What exactly are Greenwald & Omidyar doing?


December 22, 2013

I want the Glenn Greenwald-Pierre Omidyar news media project to succeed. I want it to work bad. But from the little information we’ve been provided so far, I’m losing optimism.

This past week Jay Rosen, a member of the Greenwald-Omidyar team, announced more details for the project, now dubbed First Look Media. The key announcements, made in an official press release:

  1. First Look Media will be an non-profit organization;
  2. There will be a for-profit tech arm, focusing on selling new media tech. The for-profit arm will provide profits to the non-profit arm; and
  3. Omidyar has contributed $50 million to the media venture, with $200 million more to come.

Rosen, in a personal addendum following the release, hails the creation of a non-profit as workable solution, and cites the Guardian Media Group, The Poynter Institute’s Tampa Bay Times and ProPublica as precedents. The idea, Rosen suggests, is that news needs money to operate, and while a non-profit with a big cash cushion is one way to do so, First Look Media will go one step further, by drawing profits from its news technology for-profit arm.

It’s a belt and suspenders approach, Rosen suggests.

Except it’s not, since the for-profit technology arm is far from operational, let alone successful. And hey, outside of advertising solutions (which are becoming highly competitive) where are the profitable new media solutions companies?

There aren’t any. In fact, every successful new media technology has either been directly tied into a open platform for content (Instagram, Medium, Tumblr), open sourced to be used by others (WordPress) or entirely proprietary to the content system (Gawker comments, Buzzfeed, Patch). New media technology creation has low barriers to entry: practically any coder can create a CMS. But excellent new media technology needs to be highly customized to specific requirements with constant refinement–and an on-staff development team, not consultants.

Where is the vast opportunity for First Look Media’s for-profit arm? Rosen’s blog post doesn’t answer that question, and the lack of a clear answer poses even more difficult questions: Does this mean First Look Media’s long-term future will be dependent on the success of a unknown, unproven technology venture? Or is the for-profit arm just a toy, while the non-profit will maintain enough cash in low-risk investments to keep operating on a 5% return every year?

But all this talk of external revenue streams papers over a more important question: Who are the anticipated readers for First Look Media’s publication and what content area will it target? The official release says, “First Look Media will publish robust coverage of politics, government, sports, entertainment and lifestyle, arts and culture, business, technology, and investigative news.” Which is a round-about way of saying, “We don’t know what we’re doing yet and we’re not willing to focus.”

The fact that this went into a press release and is trumpeted as news scares the hell out of me. Successful startups, which describes First Look Media, regardless of the cash pile behind it, must focus on doing one thing well, before going on to a second thing. And, they know who their target audience is before they start building their product.

So, what exactly is First Look Media’s focus? We don’t know. It could be anything, including pogo stick racing, Beyonce’s fashion choices or criticism of Nigerian cinema.

Rosen’s blog post, the most detailed information the world has seen on the Greenwald-Omidyar project, is almost entirely focused on organization structure, rather than product, audience or business model. It is a mistake many, many other start-up news organizations have made before: If we produce some kind of great reporting, people will buy it and then we’ll be successful. That doesn’t work any more. (Has it ever?)

There are promising new news ventures. Jennifer Lessin’s The Information, which is starting small, has a clear audience and an even clearer revenue model. Same goes for Andrew Sullivan’s Dish. Buzzfeed, which is all about eyeballs by volume, started with cat pics to draw an audience and is now opening up foreign bureaus. The clarity of these business models helps to provide transparency to the news delivery as well: There are no complex transactions or mysterious, large donors to satisfy. Everything is kept above board.

Here’s to hoping that the next press release from First Look Media provides a better look at the organization’s planned operations.