New sites struggle to make a buck
The dominance of Google ads is hurting the ability of online news publications to stay profitable.
According to a report from Oxford University, many news publications are struggling due to grab a stake in growing ad revenues in Europe.
This means many publications are barely able to cover costs.
For many many startups, just keeping their heads above water for more than a few years is a success in itself it is said.
Looking at nine case studies in Germany, France and Italy, only two of the startups looked at broke even. These were French investigative journal MediaPart, set up by a former Le Monde editor in chief, and German online magazine Perlentaucher.
Others have struggled and the report says that while many start ups are “inspiring in journal idealism and impressive in their technical ingenuity”, they are struggling with adequate business models.
According to the report’s author, Dr Rasmus Kleis Nielsen, while it is generally thought that ‘old media’ struggles to get online journalism – something the Daily Mail has shown to be not entirely true for example – it is often the case that new media enterprises are not having it easy either.
Part of the reason is that ‘old media’ titles continue to dominate the online news market in many cases, though the Huffington Post and others are notable exceptions.
But bottom lines are also being hurt by difficulty in grabbing a slice of online advertising from giants like Google. Apparently this is undermining the ability of small and medium sized publications to generate large amounts of revenue.