UPDATED: Open thread: What did you think?
So the first Chicago Media Future event is over, but we’re already looking forward to the next event. We’ve got some ideas about this - smaller, more focused, more one-on-one conversation - but we want to hear from you first.
After you’ve checked in with the live-blog and the #cmfc conversation, tell us: What did you like about today’s event? What didn’t you like? What kinds of topics should we explore in the future? How would you change the format? How much did you like the candy? Let us know. And if you’d like to help us with future events e-mail us at info {at} chicagomediafuture(.)org.
(We’ll post our list of thank yous to everyone who helped us tomorrow.)
Reactions to the Chicago Media Future Conference (updated as needed):
ChicagoItaliano (1,2)
“Lou Grant” at Chi-Town Daily News
Athenae at First Draft
Mike Doyle at Chicago Carless
Matt Wood at The Negotiation Limerick File
Whet Moser at Chicagoland
RyanBlitstein.com
Windy Citizen comment thread
CivicMediaUSA (Updated from pre-conference post)
Driftglass
Mike Doyle at Chicagosphere
Chicago Tech News
Michael Miner in the Chicago Reader
Romenseko
Rhetorica
Kris Vire at Storefront Rebellion
Vouchification
3 comments
I must say, I completely disagree with all the flack being thrown at Patrick Spain. I think it’s an unfair view of what he had to say.
Yes, he made some doomsday predictions about the future in a totally certain way that was unwarranted. He also failed to distinguish between the page views necessary for an advertising supported model vs. other models. Yes he was a CEO rigorously “on message”.
But whose fault is that? Spain was the only person at that place who had a business model. That is, he started his site with the idea of how to make money, and an idea of the economics of his business and what we would have to drive operationally to achieve that. In short, he seemed to be the main businessman on the panel. He clearly had researched and thought a lot about the economics of the online advertising market.
I didn’t start a blog to make money. Andrew Huff didn’t start GapersBlock to make money. I don’t think Steve Rhodes started Beachwood Reporter with a firm idea of how to make money. We started those sites to fill a perceived need in the market and to deliver first and foremost valuable content. The economic model was always secondary or non-existent.
I get the impression Flora went into business with the idea that it would be a business, but he radically changed his business after it began. I’m very happy to hear that he’s close to getting WindyCitizen to be a self-sustaining enterprise. That’s awesome news.
But can you run more than a one man or skeleton crew shop based purely on ad dollars in a local market? Spain would say no and I tend to agree with him. Windy Citizen doesn’t scale very big unless Brad expands it to other cities.
Will Spain make money? It remains to be seen. Consider this: HuffPo draws 21 million uniques per month - and loses money:
http://www.observer.com/2009/media/new-huffpo-ceo-hippeau-wants-grow
My biggest beef with Spain is that there doesn’t seem to be any way to contact him. I wouldn’t mind learning more about the Newser model. It strikes me that he must have huge operational leverage such that once he hits cash flow positive, that business starts spinning off major profits. He’s probably only got a limited window to cash in. I find it hard to believe that somebody would be a big multiple for that site, given the uncertainty of the durability of the aggregator/SEO model. Future cash flows would have to be hugely discounts. Plus his content sources are going away according to Spain himself. He’s definitely taking on a risk with this venture and I think he knows it. Good luck to him.
I don’t understand why business models are such a mystery. I named several there - and indeed I started Beachwood with a very firm idea of how to make money. The problem is that access to capital is difficult when the likes of Patrick Spain are sucking up the dollars. Each of the success stories I named has a model that works: Rich Miller’s sub/adv hybrid; MLBTradeRumors’ niche; Pitchfork’s niche/brand/scope; Gawker Media’s stable of sites, which is the model I’m pursuing; Real Clear Politics as a “smart aggregator”; and why isn’t foundation funding a model? ProPublica, people. Politico is a niche and hybrid print/digital product. Why does Spain discount Wash Po Co. because so much of its revenue comes from Kaplan? That’s not a model? The models are staring us in the face.
Steve, thanks for the comments.
Patrick Spain is getting money because he successfully started and sold multiple previous businesses. Once you’ve had a win in the past, it is much easier to raise funds. Plus he no doubt has extensive financial contacts because of this. The fact that he raised an additional $2.5 million tells me he still plans to burn through lots of money before turning a profit.
It is also easier to raise outside funding when you have the prospect of large profits. The fact that there may never be another billion dollar media company in the new world doesn’t make me sad at all. (I also completely agree that the biggest problem with old newspaper companies has been bad management and excessive leverage). But when you have lots of zeroes, it is easier to raise funds.
Raising funds generally requires a formal, written business plan with pro-forma financials and projected metrics combined with a basic premise and management team funders like. Even then it is a crap shoot unless you’ve had a successful exit before. I’ve got a buddy going through it right now and it is tough.
Believe me, I don’t agree with everything Spain said. And his style was quite off putting. But I do believe that most online content sites were not started with a firm economic model in the Spain sense in mind. It sounds like Beachwood Reporter was, so I stand corrected on that point.