wasn't clear) continues to stand out as being particularly profitable. Viewership of Fox News, MSNBC, and CNN continued to droop from highs seen a few years ago, but not significantly. And Fox still has twice the audience of its two competitors.
The big story, though, is the one depicted at right. Fox News has made twice as much in revenue as its competitors and, while MSNBC and CNN's revenues have been relatively flat, Fox News' continues to climb, hitting nearly $2 billion in 2012.
If you were thinking, by the way, that maybe you'd start small, building up a local station that could become a national cable juggernaut, you might be getting ahead of yourself. For one thing, there are very few examples of local news stations that only do news. (NY1 in New York being an exception.) Which means you'd need a lot of other content besides news, none of which is as cheap or lucrative. (Some 48.6 percent of ad revenue for local stations came from news in 2012.) And while local news audiences are increasing — as are national broadcast news viewerships — many local stations don't actually produce their own news (only about 75 percent did in 2013). You've also missed a major consolidation that occurred in 2013, meaning that your chance to cash in from an acquisition also isn't high.
Or, at least, launch something digital.
There's an alternative, if starting Fox News Two isn't in your sights. You could also start a "website," perhaps one that conveys news to an audience. (Please do not do this either, because this is what The Wire does.) Pew notes that digital media saw rapid growth in 2013, with BuzzFeed and Gawker adding more than 100 new editorial staffers and Vice News somehow topping 1,000 editorial employees. (That is a lot.) Of course, lots of employees doesn't mean lots of profits.
One growth area here is video: little of the overhead of Fox News, few of the constraints of local. "Ad revenue tied to digital videos over all," Pew reports, "grew 44% from 2012 to 2013 and is expected to continue to increase." And when we talk about making money from news (which is what we're talking about), we're usually talking about ads. Like those native ads, that are paid for by sponsors and look like regular stories on the site. (Our parent company, Atlantic Media, does this, as you probably know.) Pew sort of shrugs at those ads; they're trendy. ("[T]here is little if any public data that speak to consumer response one way or the other," it says.)
Also trendy: having a rich person subsidize your new venture, as did eBay founder Pierre Omidyar with his First Look initiative. But, then, if you were a rich person, you wouldn't be reading this article.
Perhaps it goes without saying: do not start a print venture. Magazine sales at the newsstand generally keep dropping, as do ad pages in the magazines. Newspaper circulation was up slightly in 2013! But, then, it would be hard for it to keep dropping.
Target the Hispanic community.
Half of the nation's population growth between 2000 and 2012 was among the Hispanic community, Pew notes, outlining a number of the new ventures targeting that population specifically. That trend will likely continue.
Don't worry about Facebook.
Pew also makes a point about Facebook: People find articles there, but usually not through news organizations. "[D]espite evidence of news consumption by Facebook users — half of whom report getting news across at least six topic areas — recent Pew Research data finds these consumers to have rather low levels of engagement with news sites," the report reads. What's more, if you're looking to game Facebook to spur traffic, the site holds those reins tightly and it might not work as you expect.
Oh, and: Don't try and make money.
Even if you start out as a rich guy, like Omidyar, you won't be making money on the news. (Pew: "First Look Media founder and funder Pierre Omidyar has acknowledged that solvency is at least five years away.") If you really want to make some money, you might try something non-news based. Like a Ponzi scheme.