MULTIMEDIA BUSINESS CASE
STUDY
CONVERGENCE CAPSTONE
FALL 2009
Jacqueline Brixey
Eric Durban
GOALS
•
To advance the search for new business models that will support quality journalism in today’s digital
culture
•
To find multimedia companies that have an innovative or controversial business model and are at or near
profitability
•
To analyze companies in order to understand their models, get hard financial data around their models,
and figure out what makes their models successful
•
To produce multimedia case studies that can be used in business or journalism schools to teach media
innovators the facts, outcomes and key success factors of these business models
BUSINESS CASE STUDY - defined
• A business case study looks intensely at a
company to provide detailed information on
how the company operates and generates
revenue. This includes knowing specific
numbers, company and industry history,
competition, target audience, as well as the
major decisions and metabolism of a
company.
BUSINESS CASE STUDY - purpose
• Journalism is struggling to make profits in
today’s business world
• Analyze currently profitable media companies
to suggest a new business model for
journalism
METHODOLOGY
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•
•
•
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Company scans
Researching one company per person
Detailed history
Interviews
Concluding lessons
COMPANY SCANS
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•
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Slate.com
Red Hat
Financial Times
BlogHer
CNet
eHarmony
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•
•
•
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Care2
Current TV
Angie’s List
Consumer Reports
Politico
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•
•
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Profit 3 years after launch
Broke into the D.C. political journalism market
Paper based ad-revenue
No major subscription model
POLITICO – political news landscape
• Editorial competitors
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–
–
–
–
–
Washington Post
New York Times
Wall Street Journal
Fox News
CNN
MSNBC
• Financial competitors
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–
–
–
National Journal
The Hill
Roll Call
Congressional Quarterly
• Online competitors
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–
–
–
Allpoliticsnow.com
Huffingtonpost.com
Drudgereport.com
RealClearPolitics.com
POLITICO – brief history
POLITICO – the dream team
POLITICO--marketing
• Allbritton Communications Co.
– synergy
• Features on other news networks
POLITICO--readership growth
Number of unique viewers (comScore ratings)
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
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7
N
ov
-0
7
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8
M
ay
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8
Ju
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8
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ov
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8
Ja
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M
ar
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ay
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2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
POLITICO – election coverage
• Readership
growth
• Crises
– Ben Smith
– Post election?
POLITICO – post election decisions
• Plans:
– Ad network
– Non-election
year advocacy
advertising
– “44”
– Print more, hire
more
POLITICO--ad-share network revenue division
POLITICO – the business model
Before (launch-Sep 2008)
• Free paper
• Online
advertising
• Marketing
After (Oct 2008-present)
• Before +
– Ad-share network
– Non-election year
advocacy advertising
– More paper editions
– New hires
–“44”
POLITICO--possible numbers (print)
Day
Number of ads
Average Daily Total
Monday
5
$55,039.48
Tuesday
27
$259,308.80
Wednesday
26
Thursday
21
$246,594.20
$202,042.93
Friday
unknown
$50,000
Weekly Total during $1,085,849.90
Congressional
meeting week
POLITICO--possible numbers (print)
Assumptions
Totals
If 36 weeks of 5 times weekly
(Congress in session)
=weekly total *36
$39,090,596.52
If 16 weeks of 1 time weekly
(Congress not in session)
=weekly total * 16
$880,631.60
Yearly total
$39,971,228.12
POLITICO --realizations
– Niche market
– Advertising based model
• Counter-cyclical advocacy advertisements
• Wealthy advertising base
– Marketing
– Readership following
POLITICO – the case study
• No specific numbers
• Applicability?
– Online
– Paper
– Basic principles
– Marketing
– Strategic hires
POLITICO - lessons
•
•
•
•
Founded in 1995
Primarily a call-in service before the Internet
Subscription and advertising revenue
Still print a monthly magazine in larger
markets
• http://www.youtube.com/watch?v=5x2AElSFP8 - watch-main-area
Angie’s List – consumer review landscape
• “We were in the review business before there
was a review business.” (Hicks)
• With the explosion of the internet, many new
rival companies came onto the scene,
including: ServiceMagic, Yelp and Kudzu
• Creates competition and conflict
Angie’s List – consumer review landscape
Angie’s List – humble beginnings
• Going door-to-door to build the company
initially
• Build trust and accountability from the
beginning
Angie’s List – market growth
Angie’s List – member growth
Angie’s List – the business model
• Consumers pay a
• Trust and integrity
subscription fee for
user-generated
content and editorial
content
• Free vs. subscription
• Includes ads that
benefit the consumer
Angie’s List – decision point
• In 2008, Angie’s List added doctor ratings to its
service, possibly leading to bigger change
• Over 75% of members polled wanted to rate
doctors and health care providers
• Opens the List up to national ratings, not just
hyper-local
• Plans to offer the service independent of the
rest of the List
Angie’s List – journalist principles
Angie’s List – the case study
• Angie’s List business model can work for
journalism because it’s built off trust and
integrity, two cores of true journalism
• Years back, people trusted the news like they
trust Angie’s List now
• Revenues of $46 million in 2009, can profit
without further growth
• “We can play in the free market if we need
to.” (Hicks)
• Applicability
Angie’s List - lessons
Challenges
• What is a business model?
• Where can I find any of this information?
– esp. private businesses
• What does this information even mean?
• How can I apply this business model to other
businesses?
Questions?