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Risky Business: John Harris, Jim VandeHei, and Politico Part B: A Winning Model?

Abstract

CSJ-09-0021.1 These two stand-alone cases examine separate aspects of the hybrid print/online political news outlet Politico . In Part B, students take an in-depth look at the business model Politico adopted. Its founders, John Harris and Jim VandeHei, were fortunate to secure financing for their political news project. But the funder, Robert Allbritton, required them to publish a Capitol Hill newspaper in addition to their online product. After nearly two years in business, Politico ’s newspaper revenues surprisingly exceeded those from online 60-40 percent. With the close of an exciting election season which had fueled a growing stream of visitors to its website, Politico ’s leaders ask themselves how sustainable their model will be once readers’ attention shifts away from the election’s drama, and political news outlets must cover the more specialized area of law-making and governing. Can the start-up survive against the established Washington heavyweights the New York Times and Washington Post ?

In class discussion, students will be asked to imagine themselves in the shoes of journalism entrepreneurs deciding what formula will ensure sufficient revenue to continue operations. They will have a chance to discuss in particular the realities of print vs. online revenues. If print is outdated, why does it continue to generate significantly more advertising income than online? What are the long-term prospects? How should a start-up budget for its early years? In a niche market, what — if any—advantages accrue to new businesses vs. the older, established brands?

This case can be used by itself, or in combination with Part A.

The case is suitable for classes about the business of journalism; about newsroom management; or about digital media.

Credits

This case was written by Kathleen Gilsinan for the Knight Case Studies Initiative, Graduate School of Journalism, Columbia University. The faculty sponsor was Dean of Academic Affairs William Grueskin. Funding was provided by the John S. and James L. Knight Foundation. (1109)

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