Business Insider announces results – shows small(er) news companies are the future

By March 9, 2011News

Henry Blodget’s Business Insider network of news blogs revealed yesterday that their 2010 revenues were $4.8m and they made a small profit.  Their revenues came from advertising on their sites and a conference that they ran.  Most were from advertising.

I’ve been saying for a long time that their model of free news supported by ads and conferences/other brand extensions is the way forward for news in the digital age and it is great to see another company making it work.  There is a lot of handwringing from traditional newspaper businesses who are losing money and don’t want to embrace/can’t embrace a future where content is free and their businesses need to be much smaller, but that shouldn’t obscure the fact that companies like Business Insider are delivering a high quality news product and making the economics work.

As well as announcing his results Henry cited a couple of other digital news businesses that are making the model work, from a revenue perspective at least:

  • Huffington Post revenues were $30m in 2010, projecting $50m this year
  • Gawker Media is a ‘nicely profitable’ $25m turnover business with aspirations to get to $100m
  • New York Times digital business is turning over c$150m, which wouldn’t support their $200m newsroom, but could still support a substantial news operation (Business Insider employs 48 people and is break even at an average revenue per head of $100k)

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  • Its great to see a digital news network growing nicely!

  • Hi Nic, I can see how the business model works for startups who were built specifically for ‘online only’ distribution, however I struggle to see how it will work for traditional newspapers that have reluctantly bolted on websites. The Times have been pretty quiet of late re subscription data and I feel the New York Times is an outlier and not typical of the industry. I suspect advertising rate cards are continuing to fall for news sites given low click through rates (and the fact Google is so powerful in matching search intent with relevancy). It will also be interesting to see how the EU directive on cookies (as reported on the BBC March 8th ‘New net rules set to make cookies crumble’) will affect matters as cookies were being used by some news sites to ensure better contextual adverts based on user behaviour on other sites. I for one could not tell you the last time I clicked on an advert on a news site and as an occasional media buyer would not consider buying ad space on such sites. thanks Alan

  • Hi Alan – I think the traditional news businesses are in a lot of trouble. I haven’t seen the stuff on EU cookies and so can’t comment, but if targeting goes by the wayside it will be bad news for all of us.

    Remember also that display ads have brand value and that a lot of companies are making them work on a CPC basis.

  • Anonymous

    As a guy who loves media startups, I really hate to rain on the digital parade here, but this headline conclusion is a load of total crap. Business Insider does some excellent work, but the few references to others as models of “news” are absurd. For one thing, tabloid journalism has always been more profitable than in-depth analytical journalism. You absolutely cannot put HuffPo next to WaPo and declare that the future of “news” is somehow reflected in their profit margins. And comparing snarky blogs at Gawker to the New York Times newsroom in the same bullet points is just laughable. The future of clever headlines with little investigation and lots of opinion is absolutely present in these stats, but unfortunately that reflects a lowest common denominator effort to get clicks and eyeballs, not a triumph of small news organizations that check their facts and earn trust beyond their opinionated echo chambers.

    After 15 years of new media development all of us in the industry are far too comfortable congratulating each other on our work instead of taking a good hard look at where the industry is hurting. Yes, traditional media suffers from the cost of pulp and ink, but they also bear the cost of properly paying experienced investigative reporters, while new media is flooded with snarky hacks who write clever headlines and crank out sticky click-bait for advertisers. These two practices are not the same, and if new media professionals really want to revolutionize news, then we all need to be pushing the industry to come up with more than a tabloid business model.

  • TechCrunch and Business Insider do a good job of investigative journalism in their areas. There is a legitimate question about how this will extend to other areas where investigation is more expensive, but I’m increasingly confident that can be solved.