Business journalist Erik Spanberg could make more money and have more job security if he left Charlotte Business Journal and struck out on his own. Here’s how.
Local media is getting worse and worse because of the internet. Print and television now compete head on against Facebook and Facebook will win. Revenue will decrease for traditional local media companies.
What does lower revenue mean? It means less money to pay reporters, which means fewer reporters. There are now 5 PR professionals to every 1 reporter. This ratio will only increase. It’ll start by older, experienced reporters being replaced my younger, less experienced reporters.
Bottom line: There is going to be dramatically less original, high quality news reporting in Charlotte over the next 5 years – this means less competition.
*The one caveat to this is that I believe Charlotte Business Journal (and all of ACBJ for that matter) is beautifully set up to take advantage of the future because of their diversified revenue and lean model.
Erik Spanberg is the best positioned journalist in Charlotte to turn into a one-man media company.
Spanberg is the best-known business journalist in Charlotte. I’ve been to business related press conferences with him and I can tell you – it’s Spanberg and the rest of room.
This is important because executives can bring out their company credit cards and expense business news. This can’t be underestimated. Being able to expense a media subscription drives media subscription sales (duh).
Spanberg also has mastery over a wide range of topics and is familiar with the pace of the internet – he files stories all the time, often once or twice a day. Many traditional reporters aren’t used to this pace, Spanberg is.
Bottom line: Spanberg is the most well known business journalist in Charlotte and the business community would be able to use their business credit cards to pay for content.
What is the exact product that Spanberg would launch?
- Morning newsletter with hard news recaps, opinion and some reporting.
- One original report per week, published to the public.
- Weekly podcast.
Yes, this is a lot of work, but I’d argue that it’s a similar level of work to what Spanberg is currently doing.
Simple business model: Readers pay $10 to subscribe and there would be one title sponsor for the year.
Tools: WordPress for the site, MailChimp for the newsletter, Memberful/Stripe for payments. Easy.
An example of a similar working model is Ben Thompson’s Stratechery (one-man site on tech and strategy).
Setup: Legal and quality site design would be about $4,000.
Revenue: $10/mo reader subscription. Title sponsorship would go for $30,000/yr.
Year 1 back of the napkin scenario: Spanberg lands 1,000 subscribers and a $30,000 title sponsor for a total of $150,000 in top line revenue. After expenses, that’s over $140,000 in net income.
This then scales quite nicely. If Spanberg continues to deliver and lands 5,000 subscribers in a few years, he would then be generating $700,000+ in net income (all recurring).
The question comes down to: How many $10/mo subscribers could Spanberg generate?
I’d say the total addressable market for individuals interested in local business information is 50,000.
I believe Spanberg could grab 2% to 10% of these individuals as paying subscribers.
So, if this is so easy, why doesn’t Spanberg do it?
Momentum. Safety. The same reason most people don’t become entrepreneurs. I’ve also found most journalists to be oddly uninterested in media business models. Also, I’d bet that the suits at Charlotte Business Journal or parent company American City Business Journals understand the value of Spanberg and give him what he wants.
I would invest my personal money in Spanberg, LLC. Dead serious. If I had to estimate, I would predict that he would get 1,200 subscribers paying $10/mo within 12 months.