New media business models: How to make $2K on $5m in revenues

Business Insider revealed its finances...the stark reality of the digital media business model.
Written by Tom Foremski, Contributor

Business Insider, the popular news site founded by former Wall Street analyst Henry Blodget, this week revealed its finances.

We only did only $5 million of revenue last year ($4.8 million, to be precise, of which most came from advertising). And, yes, $5 million of revenue is pretty puny in general. It's less than a single big network news anchor gets paid in a single year, for example.

But $5 million of revenue is a lot more revenue than we did three years ago ($39,495)...

And did I mention that we were also profitable last year?


Not WILDLY profitable, mind you. In fact, the sum total of our year's worth of effort would barely--just barely--buy us a MacBook Pro: We made $2,127 in 2010.

Business Insider has nearly 8 million readers per month, which means that each reader is worth just 62 cents per year in revenues. And to get all those readers Business Insider has to run a lot of erotic content that has nothing to do with business, such as "Carnival: Photos of carnivals in Brazil, Italy, Germany."

This is the economic reality of today's online media businesses and it is the reason why old media is in the state it is today and can't transition its business model to the new.

My favorite Yankee saying, "You can't get there from here," perfectly describes the situation facing old media.

Here is a Pearltree on New Media Business Models: http://pear.ly/kAb9

Editorial standards