Tag Archives: Digital Media

The New York Times acquires online consumer guides

Commentary

Just like other traditional media companies, The New York Times has struggled to stay relevant in the digital age. After suffering shrinking revenues for two consecutive quarters, the company has bought two new revenue streams to offset its loses. Last week, the company announced that it acquired product recommendation websites The Wirecutter and The Sweethome for over $30 million. Founded by former Wired and Gizmodo editor Brian Lam, The Wirecutter and The Sweethome recommend electronics and gadgets that users can click on to purchase. The websites earn revenue by getting a commission for every successful sale. According to analysts, this style of product advertising is quickly becoming the norm and should help The New York Times adapt to a new advertising revenue model.

Boom or bust

Commentary
Thanks to the influx of smartphone users, digital news websites have more traffic to their sites. As more people consume digital news, investments in the sector have continued to grow. This week, Inc42, one of India’s leading technology news websites, received its Pre-Series A from a group of local investors. In the US, Crunchbase, a platform providing information about startup funding, raised $2.2m in a Series A2 round. On the acquisition front, Marketwired, a press release distribution service headquartered in Toronto, is now in the process of being acquired by Nasdaq. Now the question that comes to mind is, how will these sites make money? According to a recent report by Reuters Institute for the Study of Journalism, more than 60% of online readers will never pay for digital news, while those who are willing to pay are only willing to shell out an average yearly fee of not more than $8.00. What’s more, online readers are turned off by ads and sponsored content. Given these findings, monetising online news will be challenging for startups, even though the digital media boom is predicted to continue.