Turning local news into a service business
Increasingly, it looks like relying too heavily on advertising isn’t such a good long-term prospect for established daily local news organizations. So what’s next? It’s always been easier and more lucrative for news organizations to sell services (primarily advertising) than content. Some new research from Pew, and the new Community Information Toolkit from the Knight Foundation, might point the way to new types of services that news organizations might help create and sell. But this would require a radical rethinking of what the local news business means…
Increasingly, it looks like relying too heavily on advertising isn’t such a good long-term prospect for established daily local news organizations. So what’s next?
It’s always been easier and more lucrative for news organizations to sell services (primarily advertising) than content. Some new research from Pew, and the new Community Information Toolkit from the Knight Foundation, might point the way to new types of services that news organizations might help create and sell. But this would require a radical rethinking of what the local news business means…
By Amy Gahran
In his Feb. 27 post, The Publisher’s Dilemma, media consultant Frédéric Filloux offered a sobering analysis of the revenue prospects for online and print advertising for the Washington Post—and he pointed to the general challenge of running an ad-based daily print business in the digital age. Toward the end, he noted:
“As the failure of advertising-based models sinks in, the paid-for model is gaining traction. It is not likely to work on the web but it is finding its way on mobile devices where payment is (slightly) more natural and easier to implement.”
The question is, what kind of news would mobile users pay for? Paywalls have been an almost-total failure for general-interest news, especially at the local level. And while the jury’s still out on paid news apps for smartphones and tablets, or subscription-based offerings such as News Corp’s iPad-only The Daily, I’m skeptical of their revenue potential.
Meanwhile, newer ventures have taken a different approach to providing local news and context: rather than paying journalists to report and write news stories, they automatically collect and present geographically relevant local public data (example: Everyblock), or they aggregate local headlines, blog posts, and social media updates (examples: Outside.in and Fwix).
Today, a ReadWriteWeb post is pretty down on tech-based local info services—calling them “lightweight” and “uninspired.” I think that’s a matter of taste. Also, compared to mainstream news venues, the far shorter history of tech-based local ventures is amply peppered with premature obituaries.
But against this backdrop, this week in Miami, at its Media Learning Seminar, the John S. and James L. Knight Foundation announced the first draft of the Knight Commission’s Community Information Toolkit.
This document outlines how community members can assess the quality and availability of local information, build an information scorecard against which they can benchmark progress, and create an action plan to improve local information and civic engagement. This process seems to have more in common with how services like Everyblock work than with how news organizations have traditionally functioned—although it isn’t quite like either.
Also this week, the Pew Internet Project debuted a new report, How the Public Perceives Community Information Systems. Here are a few of the report’s findings that should interest news organizations:
- Print and broadcast news organizations still get the highest marks for being people’s most important source of local information.
- “Those who are avid news consumers are more likely than others to be civically active.”
- “Broadband users and library patrons are more likely than others to feel good about their ability to gather information to meet their needs. Those who have found helpful government information online feel better than others about their own ability to make their communities better.”
- “Broadband users are sometimes less satisfied than others with community life. That raises the possibility that upgrades in a local information system might produce more critical, activist citizens.”
In addition, Pew noted: “Many of the local leaders who attended community workshops for this research initiative argued there was another variable that mattered in understanding the effectiveness of local information systems. That variable related to the flow of information—to citizens’ capacities to search for, aggregate, process, and act on information that is relevant to their needs. The community leaders reported that it was often the case that their stakeholders were not aware of the most useful information in the community and not certain how to act effectively on the information they did have. They also noted there were times when local governments were not effectively communicating to residents what information was available.”
To me, that sounds like a market opportunity—especially if you have a strong brand in a community.
All of this got me thinking: News organizations often are the major trusted brand for community information, and in many cities the local governments and agencies are not doing a stellar job of making local information available and useful (what we call in Oakland, CA, for instance: “Government 0.0”). So maybe there might be room for local news organizations to focus less on stories and ads, and more on making information useful, relevant, findable, and actionable through services for the mobile devices almost everyone has in their hands right now.
These services could be delivered on the freemium model—basic info for everyone, and more specialized premium services targeted at people who are especially engaged on local issues. The goal would be to help people understand what they need to do to help their communities. This is a natural fit for mobile media, which people approach with a generally active mindset.
Would this model support a newsroom of hundreds in big office buildings, as in the golden days of the daily news business? Certainly not. But if you weren’t paying for daily (or any) print or broadcast production, that could make better economic sense—and better serve communities. And if people came to see these trusted brands as active, useful partners in their efforts to improve thei communities (rather than detached observers), then they might be willing to pay for these services.
This requires a radical change of mindset. Honestly, I don’t think most news organizations could manage that. But some might.
The News Leadership 3.0 blog is made possible by a grant to USC Annenberg from the John S. and James L. Knight Foundation.
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Tags: knight foundation, research, government, knight commission, local, local news, business models, community building, advertising, data
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