REPORT

should still be valued for their initiative and experience even when some of
their ventures do not succeed). 15
Looking specifically at some of the most highly visible digital
journalism start-­‐‐ups launched in the United States, it is clear that, even when
launched in a favourable environment characterised by rapid growth in both
internet use and digital advertising, start-­‐‐ups need both money and time
before they break even, let alone begin to make a profit. Take-­‐‐off, to use the
Silicon Valley jargon, often requires a long and potentially expensive runway.
The Huffington Post was launched in 2005 and reported its first profit in 2010.
After it was bought by AOL in 2011, millions more was invested in expanding
the site’s global reach, and the site only reported a profit again in 2015.
BuzzFeed, launched in 2006, reported its first annual profit in 2013. Politico,
launched in 2007, announced its first profit in 2011. All of these sites have
pursued a path of ‘users first, profits later’ that requires significant investment
and patience from their backers. All have first carved out a distinct niche in
the United States and then turned to the pursuit of a global audience to reach
the scale necessary to break even. All of them have been launched by people
with strong networks in other media companies, leveraged for visibility and
investment, confirming the wider point that innovators are rarely young, new
entrants and more often are people who bring confidence, business
knowledge, and social connections accumulated from prior experience at
existing organisations to a new venture. 16 Not all of them survived. Some
otherwise very impressive start-­‐‐ups, much lauded at the time, have not made
it – like the mobile-­‐‐first news service Circa and the technology news site
GigaOm.
European markets, some of which have as high levels of internet use as
the United States, but where country size and language barriers mean that the
markets are smaller, where digital advertising has generally grown less
rapidly, and where legacy media are often stronger, have been less fertile
ground for digital journalism start-­‐‐ups. One review of nine leading sites
across France, Germany, and Italy from 2012 found only one breaking even
and concluded that start-­‐‐ups needed to have very lean operations, diverse
business models, and carve out a clearly distinct niche in the market to
survive. 17 With limited opportunities for international expansion in other
languages than English, the European digital journalism start-­‐‐up scene has
predominantly been made up of niche players who have targeted relatively
small, very clearly defined, and often affluent specific audiences and produce
editorial content that stands out from what other media provide.
Across the United States and Europe, even where digital journalism
start-­‐‐ups succeed in developing new and interesting forms of content, in
15
http://hbswk.hbs.edu/item/why-­‐‐companies-­‐‐failand-­‐‐how-­‐‐their-­‐‐founders-­‐‐can-­‐‐bounce-­‐‐back
16
Audia and Rider (2005).
17 Bruno and Nielsen (2012).
11