The biggest threat of all

The biggest threat to newspapers has nothing to do with the fall in circulation revenue, a drop in ad revenue or the stagnation of digital revenues. It has nothing to do with falling circulation. It has everything to do with three letters:

A-O-L.

You remember America On Line? Nice little company that once was the buzz among digital sites but has been overshadowed by Google, Yahoo, MSN, etc. Folks, AOL is back — with a vengance.

AOL has hired 500 full-time journalists and another 1,500 freelancers, according to the much respected TechCrunch.  As the report shows, AOL has hired some of the nation’s biggest and most recognizable names, all of whom worked for journalism giants.  AOL wants to buy up media brands and expand on its existing content in an effort to become a content goliath.

And why not? AOL’s numbers were down in 2008, but on a full year basis, had revenue of $968M and OIBDA of $405M, according to published reports.  With publishers in a cutting mode, AOL looks to fill the gap in two ways — by providing content to its customers and jobs to seasoned professionals with name recognition.

Can AOL get into hyper local community journalism? Probably not. There’s probably not mch money in AOL reporters scouring the local fire department or city council for news. But there is money in financial and sports news, and other specialty coverage. Could AOL go the ESPN route — create a stable of names that customers will easily pay to read?

Might others follow suit? Again, why not? These search-related businesses might find it easier to hire content producers — and there are plenty available — the battling publishers demading money for their origianl content. If AOL can do this, others can too, and that’s a scary proposition.

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One thought on “The biggest threat of all

  1. Jeff Achen says:

    A threat to newspapers perhaps, but good news for out of work journalists. It’s good to hear at least one big company thinks journalism has a future and wants to pay journalists to work for them!

    Downside? Is there really one? Even without this as a factor newspapers are on the decline. Do we really need to place blame on one of the few companies it seems is HIRING journalists by the thousands???

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