Several weeks ago I read an article in Forbes called Owning The News, which introduced me to Global News Enterprises (GNE), a news company that plans to launch in 2009. Provided their funding is intact, they have picked one of the best times in the past 50 years to launch a new news organization.
I asked the President and CEO of GNE, Philip Balboni, if he had time to answer a few questions about the company and his plans. Luckily for all of us, he said yes.
Here are my questions and his answers about the business hurdles GNE is likely to face:
Jason: The Forbes article quotes some depressing statistics about US reader interest in foreign news. What makes you confident that the market is there?
Philip: We don’t see those statistics about foreign news as depressing for our business model. We see them as an opportunity for a US-based news organization to carve out a niche by providing solid original reporting from around the globe.
There are fewer and fewer outlets providing coverage of international events and issues while the consequences of globalization have increased the significance of those issues for America, from Wall Street to Main Street. This has been acutely obvious during this recent financial crisis. A recent Pew report indicates that almost 65% of American newspapers have given less space to foreign news in the last three years.
I don’t think the need for quality reporting on international news and public affairs issues has dropped. There are scores of millions of people out there who do want it, but are getting fewer choices every year. I think we are stepping in at just the right moment.
Jason: Do you see a lasting business model in syndication, or will the internet kill the usefulness of the “reprint”?
Philip: I think, in many ways, the Internet is all about syndication. Where many legacy content creators fell behind the curve was by trying to trap their audiences on their Web sites, but we understand that wide content distribution isn’t dilutive, it is additive.
The challenge, of course, is figuring out a way to monetize it. We are offering newspapers and websites here in America, as well as English language dailies across the globe, the opportunity to take our original reporting and make it part of what they offer their readers and users, based on their deep knowledge of local interests.
In northern California, that may be heavily Asian and Central American influenced from the enormous influx of peoples from those lands. In the Upper Midwest, it might be oriented to the earlier waves of immigration from countries in Europe. We let the local editors decide what is most important from our rich and broad menu of content.
Our syndication offer is highly attractive, very reasonably priced and has gotten a strong initial reaction from newspapers. At the end of the day, we are convinced that there is revenue to be generated from quality journalism. And I am confident that when people visit GlobalPost.com, they will agree and make us a regular stop on their own daily newsgathering.
Jason: Foreign offices are known as some of a newspaper’s largest expenses. How do you plan to keep those costs manageable?
Philip: GlobalPost isn’t opening any foreign offices—it is cost prohibitive and we know from watching the newspaper business that the model doesn’t work. But, through the extraordinary vision and efforts of my partner Charles Sennott, an acclaimed foreign correspondent, we are creating a network of experienced journalists who live and work in the countries they cover.
He’s just returned from a recruitment tour of Asia, where we were once again encouraged by the quality of journalists that we’ve been able to attract to our team. It’ll be a lean organization managed from our newsroom in Boston with a top notch editorial and executive staff.
Our model is unique in that it leverages what has happened with the closing of so many foreign bureaus and offers correspondents an opportunity to help us build our company by giving them an ownership stake in addition to a monthly cash retainer.
We are going to carefully manage our expenses by being lean, by leveraging technology, and building a cost-effective infrastructure that can accommodate and sustain long term organic growth.
Jason: How do you plan to use newer media in your reporting? Will there be any emphasis on video or interactive content as opposed to standard, written articles?
Philip: New media will be front and center for us and we’re equipping all our correspondents with light, easy to use digital video cameras.
We understand the power of video, still photography and audio. They are a great traffic driver, but we will most importantly focus on great story-telling and in that the written word continues to be of paramount importance especially in providing true depth and context.
We’ll be working to find the optimal mix for our users.
Jason: What do you know that most newspapers don’t? Why can you make news profitable when companies like the New York Times apparently can’t?
Philip: Well, first of all, the New York Times is a great newspaper and I would not count them out by any means. It is an understatement to say that we are in a moment of change for the newspaper industry because the way people consume news has changed so dramatically.
Many mistakes have been made. Some may be fatal to traditional media outlets, but others will survive and grow stronger. For GlobalPost, the important thing is that we have no legacy media entanglements, no legacy costs, no printing presses or fleet of trucks.
We can harness the enormous distribution power of the internet – the most powerful yet in human history – to build our business from the ground-up as a purely Web-based news organization.
Obviously, this comes with its own set of challenges but it gives us the platform to reach out to people who hunger for knowledge about the world and who want to be connected to others who share the same interests and concerns.
In a way, media’s old guard and its new players like Politico and GlobalPost are all betting on the same thing: that quality journalism has value and that there will always be demand for it. And that’s a bet which I and my colleagues more than willing to take.
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Eat Sleep Publish is a Seattle-based blog that explores the difficulties and opportunities currently facing the publishing industry. 
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