News Leadership 3.0

Posts tagged with: Inn

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.

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

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