Came across an interesting AP article in The Seattle Times this week (via Mediagazer), about an Associated Press Managing Editors meeting where the media managers said they have a chance to boost revenue with mobile news, after missing out on opportunities to monetize internet news coverage.
Granted, this article seemed quite newspaper-based (did the quote, “Newspapers aren’t dead” give it away?) but the push to find better ways to monetize news is nothing new for any of us, and I believe it is a major–if not the main–reason for the push toward hiring more and more one-man-band reporters in local TV news. But hey, also mentioned in article is the fact that the APME board voted to change its name to the Associated Press Media Editors, “to better reflect the organization’s varied membership, which includes broadcasters as well as college students and professors.” So way to go broadcasters! We’re apparently real journalists now!
But anyway, more on money. In my graduate program at Northwestern, they made us take one business-focused class. Most of us couldn’t stand the course, were often bored to tears, but believe it or not–I learned quite a bit from it. We learned that more and more news consumers are turning to the web for content, and that the possibilities for where to find news are endless–making your audience more spread out and less likely to pay any attention to your advertisers. And for anyone in any area of media, you know the advertisers practically sign your pay check.
Is this the future of our paychecks? (Courtesy: Brooks Elliott, flickr.com)
So this article claims, despite the fact that we couldn’t corral this audience on the big, bad internet, our mobile news platforms are the grand opportunity we’ve been waiting for: “[AP President and CEO Tom] Curley said the AP will announce in the coming weeks partnerships with dozens of newspapers to bring mobile advertising content to mobile devices. He assured the news executives that the mobile news delivery will be profitable.”
I’m glad these news executives were “assured.” You can almost hear the quivering confidence in their voices: “Kate Marymont, Gannett Co. vice president for news, said newspapers should sharpen their focus on what they do best, and outsource cheaply produced ‘commodity information’ such as sports scores and weather.”
But let me tell you a big secret. One that your bosses probably haven’t let you in on. Come closer…
The news companies are still making profits. Big ones.
According to the New York Times Business section, our friends at Gannett Company, Inc. are making a 10.47 percent profit margin. What can we compare that to? Well, Exxon Mobil, the most profitable company in the United States last year, only had a profit margin of 8.84 percent.
Quick economics lesson: Profit margin tells us how much money a company actually keeps in earnings compared to its total revenue. Gannett took in a hefty $5.4 billion in the last 12 months (again, according to NYT), so that means the company’s earnings were more than $565 million. Still feel bad for them?
Here’s a few more: Sinclair Broadcast Group, with a 10.38 percent profit margin on $778.1 million in earnings; Belo Corporation with a 9.83 percent profit margin on $687.9 million in earnings; Gray Television Inc. with a 7.76 percent profit margin on $345.9 million in earnings; LIN TV Corp, with a 7.52 percent profit margin on $425.5 million in earnings; Fisher Communications Inc. with a 7.55 percent profit margin on $177.7 million in earnings.
Now I’m not doing the books for any of these companies, and I fully understand that the financial picture for a company is a little more complex than this. My point is simply: Media companies are making money. If we go back to that wonderful graduate media business class I took, we learned that the problem for media execs today is that they’re not making the 30+ percent profit margins that they made back in the day (you know, when the “Big Three” were all you could watch on TV and it was almost unheard of not to eat breakfast over the morning paper?). Back then, getting into news was like robbing a bank. Today, not so much; we have to fight for our profits like everyone else. Unfortunately, those of us looking to find or hold onto a job in this industry are the ones who are paying the price.
So let’s raise a glass to the mobile news plan. Maybe this will lead to a raise.
Through the lens 