The economics of Breaking News

Every website that provide news are in the business of dumping the most articles possible in a day. The big problem is that each click's value (CPM - cost per thousand) is diminishing because there is no scarcity. In a world where AdSense is king, publishers are screwed.

They live by the click and if they don't change.. they will die by it.

Where is the value?

If you are Buzzfeed, you have enough traffic to generate profit. Selling 90% of junk.. but since people continue to visit they know exactly what to post. They know what they are.

But you shouldn't make a business decision rule by the exception. When other sites try to copy-cat, what they will probably end up, is alienating its users. Those sites start publishing great articles but with time you can see the volume of articles increasing but its quality decreasing. They started chasing clicks.

With very few exceptions, the value is in the people writing and not the brand publishing.

Four different examples to learn from

Daring Fireball, from John Gruber is the meca for every Apple enthusiast - no I'm not saying the F-word. Everyone can read his analysis, his papercuts, everything for free. How does it make money? Each week, the site will have one sponsor that will pay $5000 for the spot. Here is the scarcity, one spot a week. He started at $500 back in the days and never had a off week.

Stratechery, from Ben Thompson. He writes a Daily Update, with his thoughts on what's happening in the world of tech, that you can get for $10/month. He doesn't need to have every person on earth to read his site, but every venture capitalist in Silicon Valley will gladly pay his fee.

No Agenda, with Adam Curry and John C Dvorak is a podcast where they deconstruct the news. You may call them crackpots and buzzkill but their book of predictions is pretty damn accurate. They, for example, don't have any sponsor because they don't want the listeners to feel that they are the product. So the listeners support them. Some will send $1000 to be knights.

Bill Simmons. The man has an opinion. He is a celtic fan. "Don't get fired" was always an inner joke, but when he spoke about the NFL problems, ESPN didn't like it. To Bill it was time to go, now on HBO he will continue his breakdowns, his rants. In sport's media where opinion makers hide their believes, he exposes them and was rewarded for it with millions of followers because he stayed true to himself.

Stop selling breaking news, start selling analysis.

Some publications and individuals saw the problem and tackled it. How? Creating scarcity. Everyone can repost the same press-release but what matters is the opinion of whom we trust. That is your scarcity, your opinion. Of course, the problem is having an audience, but that is something you will have to work for.