From small seeds….
Rafat Ali announces at PaidContent that he has taken his first investment from the fabled Alan Patricof, who was early into Apple, AOL, and New York Magazine. The WSJ says it’s under $1 million. Rafat told the Journal that he’ll pull in $1 million this year from ads and events. Rafat is the most amazing reporter and entrepreneur I’ve met online, this side of Nick Denton. It will be good to see him have the resources to expand. The Journal finds a trend here: Om Malik of GigiaOm gets less than $1 million from True Venture Partners and Christopher Carey of Sharesleuth.com gets an undisclosed investment from Mark Cuban. Patricof told the Journal:
Mr. Patricof says niche publications on the Web are a “great place to be,” with lower investment requirements and easier spinoff opportunities than print media. “To start a magazine today would cost a minimum of $15 million to $25 million, and you have to spend through three or four years of losses,” Mr. Patricof said. With blogs, “the economics are a lot better.”
My Entertainnment Weekly went through $200 million before breaking even (not my fault); now it’s a $300 million a year franchise. Weblog companies won’t make that much but they don’t need that much to be successful. After all, small is the new big.
: Patricof says in the Guardian report: “I look at blogs as the hyper-interactive magazines of the future, only with far greater ability to create communities and expand into new areas.”
: See also Ad Age, below.
Tags: Weblogs
June 26th, 2006 at 9:11 am
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June 26th, 2006 at 10:22 am
I’d have to agree with that final statement. Blogs are still in a very embryonic stage. Most of the blogosphere’s critics are reacting to one paticular type of blog while ignoring the mediums wider potential.
June 26th, 2006 at 3:15 pm
Small isn’t the new big. Small is just the old small. But apparantly folks like Patricof (and you Jeff) are scared (probably with good reason) of the notion of investing in big expensive product development, like it took to create and launch and normalize EW.
That is, until you aren’t scared. I read VentureWire every day and I am stunned with amount of venture capital, in big huge gobs, being thrown at new media ideas.
Also, entities like Huffington Post and Federated Media kind of show the “small is the new big” idea to itself be, well, small. Aggregation is still the way to scale, and prosper, whether you are aggregating journalists and journalism and reviews and pretty pictures (say, in EW, or GigaOm) or aggregating blogs (Huff and Federated et. al.) or aggregating personal home pages (ooops, I mean User Generated Content).
Any case, big media companies aren’t going away, nor are big energy companies or big food companies or big anythings. Patricof put in his money to try to get a venture-size return… meaning to hopefully sell the venture (too small for IPO) to (drum roll please) a big media company.
Oh, and I don’t think the nation state is going to wither away either.
June 26th, 2006 at 6:31 pm
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June 26th, 2006 at 9:54 pm
Took the words right out of my mouth.
It’s inevitable that, like decent websites, the cream will rise to the top and cluster to form larger entities… trick is, figuring out where that cluster will form around.
Aye, there’s where the money will be with “small niche online publications” be they blogs or journals.