Ailing News Media Needs Help From Startups

As the Internet forces newspapers to cut costs, startups fill the gaps.

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Many tears have been shed over the supposedly imminent death of traditional journalism, to the point that some have even advocated a journalist bailout. But what's been too often ignored in analyses of the media is the role of the entrepreneur. The problems for the news media are creating opportunities for startup businesses to help the industry adjust to a new world.

The Wall Street Journal reports today that several major newspapers are outsourcing their foreign coverage in order to reduce the costs of maintaining foreign bureaus themselves. In some cases, this is going to mean newspapers just getting material from other newspapers. But there's also a very interesting role for the "new media" to play. As the article says,

Meantime, the New York Daily News has reached an agreement with a Boston-based start-up called GlobalPost to use the company's network of part-time foreign correspondents.

GlobalPost describes itself as a "direct response" to the forces that are eroding traditional journalism. But unlike other responses to those forces, like the Center for Independent Media, GlobalPost is for-profit. Their business model is based on three sources of revenue: online advertising, sale of content to other publications (like the New York Daily News), and paid membership for access to premium content. It will be interesting to see if this business model succeeds.

This is also more evidence that outsourcing by large companies will be a major driver in startup activity this year. Outsourcing doesn't always mean jobs going to call centers in India--in this case, it can mean more foreign correspondents in India.

(Full disclosure: the New York Daily News is under the same ownership as US News & World Report.)


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