News for Digital Journalists

Posts tagged with: Business Models

December 31, 2010

Pew: 18% of internet users are paying (a little) for online news

Despite conventional wisdom, nearly two-thirds of internet users actually do pay for online content—even for news. If your news organization is considering selling premium content or instituting a paywall, new research from the Pew Internet and American Life Project offers useful insight…

According to Pew, “65% of internet users have paid to download or access some kind of online content from the internet—ranging from music to games to news articles.” The most popular types of content or access purchased are music, software, and apps.

Here are more details about media types that news organizations might offer:

  • 21% purchased mobile apps.
  • 18% reported paying for articles from a digital newspaper or magazine; or for journal articles or reports.
  • 16% bought videos, movies, or TV shows.
  • 11% purchased members-only premium content from a site that also offers free content.
  • 10% purchased e-books.
  • 7% purchased podcasts.


Most online content buyers spend about $10 per month; but nearly half of those surveyed reported only buying one or two types of online content. Subscription services tend to be the most popular way to purchase.

Overall, internet users aged 30-49 are the most likely to have purchased most kinds of content—which dovetails nicely with the core audience demographics for many news organizations. However, looking at the 18% of internet users who actually reported purchasing news content, users 29 and younger as well as 65 and older reported slightly more of this activity. College graduates were most likely to purchase online news, as were people earning $75,000 per year or more.

The main takeaway: While paid content appears to be more popular than is generally assumed, so far only 18% of internet users are paying for any online news—and with a typical online content budget of $10/month, they’re not paying much for any kind of digital content. Therefore, blanket paywall strategies probably would serve to kill, rather than cultivate, the revenue potential for a general-interest news outlet.

Premium content strategies do stand a chance when they’re well targeted—which is good news for niche news, special packages, or specialized informational services.

Thinking beyond story-style content may offer new revenue options. Consider targeted digital content packages that involve apps, e-books, videos, and more.

January 04, 2011

Google heats up digital newsstand competition

As print publishers seek new ways to make money, they’re getting more interested in turning to digital newsstands for distribution. New options may be opening in that market in 2011…

Apple already sells digital editions of many major newspapers and magazines through the iTunes store, and Amazon and Barnes & Noble also sells newspaper and magazines subscriptions for users of their e-reader devices and apps.

But on Jan. 2, the Wall Street Journal reported that Google is planning to launch its own digital newsstand, targeted at smartphones and tablet computers running the Android operating system…

“The e-newsstand would include apps from media companies offering versions of their publications for smartphones or tablets running Android, say people familiar with the matter. Google hopes to launch it in part to provide a more consistent experience for consumers who want to read periodicals on Android devices, and to help publishers collect payment for their apps, these people say.”

“...Apple, meanwhile, is readying several changes in iTunes to address publishers’ frustrations with the online store, according to people familiar with the matter. Among the changes, Apple would make it easier for publishers to sell subscriptions on iTunes, in addition to single issues, with Apple keeping 30% of the tab.”

It’s uncertain when and how Google’s digital newsstand might launch—and indeed, it might never materialize. But it’s creating considerable buzz.

The CBS Business Network noted: “This isn’t about a war between Google and Apple, even if it looks that way. It’s about a market that is far more complex than the online market for music was when iTunes launched… The magazine industry comes to the marketplace with the wisdom of history—and a slew of tablets to rewrite it on. Everyone, from Barnes & Noble to Vizio and Lenovo, is launching one. So, while the iPad poses a formidable challenge to any comer, it is not the only game in town.”

This is an interesting market for news organizations to watch, and perhaps to experiment in as a premium service. However, don’t expect that a digital newsstand could be used as an absolute paywall to protect all of a news organization’s content. Free web-based publishing will probably always be necessary to attract a mass audience online, and to support much-needed shareability and search visibility.

But if digital newsstands can offer not just more convenient content delivery (you pay for it once, and it keeps coming to you), but also a superior reading experience (a la Flipboard), that might be a value-add that more readers would be willing to pay for.

January 25, 2011

MinnPost reports first surplus, diverse revenue sources are key

On Monday, MinnPost reported that in 2010 this regional digital news org did better than break even—it actually ran a surplus. That’s right: a digital news startup with a geographic focus has turned a profit…

Admittedly, the MinnPost 2010 surplus of $17,594 (on spending of over $1.2 million) may sound pretty small in comparison to the budgets and profits of established daily news organizations. But that’s not the point.

MinnPost founders Joel and Laurie Kramer wrote: “This is tremendous vindication for our business model, because it resulted from 18 percent revenue growth, not budget-cutting.”

Which is more than most established news organizations can say.

MinnPost’s 2010 annual report notes its diverse revenue sources:

“We ran deficits of $605,000 in 2008, our first full year of operation, and $126,915 in 2009. (We were spending down the start-up funds we raised in 2007.) So it has taken us just three years to reach break-even.

Most notably, our advertising and sponsorship revenue rose 42%, from $217,734 in 2009 to $309,508 in 2010. That’s on top of a 35% increase the previous year. Revenue from individual and corporate donors and from MinnRoast increased a more modest 5%, to $482,190. But in a sign of strong community support, 631 new donors joined the MinnPost family, an increase of 37%, bringing the total donor base to 2,338. And 170 donors gave more in 2010 than they had in 2009.

We launched a new Corporate Leadership Circle in 2010 with donations from the Medtronic Foundation and the General Mills Foundation, to support coverage of issues critical to the future of Minnesota.”

February 09, 2011

Yahoo to launch personalized mobile content platform

It looks like Yahoo views mobile media as a possible solution to its recent struggles. On Feb. 6, the New York Times reported that at next week’s Mobile World Congress in Barcelona, Yahoo plans to announce a new mobile publishing platform which would make it easier for users to get personalized content on cell phones and other mobile devices.

Here’s why news organizations should watch this move…

Yahoo is not offering details about the project prior to the official announcement. However, according to the Times:

“The Yahoo platform aims to draw from a user’s declared preferences, search items, social media and other sources to find and highlight the most relevant content, according to the people familiar with the matter. It will be available on Yahoo’s web site, but is optimized to work as an app on tablets and smartphones, and especially on Google Android and Apple devices.

“The project, initially named ‘Deadeye,’ has been the focus of a team of more than 50 engineers for the last several months. The company is also planning to work with outside publishers, like Hearst, to create third-party apps powered by the same software engine, they said.”

On the personalization front, Mobile Marketing Watch notes: “Although Yahoo! hasn’t enjoyed many shining moments of innovation in recent years, the company has experienced considerable success with its personalization efforts, particularly with regard to its homepage tweaks. As a result, Yahoo! is believed to be heavily banking on a major push toward greater personalized content.”

What in this for news orgs? If Yahoo’s platform works well and becomes popular, it could become a useful distribution channel for news publishers.

It’s likely that Yahoo will serve ads via this platform. What’s unknown so far is whether content publishers might be able to either serve their own ads along with their content, or get a percentage of Yahoo’s revenue for ads served with their content. Since the platform apparently aims to provide full content (not just teasers with links) to users, Yahoo would probably get pressure to strike some kind of ad-related deal with publishers.

Another open question is how well this platform will really work for non-smart “feature phones,” which according to new figures from ComScore still comprise a the vast majority (nearly three-fourths) of the current US mobile market.

Many (perhaps most) feature phones currently in use are capable of web browsing or even running simple javascript-based apps. But so far, news organizations generally have neglected to offer feature phone users a good mobile web experience.

Meanwhile, Yahoo’s mobile offerings (including Yahoo News) are often listed by wireless carriers in the main menus of their feature phones’ browsers—so Yahoo apparently already understands the importance of reaching this huge consumer market.

Feature phone users are especially likely to desire content personalization, given the difficulty of navigating and searching web sites from those devices. If this Yahoo platform makes that easier for consumers, and if Yahoo offers some fair revenue opportunities for news publishers, then a platform like this might be a useful complement to a news organization’s own direct mobile offerings.

The News for Digital Journalists blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

February 15, 2011

The booming data business: Report, conference explore emerging options

News organizations generally don’t think of themselves as data companies, but they are—or at least, most have the potential to develop this business alongside their news and other offerings. A new report and upcoming event from Giga Om could help news orgs figure out where data opportunities might lie, and how to capitalize on them…

>The report Big Data (available to Giga Om Pro subscribers, 7 day free trial) covers the equipment and systems needed to store and manage large databases—or especially complex ones, as might be generated from a content management system and archive of decades’ worth of news stories, or from the web analytics for a complex, dynamic site.

Better data management tools can help journalists and editors analyze or visualize complex issues, especially those buried in unstructured information. It can make your publishing efforts more scalable. And—perhaps most importantly to the news business—it can support advertisers through data, analysis, and services.

These topics and more will be discussed at GigaOm’s March 23 event in New York City, Structure: Big Data 2011. One theme of particular interest to news publishers is how businesses are spinning out separate companies built around their data. The conference is mainly geared toward CIOs and technologists, but news publishers and technology managers might gain strategic insight here.

February 15, 2011

Qualcomm, Opera deal could dramatically boost mobile web audience

Mobile web browsing on feature phones soon may become much easier and more fun, thanks to a just-announced deal that will make Opera Mini the default web browser on new handsets using Qualcomm’s popular BREW MP feature phone platform.

This could be a key breakthrough for news publishers’ mobile strategy…

To give an idea of the scale and speed of this deal, AT&T plans for all of its feature phones to eventually run on Brew MP. These new phones could start appearing in stores in as little as four months.

Feature phones still comprise nearly three-fourths of the US mobile market—and over 90% of feature phones come with a web browser. However, the clunky, limited, slow browsers packaged on most feature phones have been dampening web use in this market segment.

Since feature phones cost much less than smartphones to buy (and for typical monthly bills), and since feature phones are widely available on no-contract plans, they’re likely to remain popular among cost-conscious consumers for several years yet.

More people are accessing more content of all kinds on their mobile devices—but most of this is happening through mobile web browsers, not apps.

A new report from ComScore notes that “Even though applications received much more attention by the media throughout 2010, our analysis in the U.S. ...showed that by a small margin, application usage is still second to browser usage when it comes to the mobile web. For example 36 percent of mobile using Americans ...browsed the mobile web in December 2010, while application access reached 34 percent of Americans.”

It’s generally far easier and cheaper to develop offerings for the mobile web than to build native smartphone apps, with the added benefit that mobile web offerings have a much larger potential audience. The Qualcomm-Opera deal indicates that more than ever, the mobile web might be the best first place for news orgs to focus their initial mobile strategy. Apps are cool—but in a business and market sense, they’re cul-de-sacs.

March 11, 2011

Texas Tribune, Bay Citizen win Knight grant to build open-source news platform

Two leading new nonprofit news organizations have just received a grant from the John S. and James L. Knight Foundation to develop a free open-source publishing platform. The goal of this software, to be jointly developed by the Texas Tribune and the Bay Citizen, is to help other online news organizations engage readers, manage content, and earn revenue…

Knight announced this $975,000 grant today at the South by Southwest Interactive Festival in Austin, TX.

According to Knight: “At the first Knight Foundation gathering of news startups in Austin last spring, organizations revealed their struggles to find a publishing platform that is low-cost to implement, while flexible enough to allow constant innovation in content delivery, audience engagement and fundraising.”

Matt Waite, principle developer of Politifact and now a journalism instructor at the University of Nebraska-Lincoln, tweeted this reaction: “The Knight announcement today is a real opportunity. It’s a CMS with the benefits of a framework. ...It has a generic content model you can inherit and extend all you want, seamlessly integrated.”

The platform, which includes a content management system, will:

  • Manage an integrated library of text, video and audio files.
  • Maximize search engine optimization by improving the way articles are linked, aggregated and tagged.
  • Better integrate sites with social networks like Facebook and Twitter as well as bloggers.
  • Offer membership tools and integration with advertising networks to help online news organizations cultivate new revenue streams.

It will be interesting to see whether this effort will draw upon the large code base and developer networks for existing popular free open-source content management systems such as Drupal and WordPress. Those platforms are already widely used by many news startups, and they’ve attracted substantial module collections and developer communities. New platforms that are built completely from scratch sometimes languish due to a small developer pool and sparse module offerings.

Also, it’ll be interesting to see how easy it might be for existing news sites that have already committed to other platforms to integrate with, or switch to, this new one.

The News for Digital Journalists blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

March 22, 2011

Why “data journalism” is good for the news business

Data journalism—where presenting data in useful, compelling ways becomes “the story”—is a growing part of journalism. In a recent article, UK data journalist and educator Paul Bradshaw explains how it’s also good for news organizations and journalists…

In Data journalism: Is it worth it? (published in InPublishing magazine), Bradshaw notes:

“When Simon Rogers first asked to publish data on the Guardian website, someone asked: ‘Who on earth would want to look at a spreadsheet online?’ It turned out that over 100,000 people would regularly hit the website to do just that. One person’s audit, it seemed, was another’s sticky content.”

Interactive presentations of data—from searchable databases to interactive data visualizations and more—have become a proven way to drive traffic and increase audience engagement. Unlike story-format news content, this traffic spike often lasts not just for a day or a week, but for weeks, months, or even years. And high-traffic pages mean higher ad rates.

Data journalism also includes data about journalism—and about any other kind of content that news organizations publish. This represents still more news business options.

Bradshaw recommends that news organizations create Application Programming Interfaces (APIs) to distribute structured data about their content, so that others can repackage it or create a mashup by adding data from other sources. APIs attract the attention of programmers, who can create new and innovative data-based tools, experiences, or services that news organizations can implement—and which can be another channel for advertising or other revenue streams.

Bradshaw notes that the Guardian offered “Hack Day” events where programmers collaborated to develop products based on Guardian APIs. These events “led to all sorts of outcomes from personalized mobile editions, applications which would alert people to events and route them to the location, even a tool which suggests recipes based on an image uploaded by the user. The Guardian says they benefit from ‘being able to reach new markets that we might not otherwise find. We grow our vertical ad network through high quality partners [taking part in hack days]. We’re also able to offer our end users innovative, clever and useful interactive services provided by experts outside of our domain.’”

Bradshaw’s article also discusses other opportunities for news organizations to offer data-supported or data-focused services. This insight is useful for developing new business strategies—since in an age where news and other content is ubiquitous, it’s far easier to sell services than content.

April 21, 2011

News.me launches social news aggregator with pay model, access to others’ streams

An entrant with a strong backers and a unique business model has joined the social media news aggregation race, with the launch today of News.me, a Twitter-based iPad app that lets viewers experience not only their own custom curated news stream, but the news streams of friends and prominent figures as well.

The app, developed by the parent company of bit.ly in collaboration with The New York Times R&D Lab, uses artificial intelligence to serve up a stream of stories likely to be of greatest interest to the reader, based on the links recently shared by the people they follow on Twitter. The stream is filtered both for popularity and for what the reader has read or shared before.

At the same time, users can see similar streams of news most likely to be interesting to other News.me users, based on who they follow or read - described by the developers as the equivalent of looking over someone’s shoulder while they check their Twitter stream. The app suggests “featured users” like VC Fred Wilson, Digg’s Kevin Rose and AOL’s Arianna Huffington.

There’s a detailed description of how News.me works on the site’s FAQ.

News.me is one of a series of apps in the space, including another, called Trove, launched Wednesday by the Washington Post and detailed here by GigaOm’s Mathew Ingram, who writes of the quest for “The Daily Me” by various players including Flipboard (which has raised $50 million), Zite and others.

Much of the Twitter traffic about the News.me release today focuses on the business model for the new app. In contrast to free services, it has a pay structure - it costs 99 cents a week to use, or $35 for year. Also, importantly, the service has licensed with more than 20 publishers, other than the Times, to package their stories - among them the Boston Globe, the Associated Press, Forbes, Fast Company, AOL News, Gawker, GigaOm, Mashable, ReadWriteWeb and SB Nation - some of whom are seen as not always hospitable to aggregators.

Each of the partner publishers gets a revenue share (depending on how many times users read an individual article from their site), plus enhanced presentation options and promotional opportunities.

What do you think - is the pay model likely to work for aggregating what is largely free content? Is the “over-the-shoulder” stream a killer app? Will News.me’s more spare visual approach win over news users from Flipboard, despite that service’s head start? Let us know your experience with this and other social media content aggregators like Zite or Pulse in comments below.

The News for Digital Journalists blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

April 22, 2011

Amazon crash knocks out some news sites: Lesson learned

This week, many popular digital media sites and services were knocked offline or significantly hampered when Amazon Web Services crashed. Resulting outages at Foursquare, Quora, Reddit and other major social media services got the most attention—but also affected by the outage were parts of the New York Times, the Denver Post, Everyblock, and other news operations.

Does this mean cloud computing services are a bad idea for media sites? No…

Cloud services still offer three main advantages over running your own data centers. They allow organizations to:

  • Flexibly, quickly scale your hosting up or down as needs and traffic warrants.
  • Reduce your risk of downtime or data loss by being able to shift hosting or services to alternate data centers in the cloud network
  • Save money, staff time, and other resources that managing your own data center entails.


But no hosting solution is perfect.

Over at PC World, Jon Brodkin interviewed Gartner analyst Drue Reeves about the recent Amazon Web Services crash:

“Anytime there is a cloud outage, some will call into question all cloud computing. That shouldn’t be the case, Reeves said, noting ‘everybody has downtime.’ The difference with cloud computing is that we’re aggregating risk—many companies run their sites on one platform and when that platform goes down it’s a lot more noticeable than when a single company’s internal data center fails.

“While a single cloud failure shouldn’t be seen as an indictment of all cloud computing, Reeves says it does add a new wrinkle to the economic analysis that must be done before enterprises move services to the cloud. If companies run major businesses on top of Amazon, and suffer millions of dollars in lost revenue when there are outages, was the money saved by not building IT services internally worth the risk? Can customers buy insurance to recover lost dollars?

“Service-level agreements may provide payments or credits, but if an outage ‘costs people tens of millions of dollars [in lost revenue] Amazon’s not going to pay that back, Reeves said.”

Brodkin’s article explores the pros and cons of various hosting redundancy options. It’s worth reading, and passing along to your organizations chief of information technology.

Expect that your site WILL go down at some point. It’s just a fact of digital media.

Having a strong presence in a variety of social media is a good way for media organizations to continue to communicate with audiences during a site outage. While any one social media service can go down, it’s unlikely that all of them would go down at the same time. Social media is also a way to keep publishing important news and updates until your site gets up and running again.

The News for Digital Journalists blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.

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