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 03, 2009

Más fuertes juntos

In a guest post, Craig Matsuda describes a new alliance between two Spanish-language media companies - and how it started at a Knight Digital Media Center training session


Craig Matsuda, a longtime editor at The Los Angeles Times and now a consultant, coordinated Knight Digital Media Center’s June conference, “Transforming Ethnic News Organizations for the Digital Now,” in partnership with New America Media, the McCormick Foundation and the Knight Foundation. I have asked Craig to follow up with program participants in a series of guest posts. Today’s post: Stronger together

By Craig Matsuda

Ethnic media organizations, like many start ups, may struggle with the twin challenges of getting the business to that next level of success and overcoming a sense of professional isolation.
But a fortuitous meeting at a recent Knight Digital Media Center program has resulted in a new deal that will give Atlanta Latino, an up-and-coming,  Spanish-language multimedia company, a big boost in a partnership with Impremedia, a top U.S. national Spanish-language news and information company.

The two organizations will share share content and business resources in what executives of both call a “model” and a “win-win” arrangement that will benefit not only the two businesses but also their audiences.

For the thousands of relatively affluent, educated and youthful Spanish-speakers who read the Atlanta Latino in print, online and on mobile devices or who follow its television programming on YouTube and Telemundo, the new deal gives them deep, rich news coverage of Hispanic communities nationwide in places like New York, Chicago and Los Angeles.

For the millions of Spanish-speakers who get their news and information online, in print and through mobile devices from ImpreMedia and its 27 properties, such as La Opinion in Los Angeles or El Diario La Prensa in New York, the new deal gives them unprecedented coverage of one of the fastest growing Latino areas in the nation - Atlanta, Georgia and the Southeast.

“This is a win-win deal because it gives ImpreMedia a new footprint in an important market they weren’t in before, and for us, well, it gives our audience the national perspective on issues key to them - everything from immigration to sports—in a way we couldn’t offer before,” says Atlanta Latino publisher Farid Sadri. “Plus, for us, we’ll now have access to new resources, such as national advertisers, that we couldn’t tap.”

Arturo Duran, CEO of ImpreMedia Digital, hailed the partnership with Atlanta Latino, saying it provides a model for his company’s evolving strategy to work with others to increase the flow of news and information while keeping costs low and the returns for all parties high.

“We see ourselves helping to build and bring together communities,” Duran said. “We’re getting excellent coverage of one of the fastest growing Latino markets in the country and we’re not having to build it ourselves. Meantime, we think we can help Atlanta Latino with our national footprint, our advertising, business and technology resources. It’s a sharing relationship that benefits everybody and it’s something we’re expanding elsewhere. “

Both parties emphasize that they’ve entered into an alliance, not an acquisition.

In concrete terms, the recently redesigned Atlanta Latino web site home page, for example, carries a sizable, interactive box with tabs that can be clicked to link to headlines, stories and other content from ImpreMedia’s New York, Chicago and Los Angeles coverage; in print, Atlanta Latino can carry any stories in Spanish from ImpreMedia publications.

ImpreMedia, meantime, links to Atlanta Latino and its content, just as it does with its own properties and those of its McClatchy partners. Duran said his company will be selling to advertisers its expanded reach, especially into burgeoning markets like Atlanta; he says ImpreMedia is scouting for similar alliances with other Spanish-language outlets in fast-growing markets with the savvy demonstrated by Sadri and his editor-wife, Judith Martinez.

Duran was a speaker at the KDMC session last June and Sadri and Martinez were invited participants. Building on what they learned in KDMC sessions, the couple say they have in some hectic months: redesigned their web site to make it easier to view and navigate, as well as to increase opportunities for advertisers; added new technologies to reach their audiences via cell phones and other mobile devices; launched a presence on social media with both Facebook and Twitter; and improved their site video, both with YouTube and with partner Telemundo, so that Martinez’s Spanish language television show can be more easily and widely seen online.

They’re also keeping firmly in mind the strategic plan they developed for Atlanta Latino in the KDMC sessions - and they’re carefully measuring, analyzing and reassessing their efforts.
“These still are tough times, economically,” Sadri said. “But, even with the natural ups and downs, we know that our analytics tell us that our web traffic was up 3.9% last month over the previous month. So we think our hard work is just beginning to pay off. We’re trying a lot of new things. But we’re excited because we can see that they’re starting to really work.” 

August 06, 2009

Entrepreneurship 101: Making money as a blogger

In a guest post, entrepreneurial journalist Julia Scott of BargainBabe.com, asks seven questions bloggers need to ask themselves when they decide to pursue revenue

Julia Scott is an entrepreneurial journalist, professional speaker, and blogger at BargainBabe.com, which helps people save money on everyday expenses. She just launched a second site, BargainBabeLA.com, which helps Angelenos save money using Google maps. Scott was a fellow in Knight Digital Media Center’s News Entrepreneur Boot Camp in May and I’ve asked her to write an occasional guest post about her adventures in creating BargainBabe.com.

By Julia Scott

The first question I get when I tell people I am a professional blogger is, how to you make money?

More and more journalists are grappling with this question as news gathering professionals leave mainstream news organizations and start their own blogs and websites. But the question we should ask is, are niche sites viable?

Maybe.

In theory, niche news websites make money by cultivating an audience that is the polar opposite of a typical newspaper audience. Newspapers offer advertisers volume, while niche sites offer passion. That means niche sites have fewer potential advertisers, but they deliver access to a highly targeted audience, which advertisers, in theory, will pay more to reach. Advertising is not the only money-maker, but it is one of the easiest ways to produce revenue.

In practice, the viability of a niche site starts with these seven factors.

1. How do you define profitability?
If you have a lavish lifestyle or are used to six-figure, old media salaries, your expectations may not jive with the reality of online sites.

2. How big is your audience? Even niche sites need a critical mass of readers. At the minimum, you need a few thousand eyeballs daily to be taken seriously.

3.  How passionate is your audience?
Comments, bounce rates, forum posts, average time spent on your site, and tips gauge how passionate your readers are about your site. The more involved they are in your site, the better off you are.

4. How commercial is your subject?
A site devoted to knitting will never have the advertising potential of one devoted to shopping. Subject matter is particularly important to journalists who cover weighty subjects that get little traction with the public. Advertising revenue may not be a reliable source of income for some sites, which need to be even more creative about revenue streams.

5. How creative are you with your revenue streams? Diversity is not just good, it’s crucial. In addition to multiple types of ads consider white papers, speaking gigs, sponsors, books, donations, events, freelancing, syndication, email lists, membership drives, and product referrals. Don’t bank on paid subscribers.

6. How much time does the job take?
Are you able to keep your site fresh and your audience happy in 4 hours a day? 16 hours? Is your site popular enough that aspiring writers will share content for free? Are you technically savvy enough to do basic maintenance? Do you have friends or family to help with technical meltdowns and crises?

7. Is the site your main gig or a side gig?
Having time to build up your site while not needing it to pay your bills is ideal. On the other hand, being under the gun to make it work provides motivation.

There are no black and white answers to these questions, but answering them is a good start to figuring out whether your niche site can be viable.

More guest posts by Julia Scott:
Entrepreneurship 101: Use the free stuff
A news entrepreneur lives her obsession and makes it pay

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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.

Get in touch with Michele at .(JavaScript must be enabled to view this email address).

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