Saturday, June 30, 2012

Independent print startup thrives despite crisis

While print newspapers are losing subscribers and advertisers in the rest of Europe, an Italian print publication launched by an investigative reporter is thriving because of its independent voice.

Il Fatto Quotidiano (The Daily Facts) has been slaying sacred cows since 2009 and makes its money from subscribers and newsstand sales -- roughly 6 million euros in profit in both 2010 and 2011. Part of its success may be attributable to its opposition to then-Prime Minister Silvio Berlusconi, whose control of a vast media empire tended to stifle criticism of his administration.

As of June last year (the latest figures available), Il Fatto had circulation of 127,000 daily, with 42,000 subscribers (at 290 euros annually), with the rest sold on newsstands. Earlier this year it reported 450,000 unique users daily for its online edition.

The fact that a print publication supported by subscribers could thrive amid a worldwide economic downturn and a collapsing economic model for print seems remarkable.

No sacred cows

The newspaper got its start when a blogger known for investigative reporting, Marco Travaglio, was asked by a fellow journalist, Massimo Fini, to help him promote his new magazine on the blog. They received such a positive response that Travaglio decided there might be enough support for a daily newspaper.

Travaglio assembled some journalists as investors and began promoting subscriptions to the new newspaper in June of 2009. He promised that it would be an independent voice, cover topics passed over by the mainstream media and accept no government subsidies (Italian dailies generally receive subsidies that depend on support of particular legislative leaders). 

Evidently the appeal touched a nerve because Il Fatto had 28,000 subscribers at the launch three months later in September. The first edition of 100,000 copies quickly sold out on newsstands.

It made a profit in 2009, and in 2010 reported revenues of 29.6 million euros and profits of 5.8 million euros. Peter Gomez, formerly of l'Espresso and a founder and shareholder of the newspaper, reported early in 2012 that the publication had profits of 6 million euros in 2011 despite a slight drop in the number of copies sold.

To date, advertising has not been an important revenue source, although Il Fatto's executives are trying to change that.

The publication has an editorial staff of 16.  A recent filing showed there are nine shareholders, none with more than a 16.6% share.

Known for its scoops

"Since their foundation, Il Fatto has made many of the most important scoops (including Prime Minister Berlusconi’s alleged affair with the underage prostitute), and obliged other media to compete for quality and investigative journalism," said Andrea Cairola, formerly an investigative journalist in Italy who is now promoting freedom of expression for Unesco.  

Some journalists in Italy are critical of Il Fatto's journalism because of its opposition stance and its heavy reliance on opinionated bloggers to supplement its staff of journalists.

However, its profitability should give hope to media entrepreneurs who want to launch something different. If you create something different from what everyone else is doing, and you satisfy a need (in this case, an independent voice), you can create high-quality journalism and a successful business.


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