A couple of interesting tidbits come out of Daniel Lyons' Newsweek piece on Arianna Huffington. Most interesting is the fact that for all Huffington's supposed digital age savvy, her HuffingtonPost site is having the same problem every other news website is having - namely, figuring out how to monetize content (in plain English, how to make money).
Lyons writes:
HuffPo has a big audience, but like most Web sites, it can't monetize it very well. Right now, HuffPo generates just over $1 per reader per year. That's nothing compared with the mainstream-media outlets that HuffPo hopes to displace. Cable-TV networks and print newspapers collect hundreds of dollars per year from each subscriber, and then generate hundreds of millions in ad revenue on top of that.
Lyons points out that online advertising revenue - which new media types like Huffington once believed would pay the bills in a brave new world in which all information would be free - has fallen far short of expectations. Lyons writes that online ad spending will grow more than 10 percent per year over the next few years, approaching $100 billion by 2014. Sounds impressive, but that represents just 17 percent of all ad spending.
Lyons quotes Vanity Fair columnist Michael Wolff, who also runs the news-aggregation website Newser:
"Maybe it's time that someone says the unsayable--that online advertising just doesn't work. A website turns out to be a not very good advertising vehicle," says Wolff, adding that online ad rates have been dropping for a decade.
This from a guy who runs an ad-supported site. Charging for online content suddenly doesn't sound so crazy after all.
The other item of note in Lyons' piece is this factoid: Fully 40 percent of what HuffPo runs is aggregated, meaning it's taken from other sites. So nearly half their content is lifted from other sites and they still have trouble making money? Interesting.
Arianna Huffington photo courtesy Getty Images
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