Henry Blodget, who was speaking ahead of his appearance at Campaign’s Digital Media Strategies U.S.A. conference in New York on November 15, founded Business Insider in 2007 and sold it to Axel Springer in a $443 million deal in 2015.
There is still room for "some" new entrants to the news market, according to Blodget.
"If you are a new entrant with a very strong value proposition that the audience loves from the get-go, then, yes, there is a room for you in the same way that there was always room for a great magazine or a great newspaper that served some need that others were not providing," he explained. "That said, I do think it’s much more difficult than 10 to 15 years ago when the industry itself – just in terms of the number of people that were coming online and the number of dollars that were being spent – was growing 10%, 20%, 30% per year.
"Now we are in a much more mature environment. We are now saturating the amount of media time that is available in the developed world.
"We all have phones, we all have laptops, we all have our smart voice devices, we have our car time and our TVs.
"There’s not much more media consumption time that can be created. That’s going to make it even more challenging for the companies competing for that time."
A generation of digitally led news organizations including Business Insider, BuzzFeed, HuffPost, Politico, and Vice Media were founded a decade or more ago and have won lofty valuations.
Now a new wave of entrepreneurs is entering the news market, including James Harding, who has resigned as director of BBC News to launch an as-yet-unnamed venture, and Jon Steinberg, the former chief executive of Daily Mail America who founded Cheddar, an online financial TV news network, last year.
Digital journalism is a viable business
Blodget said Business Insider has "proven happily that digital journalism is a viable business" as it has a "thriving advertising model" as well as a "smaller but also thriving subscription business."
It has a monthly audience of 123 million unique global visitors and claims to be "the number one business site by reach in the world."
He will speaking at Digital Media Stategies USA in a session called "The Journey Of Business Insider: Creation To Acquisition, What’s On The Horizon?", in conversation with Ken Auletta of The New Yorker.
"When I look back 10 years ago, people were rightly very sceptical and concerned that digital simply wouldn’t work as a journalistic medium," Blodget said. "I feel like we and the industry have come an incredibly long way in the last 10 years.
"In terms of where we’re going after that, it takes decades to build great, influential news organisations," he said, citing CNN, CNBC, The New York Times, and The Wall Street Journal as examples.
"As we look forward, we want to capitalise on the digital medium, take full advantage of it, and continue to get better at it."
Advertising continues to be the main source of revenue and the site has had "a very strong year on the advertising and partnership side," Blodget said.
However, driving subscription revenues, which is growing "a little bit faster than advertising" for Business Insider, is important because history shows that other media organisations such as cable TV networks and newspapers prospered from a combination of advertising and subscription.
"And that has been our objective for the past five years – to build a dual revenue stream business," he said.
Business Insider offers in-depth reports on a subscription basis and has been quietly experimenting with a paywall for news content for the last year.
Subscription revenue allows for a "much wider range of journalism" because coverage can be "very narrow" and "very deep," Blodget said. "Advertising is very good for [funding] broader coverage."
A pivot to 100% video would be crazy
Video, including shows on the new Facebook Watch platform, has been a growth area for Business Insider but Blodget dismissed the suggestion it can be a substitute for text-based journalism.
"The idea that a ‘pivot to video’ is going to save text publishers who can’t make it in text is crazy," he said. "Video is as difficult, if not more difficult, than producing compelling written journalism."
"The idea that now the world is going to become 100% video is also crazy," he added.
Business Insider creates "many different story formats" such as text, audio, podcasts, streaming, and video on "many different platforms."
"I think what you’ll see happen in digital over the next 10 years is a new kind of company will evolve that does all of these different things and different story formats," he said. "When you see the fully developed digital company in 10 years, you’re not going to say, ‘That’s like a TV company or a newspaper company.’ Those both will be artefacts of long-dead eras and we will have a new concept of what a news organization or media company is.
"It will be a company that will be producing all of these formats and distributes them across all available platforms."
This story first appeared on campaignlive.co.uk.