Former Rocky Mountain News business writer David Milstead wasn't among the group of Rocky types who founded IWantMyRocky.com, a website that served as the foundation for INDenver Times, a site that's not going forward with a full-scale launch early next month because only 3,000 subscribers signed up to pay for it -- far short of the 50,000 subscriber goal. Instead, he was recruited to participate in advance of a March 16 press conference announcing the INDT idea. Since then, however, Milstead has become a prominent member of a thirty-member staff of former Rocky Mountain News journalists, working closely with managing editor Steve Foster. And today, he says, he's joining Foster and "a handful" of other crewmembers in a new mission -- one that would be conceptually similar to the idea behind the Times, but under a different name and without the participation of Kevin Preblud or the original INDT backers.
Preblud and his cohorts say they're interested in seeing if a modified business plan can be applied to INDenver Times, which Milstead calls "the most interesting development" to come out of a meeting yesterday about the site's future. "The fact that they ultimately failed to meet the subscriber goal wasn't necessarily surprising in the end," he maintains, "but the fact that they intend to continue kicking the tires and trying to figure out something different -- I was surprised by that."
Given the continuing presence of the Preblud team, Milstead says, some of the INDT journalists may want to continue working with its members -- although he doesn't speculate about whether that could mean new content on the website after today. (The staff had previously decided that they would continue to post material on the 23rd in honor of what would have been the Rocky's 150th anniversary.) However, he goes on, "some may decide based on last night's news that now it's time to pursue full-time opportunities outside of journalism." And others could join him, Foster and "several others who contacted me by e-mail after the meeting who are interested in the original vision."
That doesn't mean web-heads should expect a new site to suddenly materialize in the coming days. "We were focused on making this venture work with these backers," Milstead stresses. "We were not stealthily developing a shadow site that was ready to launch if something like this happened. We were fully committed to this concept. So I can't tell you that, starting Monday, there's going to be a new site with a new logo. It's not going to happen like that, and unfortunately, that may mean that a lot of momentum may be lost. But we'll have the chance to step back and take a little bit of time to look at what went right and what went wrong with this, and develop a new plan."
Many observers feel that the 50,000 subscriber goal was wholly unrealistic from the start. Still, Milstead understands why Preblud and his team set the bar there. "The 50,000 subscriber number at the stated prices would have essentially funded the newsroom for the first year, free and clear," he says. "It was a great number for a launch, because it would have allowed the venture to begin with no outside capital. When I looked at that from the outside, before I got heavily involved, I thought to myself, these guys are getting a significant stake in the company, and if they get the subscriber number, they don't have to spend any money. And I'd sign up for that. When you don't hit the number or even come close, though, that's when you have to step up and decide, 'How much money are we going to put into this?' And that's where they ultimately decided not to do anything."
Regarding the subscription campaign, "We got an initial burst of interest from the publicity, and from friends and families and professionals who signed up," he goes on. "After that, it was a word-of-mouth situation, with the site gradually becoming more robust but never quite getting to what we felt was a finished product. And that presented a classic chicken-and-egg problem. It's hard to sell subscriptions on a promise."
The lack of an aggressive marketing campaign increased the level of difficulty. In Milstead's view, the INDT staffers, most of whom worked part-time on the project, came up with some remarkable material under difficult circumstances -- and because of an oral agreement with Preblud, they actually own the rights to the fruit of their labor. But because the site was undeniably a work in progress, "you could ask yourself, 'Why spend tens of thousands of dollars to create brand awareness if the product isn't where you want it to be?' I spoke at a luncheon last week about the future of media, and I acknowledged that this is not how you'd roll out a consumer product. Procter and Gamble would never put out a shampoo that was half-finished and tell people, 'Start buying it now and it will get better later.'"
Under these circumstances, Milstead agrees with Preblud that gathering 3,000 subscribers in less than two months is quite impressive. Indeed, Preblud and his partners attended an online journalism conference in Austin this past weekend, and Milstead says many of the attendees were positively wowed by the figure. Then again, Milstead assumes that the men approached assorted investors in Texas and elsewhere to keep the site going -- and if that's the case, none of them offered to open their wallets in support of the INDT setup.
In the end, the original investing trio concluded that supporting an online-only news operation featuring a staff of thirty was financially unfeasible. But Milstead isn't ready to give up on the idea. "The conventional wisdom is that six to ten people is the right size," he says. "But if you look at the Denver market two years ago, the Rocky and the Denver Post brought in more than $400 million in revenue online and in print. And in 2008, that number was under $300 million, but close. Now, one of those legacy brands has been completely snuffed out. It's not even like in Seattle, where the Post-Intelligencer [which stopped putting out its print product a few weeks ago] is still online, with the same brand and some of the same people. The Rocky is completely gone, and there's no derivation of the brand in the market. And if you do the math on the numbers the Post and the Rocky produced as recently as last year, one percent of that revenue covers a three-million-dollars-a-year newsroom."
When viewed from this perspective, Milstead believes that "Denver offers an opportunity that's different than any other market. If you try to fit Denver into conventional thinking about pre-existing business models, you get the result you have today -- a lack of financing. But Steve and I are willing to look around and make the case that there's a different way to do things."
Not that Milstead thinks such an enterprise would be an immediate cash generator. "We're not going to argue that if you fund this concept with over two dozen journalists, you're going to make money in the first six months, or even the first year," he says. "But we still think the opportunity is great, and that someone else is going to recognize that and take a flyer on it. So we'll ask around and see if there's anybody who feels that way. If there's not, we'll find that out, too. But it seems to us that there's too much of an opportunity in that idea to settle for fewer than ten journalists and try to call it a true online news product."
Milstead understands that finding such an angel won't be easy. "The cost structure is significant and scary for potential investors," he says, "and it goes against conventional wisdom. But anyone who tells you they know what's going to happen in the media business in the next twelve or eighteen months is wrong -- and we think someone might be interested in trying this new path. Successful businesses are often built out of things that haven't been tried before. And if you're going to stick with things that have been tried before and worked, who needs entrepreneurs?"
