October 11, 2010
Post BxB2010 Roundup: Patch, Revenue, Efficiency
Block by Block: Community News Summit 2010 connected online community news publishers last month, and some of those conversations are continuing online. Here’s a roundup up key blog posts and conversations:
Stay Off My Patch
Many online community publishers look at Patch, AOL’s entry into the local news ecosystem, with a mixture of fear, loathing and resentment. Who can blame them? They’re struggling to keep the content flowing and find a revenue, and here comes Big Foot marching toward their patch. Still, competition is a fact of business and posts by two community news publishers offered fresh perspectives on Patch.
In “Patch: Scared Yet?” Sacramento Press co-founder Ben Ilfeld argues that Patch and other entries into the local news community are not necessarily threats. “Patch represents a huge ally of local and hyper-local sites. For one, more local media is welcome in my world. There still is not enough coverage. In addition, Patch does pay editors. This keeps good journalists working local beats. We can all applaud that. The fact that Patch is well funded means it can experiment with new models of journalism and with new business models without fear of immediate failure. All of this is wonderful. None of this scares me,” Ifeld writes.
Howard Owens, publisher of The Batavian, also argues against Patch-bashing in “How to Beat AOL’s Patch.” “Because Patch is owned by a behemoth company, it has weaknesses that can be exploited by the the local site owner,” Owens writes. Those include the ability, as a small operation or sole proprietor, to undercut Patch on advertising rates and salaries, he says.
“If you’re in business for yourself—whatever your business—you also need to understand the concepts of competitive advantage. You need to be able to quantify your competition’s strengths and weaknesses and align your business strategies not to try and defeat your competition at its strongest point, but rather exploit your competitors weaknesses.”
Show Me The Money
A group of journalism students in Rich Gordon’s journalism innovation class at Medill are posting a series of interviews with online publishers who attended Block by Block. At my request, the students focused on revenue models. The series began last week and is continuing this week and next.
Taken together, the posts illustrate that no single revenue stream is going to support local news and perhaps no one combination of streams will work even for similar local sites in similar communities. EdHat mixes advertising and subscription revenue. Oakland Local sees a future in ads, grants and training. I-News Network is launching with grants and expects to develop other revenue streams. (BTW, Rusty Coats gave a good overview of revenue streams for local news sites last week at KDMC’s Knight Community Information Challenge Boot Camp. Find it here).
A detailed report from J-Lab on the track record of its New Voices grantees further fueled the discussion about how to make local news sites sustainable. “New Voices: What Works” underscored the fragility of born-on-the-web community news in its infancy.
Still, I don’t entirely agree with the report’s assertion that “Community news sites are not a business yet.” Instead, I think the report shows that the sites funded by the New Voices (Knight Foundation-funded) program have generally not established themselves as businesses. First, that’s not what they many set out to do. Instead they were focused on serving community information needs via a volunteer model. Some realized late in the game that they needed a revenue plan and lacked business expertise. Finally, the small size of the New Voices grants ($25K over two years) pretty much guarantees that a new site cannot bring in business expertise.
New Voices has played a valuable role in fostering experimentation around community news - about what works and what doesn’t. If you read the entire J-Lab report, you will learn a lot about the local news landscape. But people like me who study the wider field and people who approach news as a business, like Howard Owens and Ben Ilfeld and others who attended Block by Block, will tell you the New Voices grantees do not reflect the larger field.
As Owens said in a recent post: “Content is cool. Revenue is an after thought.’’ does not make a business model.
Efficiency Index?
On the cost side, David Cohn, the Spot.Us founder who is a fellow at the Reynolds Journalism Institute this year, posted The Newsroom Efficiency Index - What is Yours? Can It Even Be Measured?
Cohn focused on the cost per reader for his index. To illustrate, he cited the SF Public Press, operating on about $70,000 a year to say the site spends about .48 cents to acquire each reader,or unique visitor. By contrast, The Bay Citizen has an operating budget of over $5,000,000 a year or up to $2.2 to acquire a reader, depending on their traffic.
While I don’t think we’ll ever get (or need) agreement on the cost of news, Cohn’s post suggests to me that there is room on a diverse spectrum for different cost categories. From the high end to the smaller, lean organizations.
What Block by Block and the ensuing conversations have shown me is that we have a lot to learn from the little sites.
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Tags: knight foundation, rji, david cohn, block by block, howard owens, sacramento press, the batavian, ben ilfeld
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