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The Improbability of Online Profits

August 4th, 2008 | 2 min read

By Matthew Lee Anderson

For non-tech content providers, at least.

Ezra Klein:

The success of Politico actually seems like an incredibly discouraging sign for the media. Here you have this forward-thinking, primarily virtual venture to create a political news organization that marries old-school reporting values to the speed and the immediacy of the web and it actually works. A year-and-a-half after launch, it's getting 3.5 million unique visitors per month and 25 million page views. And yet not only is it unprofitable, but 60 percent of its revenues come from advertising in the 27,000 circulation print version. In other words: Politico got the online readership it dreamed of, but it hasn't come even close to figuring out how to monetize it. So they're reliant on the Congress-section of their print paper, which can extract huge rates from lobbying organizations and pressure groups. Were they actually web only, they'd be losing catastrophic amounts of money. If The Politico was an experiment to see if people would read more stuff about politics, it was a success. But insofar as it sought a new business model that would bring economic viability to online reportage, it's as adrift as everyone else.

Klein's point is really not surprising.  Numerous online successes have failed to translate to real world profits.

The Huffington Post, which has become the dominant lefty news outlet on the web, only became profitable recently, even though it isn't paying its writers.  The NY Times tried to charge for content, but was forced to open up the archives.

Then there are the tv and movie marketing attempts.  Quarterlife, which admittedly didn't do very well on the web, was a historic failure when it hit the silver screen and Snakes on a Plane, which was an internet sensation, failed to make a significant showing at the box office.

It's not impossible for content providers to make money online.  But such stories should be a cautionary tale for those with content who are looking to the web to distribute it--you're probably better off giving it away and keeping your day job.

Matthew Lee Anderson

Matthew Lee Anderson is the Founder and Lead Writer of Mere Orthodoxy. He is the author of Earthen Vessels: Why Our Bodies Matter to our Faith and The End of Our Exploring: A Book about Questioning and the Confidence of Faith. Follow him on Twitter or on Facebook.