News Leadership 3.0

March 14, 2012

Public interest news start ups: Few answers but the right questions are coming into focus

In experimentation with online public service journalism, there are few set answers about how news providers can be sustained. But a new report from the Investigative News Network goes a long way in detailing what we have learned and in defining the questions that start ups - and funders - need to ask as they shape and launch their ventures.

Audience Development and Distribution Strategies,” is a rich source of information about engagement, distribution and revenue tactics of INN member sites. (Read the section titled “What will you find? on pages 9-10 of the pdf for a summary.)

The report describes a highly challenging environment: “Our movement has become a viable force in the production of independent reporting focused on the important stories that commercial media cannot. In fact, INN members are 100% focused on consistently producing this important and expensive content. That said, these are tough economic times and the models to support journalism - in both the commercial and nonprofit sectors - are in flux.”

Against the backdrop of flux, hundreds of news innovators are trying to figure out how to marry a mission of public service news and information with a business model. I encourage anyone who is operating, thinking of operating or considering funding a news start up to read this report. For a more general understanding of the landscape, I highlight these points:

- While foundations have contributed heavily to launching many of these experiments, continued foundation funding is far from likely, at least not in the amounts that will be needed to assure a robust public watchdog function. I think we may see increasing definition and understanding of what types of news operations the market will support - small, local, advertising based news sites, for example - and what types will need continued foundation support - probably the high-end investigative sites whose work generally is highly consistent with the work of foundations in driving civic improvement. image

- From the outset, it is critical to assess different revenue streams and funding models. The report describes four types of sites (Start-Up Shop, Topic Specialist, $ Million Plus, and Community Driven) and how they might tap into funding streams including distribution deals, donations, membership programs, education programs and advertising or underwriting. See pages 29-32 of the pdf. The graphic shows   how the “Community-Driven News” model starts, like most others, with heavy foundation support and then grows revenue from memberships and donations with smaller streams from underwriting and distribution deals. (I am very skeptical about the potential for significant revenue streams from membership for most sites, even in five years.)

- Data and topic expertise may pose revenue opportunities for news organizations. As well, organizations may be able to do a better job of packaging their content for wider distribution. “The next phase of report once, publish everywhere is optimizing your content for the right distribution channel. Whether that means localizing a national story to a region or creating a video presentation of a 3,000-word investigative piece, journalists need to become more willing to take charge of the packaging and bundling of their content for different channels.”

- People who are planning a site need to look beyond producing journalism, starting with an assessment of the marketplace. “You shouldn’t start one of these if you are just a journalist looking for a job,” one interviewee told the report’s authors. Steps include identifying stakeholders, defining audience and developing a value proposition. “In consulting with journalists looking to build new news organizations, we often try to pull back the lens, coax out the distractions of important stories and product features, and instead focus on the broader mission of the journalism they do and its desired impact,” the report states.

This report makes a significant contribution to understanding in a highly dynamic and confusing field. At the same time, it underscores a key challenge: There are numerous, highly diffuse models and missions being tested each with different implications for revenue strategy and tactics. My own list of promising news sites (currently off-line for a site rebuild) started two years ago with four admittedly broad categories of independent online start ups (New Traditional, Community, Micro and Niche) and I’m adding at least three more, including Investigative, as the field grows and becomes more diverse.

The report also offers sobering context about the fragility of any new ventures, including the emerging news organizations:

The explosion of nonprofit news sites bodes well for innovation in the industry. But it’s unlikely that all of these organizations will find a path to sustainability. For some perspective, approximately 75% of nonprofits registered in the United States fail in the first year. Although many reasons are cited, some of the most common include: * Lack of planning * Over-expansion * Poor management * Insufficient capital * Poor diversification of funding These factors are similar to new small businesses, 50% of which fail in the first five years, according to the U.S. Small Business Association.
This blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

February 11, 2010

From Chicago: A snapshot of online news experiments

Despite the demise of Chi-Town Daily News last year, Chicago enjoys a lively news environment. Chicago’s experiments may help us understand and shape an emerging new media landscape.

I interviewed operators of three Chicago online news sites - Gapers Block, Windy Citizen, and Chicago Talks - recently and found the mix of content and revenue ideas worth following. I’m adding several Chicago sites to my list of promising online news sites.

Gapers Block

Led by Andrew Huff, this site is aggregates and offers original content, mostly from about 80 volunteers (professional journalists, other professionals, students and others), edited by eight professionals who receive small stipends.  It is expanding its original offerings with a grant from the Chicago Community Trust.

Gapers Block, Huff says, is a Chicago expression for “rubbernecking” or stopping to take a look.

“We’re pulling out the news you may not have seen. We cover in brief ways the big stories of the day. What we really like to do is cover the stories that got buried and you have missed and bring them to the forefront. We’re trying to send people other media,” Huff said, who founded the site in 2003 after an unhappy stint in public relations.

The volunteer writers stick around for about a year, Huff said. The site relies on advertising revenue and Huff draws a small salary.

“We’re are a pretty collaborative effort. It’s a pretty flat structure. I’m writing constantly for the site so it’s not some guy up on high. Because we have such a good reputation in the media and in organizations we cover, (writing for the site) attractive. It’s a little bit of cachet to say you write for Gapers Block.”


Windy Citizen

This site, founded in 2007 by Brad Flora, aggregates links to the interesting stories of the day.  Flora and two interns prime the site. It has an engaged community of users who vote stories and comments up and down. User votes play a significant role in determining what stories rise to the front page of the site.

Advertising is the main source of revenue and Flora says the site makes $5-10,000 a month. In August, he hired two part-time advertising sales people. He thinks he needs to double or triple his user base to be a sustainable business and is using grant funding to improve his content management system to support more users.

Flora believes his two core user groups are attractive to advertisers - Young people in their 20’s or early 30’s who like the off beat news and 50-60 somethings who want a place to discuss politics.

In general, Flora says the discomfort journalists experience when trying to make money holds many sites back.

“The sites are too small. They are run by people who are afraid to ask for money. The journalism curse. My plan was to get big enough that I could attract someone mean enough to sell advertising. Journalists are not comfortable doing that. They can make a fine product, but they’re under pricing advertising, they’re not very good a presenting it, at working the phones. These are all things I struggle with personally.”

Flora also says he’s encouraged by the second wave of large non-profit news organizations such as Texas Tribune who are coming on line with the know-how to raise money.


Chicago Talks

This site draws most of its content from Columbia College students. The school provides support including editing by faculty and grad students.

Site content focuses on original news that others aren’t covering and aims to produce at least five original stories a week. Suzanne McBride, associate chair of Columbia’s School of Media Arts, said content is fairly traditional and consists of news, not opinion.

McBride said the site turned primarily to students after finding citizen contributors were difficult to rely upon on a consistent basis
.
With expansion grant funding, the site will pay teenagers and provide them with transit cards to report on the Austin neighborhood, one of Chicago’s most challenged.

McBride and Columbia College’s Nancy Day said the site ultimately must create an advertising revenue stream, which may prove difficult in neighborhoods such as Austin that have low income residents and relatively few commercial operations to form a pool of potential advertisers.


Chicago News Cooperative

While I did not interview anyone from the Chicago News Cooperative during my visit, I’d be remiss not to mention this newcomer. Funded by large start up grants from several foundations, the CNC employs professional journalists who focus on politics and policy in the Chicago metro area. It provides content for The New York Times Chicago edition two days a week. Launched in October as a not-for-profit, it fills the role of a traditional alternative to established newspaper organizations. The site promises to “introduce novel ways to connect the community with our news room in a two-way exchange of information.” I asked founder and editor James O’Shea via e-mail to elaborate on that and I’ll report back on what I learn.

(Disclosure: All four of these operations recently received expansion grants from the Chicago Community Trust as part of the Knight Foundation Community Information Challenge. I was on the CCT review panel as a consultant to the Knight Foundation.) Knight is opening another round of the competition and you can apply here.

None of us knows what models for providing news and information will survive. But I think these four sites—three of which have found very inexpensive ways to create content and attract a community of users and one that is attempting a focused professional model—underscore the idea that a diverse mix of media may serve the information needs of communities rather than one large institution.

For more information about the news ecology of Chicago, check out this study commissioned by the Chicago Community Trust, “The New News: Journalism We Want and Need.”

Please join the conversation about online news start ups and new models for news. If you have suggestions for my list, please add them in comments below. You’ll find my list of promising sites here and the criteria for the list here.

(This is cross posted in the Reynolds Journalism Institute blog.)

December 01, 2009

The amazing chaos that is news

Here are five types of emerging news organizations. Help me refine this and build a list of examples.

Very little is certain about the online news experiments we’re seeing except their stunning diversity and verve.

imageLast month, I spent two days talking to start up owners in Seattle and another day at J-Lab‘s New Media Women Entrepreneur summit in Washington, DC. I also coach news startups as a consultant to the Knight Foundation and here at Knight Digital Media Center. All of this has spurred a lot of thinking on my part about how the Reynolds Journalism Institute, where I am a fellow, and others can help these start ups.

It might help to categorize them and build a list of them that may offer lessons in content, civic engagement, transparency and sustainability. I think it’s a good way to bring some order to a chaotic young universe and elevate a conversation that often pits old media against upstarts in the blogosphere. This lis may also help identify strengths and areas where news sites might need help.

So here’s a first run at five categories. I acknowledge the overlaps at the outset as well as the exceptions.  I hope you’ll help me identify gaps and suggest more examples.

1. The bigs. Although not typically as big as a major metro or regional newspaper, these sites tend to have multiple reporters and editors and their aim is to produce highly professional content. Examples: MinnPost, Voice of San Diego, and The Texas Tribune. Although not strictly a start up, the online-only Seattle Post Intelligencer might fall in this group.

What do they need most? A revenue model. Most started with help from philanthropists and foundations. They are strong players in journalism but their financial future is uncertain. What can we learn from them? The value of focus. Unlike general interest newspapers, these sites tend to focus heavily on just a few important topics rather than trying to cover the entire playing field. For example, Voice of San Diego stresses coverage of housing, education, environment, economy and local government and politics, science and public safety, and doesn’t spend much time on other topics.

2. The local news entrepreneurs.
Many of the online news start ups, large and small, are entrepreneurial. In my book, the local news entrepreneurs are small local start ups that are heavily focused on finding a workable business model for their news ventures. They often diversify, mixing tech services and platforms with their local and neighborhood news endeavors. A couple of examples from Seattle:  My Ballard, Capitol Hill Blog, Oakland Local is another highly entrepreneurial venture that also makes community-building a priority (which means it could fit in category #3 as well).

What they need most: Caffeine. What we can learn from them: The value of Web and tech expertise and business diversification. My money is on these folks to figure local news out for the rest of us.

3. The community lovers. These folks see news and information as a vehicle for strengthening their communities. They often fill gaps left by legacy media but they do not see themselves are a replacement. They are the most likely to have non-professional contributors, although many do hire journalists. Many have received start up funding from Knight Foundation and other foundations but are looking for revenue models. Example: TheRapidian. What they need most? Many need help learning best practices of accuracy and transparency and managing citizen contributors, as well as navigating the Web and social media. What can we learn from them? The value of listening to, understanding and engaging community as the right thing to do and make money.


4. The niches. I’m thinking here about topic or service niches as much or more than than geographic ones. Like the entrepreneurs, these are often focus heavily on developing a business model. Many are journalists who have left traditional news organizations in recent years. Examples: Julia Scott’s BargainBabe and Elaine Helm Norton’s NW Navy News, which is both local and niche.

What they need most: Business expertise. What we can learn from them: The power of depth, branding, and how to connect with users.

5. The personals. These are the persona-driven sites and blogs that typically do not have large followings or much expectation of impact (which is not saying they don’t have value). Most turn over quickly. What they need most: I’m probably over generalizing here but I think these sites will largely do what they’re going to do without much help. What we can learn from them: The power of branding.

You’ll notice I didn’t separate for-profit from nonprofit models and I didn’t separate those who use user content and those that don’t. Those are both important distinctions in the old world, but they will blur over time. Shared interests trump differences.

Have I got the right categories? Please suggest additional categories or distinctions in the comments. For example, should ethnic media be one category or do other site features matter more? (Many in the ethnic press are both entrepreneurial and community-loving, but are only now moving online.)

And please help me build a list of the best sites. I’ll write about criteria for the list later this week.

 

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October 22, 2009

At Slate, small is the new big

Editor David Plotz sees a future with a smaller, highly engaged audience for the online magazine

I took heart from a talk this week by Slate editor David Plotz, who suggested a viable revenue future for his online magazine lies not in its approximately seven million unique visitors but in about 500,000 loyal, engaged users who want quality, long form journalism.

Plotz spoke at the Missouri School of Journalism, where I am a Reynolds Journalism fellow this year. Missouri awarded Slate an Honor Medal this year.

More sophisticated ways of measuring usership and engagement will change focus from mass audience, Plotz believes, and that will make journalism better. Raw numbers create “pressure to produce one kind of story” that will draw hits. New metrics of engagement and behavior offer a “tremendous opportunity for Web journalism to escape the traffic” trap. He believes that will liberate Slate to “make a magazine that recognizes those dedicated readers.”

“Until now we’ve been selling to the mass audience. Now once you have this abiltity to target you can really target your core audience… This creates strong incentive to create durable journalism,” Plotz said. “That one curious reader is worth 50 times the value of the drive-by reader. The person who makes a commitment to your brand, if you’re a quality brand….. if you can get those readers, a smaller set of readers, who come to you three or five or 10 times a week, you don’t have to go after that huge other set of readers.”

So forget celebrity and outrage stories. For Slate, this focus means a commitment to long form journalism such as a recent series on the American dental crisis, which Plotz estimates was read by 400,000 people. Slate has started a “Fresca Fellowship” that requires each reporter and editor to spend a month each year on a long form journalism project. Advertisers have begun to sponsor specific projects and they are paying for themselves, he said.

“Advertisers want to be around some ambitious project more than they want to be around some snarky political column,” Plotz said.

While excited about this new opportunity on the Web, Plotz cautioned Missouri journalism students that they face a career path that will require them to know more than journalism: social media, audio and video production, even some coding and fluency with content management systems. The new journalists may have to fight for time away from breaking news to focus intensely and develop projects.

Plotz thinking about a smaller engaged audience is similar to what could emerge in local news markets as news organizations pay more attention to small, under served advertisers. Serving up big numbers of unengaged users won’t ultimately help these advertisers. Developing loyal, engaged user communities holds more promise.

What do you think? Are mass metrics on the way out in your news organization? What are you measuring as an alternative?

 

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ABOUT THIS BLOG

Exploring innovation, transformation and leadership in a new ecosystem of news, by journalist and change advocate Michele McLellan.

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