9
Business Models for Online Journalism

Since the early days of online publishing, making a profit from content sites has proven elusive (with the exception of adult-oriented sites). Even without the costs of distribution, e-zines, online newspapers, and online broadcasters have struggled to find the road to profitability. Gradually, that's beginning to change.1 Claiming profitability or at least being at the break-even point by 1998 were a diverse range of sites including not just niche sites but mainstream news providers, such as the timesunion.com (an online spin-off from the Albany, N.Y., Times Union newspaper), Channel 4000 (the first television station site to register a profit), and the Motley Fool (an Internet-original site covering the financial markets), whose CFO Gary Hill responds to the question “Has your site made a profit?” by saying in true Fool form, “We have and haven't and have.”2

Of course, some of the profitability that is beginning to emerge is a result of creative accounting. In some cases, for example, reporters are occasionally borrowed from a parent news operation, and although they may be paid for their online reports, some related costs are not included, such as the complete overhead related to keeping those employees on staff. A radio station may not charge its online operation for overhead but only for the cost of a Web master and sales representative. As Peter M. Zollman points out, “What are profits, anyway? Are they return on investment (ROI)? Are they return on equity (ROE)? Or does 'profitable' mean just 'more money came in than went out'?”3 The Tribune Company views its online enterprises as an investment and does not expect a near-term profit. Meanwhile, Thomson

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