Is it possible to build a big and scaleable online original content news site (i.e. professional blogging site) ?

For the past few years everyone in publishing has been talking about the changing economics of publishing/news reporting as the world moves from old media to new media. 

The new theory for original content news has been:

Forget about the printing press.
Forget about physical product (e.g. newspapers)
Forget about the subscription fees.
Just move it all online and hire a team of online journalists (professional bloggers) and you can compete at a fraction the costs while building a faster, more nimble, and higher margin new media company.

We've seen plenty of examples of this new model starting to show signs of potentially clicking, especially in the tech category.  Examples include:  Techcrunch, PaidContent, Mashable, Read Write Web, All Things D, Gigaom, and Silicon Alley Insider.  All of whom seem to be progressing well and building decent traffic.

Not surprisingly, all of the above sites are succeeding because they consistently offer unique and original content.  They break news.  They get exclusives.  They provide thoughtful analysis.  In short, they do what news organizations have done for years: they get the story.  Content is still king.

But, do they scale to be big businesses?

Best guess is that the most successful of these sites are approaching about $10M in annual revenues (TechCrunch).  The next tier are probably at about $3-5M.  Those revenues may be inflated by the recent boom; revenues in a down economy with softer ad spend are probably realistically 70% to 50% of that.  With a team of 10-15 people, expenses, and accompanying overhead, $3-5M/year is probably marginally profitable.  With a recession haircut, not so much.

But, again, does it scale to be a big business?

Can the $10M guy become a $20M guy?
Can the $3-5M guys become more $10M guys?

My bet is that for most the answer is no.

Which is why we're starting to hear a lot about consolidation in this space.  It's also why we're hearing a lot about folks potentially raising big wads of cash -- if they want to position themselves as the acquier vs. the acquired.

BUT, me thinks there is still a bigger problem with the model, as highlighted by today's resignation by Duncan Riley from TechCrunch.   That problem is the biggest problem of them all:  The human capital problem.  You see, being a professional blogger is a burn out job.  You thought being a journalist was hard?  Being a professional blogger is so much harder.  Daily deadlines?  Hah!  Try 50x/day deadlines.  Talk about racing the world to post first.  Check that:  racing the world to twitter first and still post ahead of everyone else.

I sat down with one of Duncan's peers from one of TechCrunch's top competitors a couple of weeks ago.  This is a guy who left corporate journalism to be a professional blogger and who is considered to be one of the smartest and best.  I asked him how it was going.  His response was not what I expected.  I expected to hear about their growth and the joys of not being in corporate journalism anymore, of freedom to write whatever he wants, of being ahead of the game, of using the latest technologies.  Nope.  His response:  "It sucks.  I'm working harder than ever.  Longer hours.  More to do than humanly possible to keep up with.  There's never been more pressure.  And I'm not making anymore money than I used to."

p.s. It's interesting to note that the 2 sites in the category who are perhaps succeeding the most both don't follow the typical model.

1. Drudgereport  which is incredibly profitable because it's so darn simple and lean on staff
2. HuffingtonPost which is knocking the cover off the ball by combining original content with a network of external contributors.