The Grounding of 'The Green'

Two stories appeared on the Web just before the 4th of July holiday that pretty much plotted the media business' general narrative arc, circa 2006: Jack Shafer's account of the "Incredible Shrinking Newspaper," and the news in The Wall Street Journal that PaidContents Rafat Ali had become the latest solo journalist to take money (subscription required) from the venture capitalists begging to bankroll him.

The lesson to be gleaned from all this: Old media is not only disaggregating, it's atomizing into individuals—whether that be civic-minded amateurs; techies with a nifty algorithim, or entrepreneurial journos. It's apparent in the blow-by-blow accounts of Tribune Co.'s battling board members and Om Malik's decision to effectively leave Business 2.0 to run GigaOm full-time.

Reading these stories (and the dozens before them) had me wondering how my friend Craig Bromberg was doing. He'd spent the last two years fleshing out plans for a newspaper-Web 2.0 hybrid called "The Green," and I assumed he'd still be bullish on the future of free papers. But Bromberg, I learned, had just given up. He'd spent months seeking a measly $100,000 to mock up a few editions and get a beta site running, but the angels and VCs he met with had just platitudes to give him. I knew all of this because Bromberg had asked me early on to be editor of The Green—an offer I'd accepted before getting cold feet and backing away.

I convinced Bromberg to let me tell story of The Green here, to shed some light on why single-celled editorial organisms are the only ones drawing funding. It made sense to let an entrepreneur and his inner circle expose why it's so difficult to launch anything resembling a conventional media venture in 2006.

"Green"-er Pastures For Journal Readers
Craig Bromberg has been online since the prehistoric era, also known as Time Warner Pathfinder. He lost a bakeoff to be editor there, then over the next decade, put in stints at Disney, Bertelsmann, and Ziff Davis before heading off to business school. "I'd spent 10 years being blown around the media landscape," he says, "and during the same time I'd seen print's business models knocked around by then-nascent online media's."

As graduation approached and as his mindset evolved from that of an editor to that of an MBA samurai, he began looking for weaknesses in the media firmament he could exploit. The biggest opportunity, Bromberg decided, was a foil for The Wall Street Journal. "During my entire life in New York, I've never understood why the Journal was as boring as it was," he says. Digging into the paper's demographics, he deduced it hadn't spoken to his 2.5 million MBA-holding peers either, aiming instead for CEOs, their underlings and an investor class that had little in common with managers in the trenches hungering for news and meaty analysis.

Bromberg had already grown disenchanted with how the sausage of most business journalism gets made—a process in which Wall Street analysts double as the confidantes of CEOs and the nominally independent experts journalists turn to for their stories. "To a naïve reader," he says, "the fact that the news is pre-shaped and packaged by the time it gets to the journalist's table comes as something of a surprise. When I realized that, it seemed to me there was a lack of transparency."

In the blogosphere, Bromberg saw an opportunity to replace the top-down dissemination of news with a bottom-up approach that would harvest the analysis from the blogosphere's chattering classes and synthesize it with hard numbers to create a "cross-sector analysis" of the finance, media, retail, energy, telecom and a dozen other industries—all distilling the essence of those ambient conversations into a single story. "The Green," as Bromberg was already calling it in his mind, would also take an aggressively pro-green, pro-sustainability and pro-accountability stance that would effectively position the brand to the thinking young liberal—age 24-46, with an annual income of $75,000-plus—as a source of business news; a bobo counter to the Journal's arch-conservative stance.

Each of The Green's editors would monitor one or more sectors, reading, thinking, and blogging on its site throughout the week, then distilling those nuggets once a week for its newspaper incarnation. "They were going to be guides," Bromberg says, "not that different from About.com's, only they would take their 2-D blogs, add the collective wisdom and ratings of the great, unwashed masses, amplify their perspective, add their own layer of snark and wisdom so that you had—aha! —a really cool column in the newspaper."

As an advertising vehicle, The Green would be as cynical as the editorial was idealistic—green-tinted free weekly distributed to the homes, offices, and neighborhoods of its target readers, with ads integrated into the design, including a spot atop the logo. (See the front page mock-up above.) "Instead of having to prop up a subscriber base with costly direct mail drops, you could do something that was essentially free to the reader that provided maximum value to the advertisers," says Bromberg. And with guaranteed distribution at a set price—$0.62 per copy was the quote he received—Bromberg would know exactly what he needed from marketers in terms of long-term commitments.

Planting Seeds
Initial conversations at BBDO and Mediavest proved that advertisers liked the concept, says Bromberg, at least in principle. The fortunes of the Sweden-based Metro chain—which currently operates free dailies in Boston, Philadelphia and New York, as well as dozens of cities across Europe, Canada and Asia—suggest that Bromberg's envisioned rollout had potential. In the first quarter of this year, revenues at Metro's U.S. papers rose 34 percent year-over-year (to $7.5 million) while operating losses were cut in half (to $2.4 million).

Like the possibilities borne out by Metro, there was nothing modest about The Green. According to the business plan, Bromberg would require $9.8 million in venture capital and break even sometime in Year Three, when the staff would already be 65 strong. Distributed in 12 cities by then, the paper's combined weekly circulation was a projected 1.2 million, meaning that among America's business newspapers, it would be second only to the Journal.

By the time I finally saw the business plan in the fall of 2005, there was nothing in it that seemed too outlandish. Free newspapers aimed at Generation X and Y were already established in New York, Chicago, Boston, Philadelphia and beyond; About.com had been sold to The New York Times Co. for $410 million—which just announced that the site was profitable again, ahead of schedule—the blog empires of Nick Denton and Jason Calacanis had proved the power of voice, and Digg.com was already demonstrating the wisdom of crowds in determining news value. Bromberg's plan added up.

At the same time, Bromberg and his partner/CFO, Jay Hirschson, had been accepted as a client by the law firm of Wilson Sonsini Goodrich & Rosati, and had recruited an interesting ally in Isabel Maxwell. Wilson Sonsini's clients are a corporate Who's Who of Silicon Valley, and Maxwell is a hardened Internet entrepreneur. Currently the president of Maxwell-Communications Network—and also the daughter of the late, notorious U.K. newspaper baron Robert Maxwell—when it comes to watching media empires and business models rise and fall, she's seen it all.

As Bromberg recalls, the lawyers loved the idea of The Green. "They told me they thought that all the Web-only stuff wouldn't have legs in the long run, and that this was the natural evolution of the newspaper," he says. In addition, they encouraged him to create a more Web 2.0 interface for the site, with drag-and-drop tagging, ratings, and more. Early in 2006, Bromberg and Hirschson began making the rounds, speaking to angels, seeking introductions and refining The Green's scope. But considering its complexity, there was no way to get a protoype up and running without handing some developers—not to mention any editor (myself included)—some cash.

"We kept going out there and telling people we wanted to do both media – newspapers and the Web," Bromberg says. "Then we got shit thrown at us—'We're concerned about the valuations of newspapers, even free ones'—and we said, 'Look at Metro and its revenue gains, and how it's expanded from country to country.' Then they said, 'You may not be around in five years in print.' I never bought that. People who say that are fooling themselves about the tactility of print and its potential for marketers." But Bromberg concedes that newspapers are an extremely tricky investment at a time of slowly declining valuations, especially for a startup that would need to ramp up and cash out before its potential valuation fell below the amount of money needed to launch it in the first place.

But even when he offered to ditch the newspaper aspect of The Green and go entirely online, would-be investors threw Bromberg another curveball. In a meeting with hedge fund manager and Journal Register shareholder Gary Nussbaum, the response to Bromberg's entreaties was, "What a great idea—this is the future of newspapers! Now, go build it yourself and come back when you have some traffic," according to Bromberg. "We must have heard 'the tools are cheap' 20,000 times," he says.

Ultra-lightweight blogging empires and viral phenomena like Flickr and del.icio.us had led VCs to conclude that every entrepreneur should be able to build an audience on the ultra-cheap. Even among purely editorial properties, Calacanis managed to sell his blogging empire to AOL for $25 million without significant angel or VC investment, while Business 2.0 recently concluded that Gawker Media and BoingBoing could be worth as much as $76 million and $34 million, respectively, based on the valuation accorded to Calacanis' and others' sales.

"Every time I've talked to a VC about this, by the time they get to the bit about 'organic traction' and the tools, they wanted us to rub two twigs together and build a bonfire so they'd have a better valuation and we'd have less of the company down the road," Bromberg says. "West coast VCs are much more inclined to do things in the very early stages, but East coast investment in media concepts is at a standstill."

The nadir was a meeting Maxwell attended, where someone on the other side of the table cracked "Don't you have a rich uncle?"

Putting The Green on Ice
These days, The Green is in deep freeze, and Bromberg consented to this post-mortem in hopes that someone whose door he hasn't darkened will send some money his way.

"Do I think there's a place for free newspapers? You betcha," he asserts. "But I don't think that time is now. Because I think the core business rationale behind all the free newspaper startups out there right now is to attack the vulnerable flanks of paid newspapers. If you don't have a backer who wants that tack, you have nothing."

Reached while in Israel, Maxwell emailed some of her thoughts on The Green's inability to break through. "I think that The Green failed to win [investors'] interest due to the perception out there that newspapers indeed are not the 'front end' of 'the engine' any more, but rather that the [Web] is leading the charge with readership…. I do not know exactly what scared anyone away, but it was most likely a matter of perception more than anything else."

Maxwell's thoughts on how to bring The Green to life? "My recommendation for The Green going forward would be—if they can—to try extremely hard to get some financing and not give up on the dream of this 'Green WSJ NewsWebpaper' And yes, put out some blogs that are directly related to The Green.net."

"Loyal followings are great and they do transfer to the written page," she points out. "Though content is king, as ever, to get meaningful traction with such a new paper and concept it would take at least several years of very hard work. I did not and do not feel that Bromberg and his team shy away from hard work. But those first big monies must come in for traction to be gotten. And that has yet to manifest itself."

While this piece was being reported, The New York Times and other outlets reported that the now-AOL blogger prince Calacanis would lead the effort to "turn [the] Netscape site into a newspaper of sorts," according to one headline. "The site is a journalist- and community-driven news aggregation site, much in the vein of Digg and other sites," Rafat Ali wrote at PaidContent.org. "Only, this is beyond just technology, and covers other culture/business/news/social areas. Also, the site is not 100 percent software- and user- driven, but has (for now) eight journalists/anchors looking after the eight verticals, 'curating' the content and doing original stories, as well."

My parallel life flashed before my eyes, and I called Bromberg. "I think it's funny," he says. "I think that Jason is doing...The Green. That was going to be your job," he sighs. "It made me feel good to read that someone is doing it, and it made me feel angry, too."

Greg Lindsay is a freelance writer and regular contributor to mediabistro.com.