Independent news sites gravitate back to the fold

London: The chief executives of Snapchat, Airbnb and Oculus Rift were among the those who gathered for the annual Recode conference in southern California. The 700 tickets, at $6,500 (Dh23,874) and up each, sold out in a few hours.

Recode, a technology-focused news site and conference business, was started by Walt Mossberg and Kara Swisher, who built the All Things D franchise for the ‘Wall Street Journal’ and ‘News Corp’, its parent company, before striking out on their own.

With conferences to generate revenue and no printing or other physical distribution-related costs, Recode would seem to have crafted a model for a new kind of independent, entrepreneurial journalism. In theory, it would not require the support or infrastructure of a bigger, more established media group.

But the founders have revealed they had sold the business to Vox Media, a digital group with a portfolio of websites that includes the dining site Eater, The Verge, another tech site, and SB Nation for sports.

Even low distribution costs, diversified revenues and an online readership may not be enough to support stand-alone publishers in the digital era. “Everybody is bigger than us,” Swisher told the New York Times. “It’s not a secret that being a smaller fish is really hard.”

Competition is fierce but, outwardly, internet publishing appears healthy — particularly in California. Whether in Hollywood, where ‘The Hollywood Reporter’, ‘Variety’, ‘The Wrap’ and ‘Deadline’ duke it out online for the latest scoops, or Silicon Valley, where Recode jostles with sites such as Techcrunch, Pando Daily and The Information, the market for news and analysis is vibrant.

But online advertising alone has not been enough to sustain all or at least part of this new generation of news outlets. GigaOm, a popular independent tech site started by Om Malik, ceased operating this year when it ran out of money.

The sites that remain and which are aimed at specialist or niche audiences have either succeeded in generating diverse revenue streams or been sold to owners and backers with deep pockets. Techcrunch founder Michael Arrington sold his site to AOL in 2010; AOL’s recent $4.4 billion sale to Verizon means the site is now part of an even larger entity.

Nate Silver, the political forecaster who predicted the result of each US state in the 2012 presidential election could have struck out on his own when he left the ‘New York Times’. Instead he chose to build a data journalism operation with a staff of writers and analysts within ESPN, the sports cable network owned by Walt Disney.

Gawker, the network of digital sites started by Nick Denton, has stayed independent by generating fees from e-commerce referrals to online retailers, which supplement its online advertising revenues. The gross value of deals done via its network is on track to hit $160 million in 2015, compared with $100 million in 2014, according to one person close to the company.

BuzzFeed, meanwhile, raised $50 million in funding led by Andreessen Horowitz, the venture capital firm, last year, valuing the listicles-to-news site at $850 million. The company, which briefly held talks about a sale to Walt Disney a year ago, is still independent and the best in the business at generating large volumes of internet traffic. But it has diversified beyond online advertising by moving into branded content and creative agency campaigns.

Swisher and Mossberg have been promised editorial independence at Vox and will be able to use the company’s publishing platform, and greater advertising and marketing resources. Vox closed a $46.5 million round of funding in November which valued it at $380 million but it, too, may yet be swallowed by a larger owner.

Comcast Ventures, the cable company’s venture arm, owns a stake of about 12 per cent and could ultimately buy Vox outright. Other potential acquirers from Europe have also expressed an interest in the company, according to sources.

Recode, then, may yet find itself with a new owner and Swisher and Mossberg, who left News Corp, could be back where they started: part of a large media company.

Other distinct voices have found a home at Vox, namely Ezra Klein, the policy blogger who left the ‘Washington Post’. That his output has not been diluted or lost its bite since joining Vox suggests that Swisher and Mossberg would be in good company.

But their decision to sell should make all independent news publishers pause for thought. The market for technology news is vibrant and global and the audience is growing. If two of its leading practitioners cannot make it independently in the digital era, can anyone?

Financial Times