Hat tip to Peter Kafka, who writes MediaMemo for All Things Digital, for sharing a business model — put together by Mark Josephson, CEO of outside.in — of a hypothetical online-only news organization. While Josephson’s metro news operation of the future sports a mighty lean staff — 20 bodies in all, of which six are “news gatherers” — it forecasts a pretty hefty 41% profit margin!
Josephson’s model is available as a Google spreadsheet. And like all good hypothetical business models, its hypothetical P&L looks downright rosy — the page view and ad revenue projections seem particularly bullish. But that’s what models are all about: State your case, make your assumptions and be prepared to defend or adjust them. Which Josephson does in the article’s good comment thread.