In fact, in year three of our NNO model, advertising accounts for 57%, or $11 million, of the $20 million in total revenue. The rest, or $8.6 million, comes from new business opportunities that have been so often neglected by existing media companies (or discounted because they were too expensive to develop in an era when margins on advertising were fat). In most cases, these new opportunities will require news organizations to forge new relationships with their readers and with the advertisers and businesses they serve, and to rethink some of the news content they provide.

We’ve written about a number of e-commerce opportunities already. We spoke with the Telegraph about their efforts to sell products in a contextualized format, taking fees for selling tickets and sports betting (there has even been chatter recently that legalized betting might help save the news industry). We’ve estimated just over $35,000 in annual revenue from ticket sales in our model. As Steve Buttry points out, we can go much further: obituaries are an opportunity to sell flowers and college football games are an opportunity to provide access to restaurant reservations before or after.

We also think that the advertising arm of the business should invest in training and/or consulting local businesses in online advertising and marketing. That service could bring in $480,000. Building a business-to-business marketplace where local entrepreneurs can list sales and post and reply to RFPs, could earn nearly $1.5 million in annual revenues by year three.

Hosting events is another item. Folks like the Voice of San Diego and Brooklyn Based say they view offline events as a new way to present their journalism. But, they can also serve as an important source of revenues, indeed events account for most of Brooklyn Based revenues. Events for readers could generate $330,000 by our estimates, and business-to-business conferences another $1.2 million annually.

Behind all of these ideas is the need for the new news organization to provide services to businesses and readers where they need them. As Steve Buttry pointed out to me today, in most cases, news organizations already collect highly valuable data, so all they need to do is figure out how to maximize that value for customers or businesses. In some areas the content itself might need to be reworked. He explained:

Perhaps the best example of thinking differently is in driving. Our automotive vertical is based on a job (buying a car) that most people do once every few years, so it’s not a routine and we don’t have a regular way that we do it. So it was easy for specialized car sites to steal the business away. But driving is a local job that most of us do every day. So if we develop a service based around driving, people will come to us every day. And that gives us an opportunity to become essential with some businesses that are not as big advertisers for newspapers (tire shops, auto-repair shops, auto insurance, etc.). And if we think beyond selling eyeballs, and think beyond print and start using the tool that most of us always carry in our cars, the model becomes entirely different. We think about being the conduit for text messages from motorists needing repairs today to garages with openings today. Filling that bandwidth has tremendous value to the business and identifying someone who can repair the car has tremendous value to the consumer. Win-win. (And, by the way, if you’re a car dealer and someone in your community develops a service like this, where do you think they will look first when they’re ready to trade up? So you’d better advertise there, too.)

Lastly, it’s important to make a point about the changes we think are coming in advertising. We’ve outlined new advertising units and ways to deliver them, including coupons and deals delivery, and we put them as separate line items in our model. But, it seems clear that advertising on the web will increasingly move towards the deals/coupon model eventually replacing display ads at nearly all levels. Online ads want to be transactional. We’ve already seen this with the launch of AnnArbor.com, which only publishes deals. The role for the news org going forward is to build a platform that serves the right ads to readers (much like it will need to serve the right news content). Also, the org will need to serve its advertisers better by working with them to develop messages and campaigns that work. It’s simple really, if they don’t do this in a pay-for-performance model, the advertisers will go elsewhere.

Not all of these ideas will pan out in all markets, or for all organizations. But it seems high time to give any idea with even a bare chance of succeeding a try. (The New Business Models for News Project has been funded by the Knight Foundation.)

Explain the idea behind Brooklyn Based. You’re sort of a hybrid between email product, website and events hosting business. Which of those is the most important?
The most important thing is our email list. Our Wednesday email is the Tip Sheet; it’s all event listings and it grounds the whole thing. Even if you don’t like the other two posts, at least on Wednesday you read about 10 events you want to go to that week.

On Tuesday and Thursday we have feature posts—a neighborhood story about a restaurant or an art event or an interview. We try to stay at 500 words or less with a higher level of writing and editing than your average blog. We’re not all snappy one-liners and 15-word paragraphs. We try to have a front-of-the-book-magazine feel to our posts.

Our blog is not the majority of our content. We’re not going to be one of the tabs in your Firefox. We’re the site where people say, I need something cool to do, what’s on Brooklyn Based?

You sell ads, but how much of your revenue comes from events?
I’d estimate 60 percent of our revenues come from sponsoring events, with the rest split between advertising and events we host ourselves. Our own events are a big chunk of cash, but we don’t do them very often.

So, can you explain how that media sponsorship works?
It fits somewhere in between PR, event planning and local blogging. We’ll sometimes send a fourth email in a week that’s labeled an invitation, that’s sort of our code that it’s an advertorial for an event we sponsor.

We do this with The Bell House in the Gowanus a lot. They come up with an idea for an event, they ask us to promote and organize part of it, and they give us a cut of the door. In January, we sponsored a Lost season premiere party for them. We brought in snacks and set up a Facebook page and promoted the event to our subscribers.

We’re working right now on a garden party with Brooklyn Botanic Garden. They want it to be more interesting than just hiring caterers and event planners, so we’re stepping into that role and utilizing our email list and media contacts.

How are the sponsored events different from Brooklyn Based-hosted events?
When it’s our own, we come up with an idea and pitch it to the venue. We get a portion of the door. We hosted a documentary film series. We did the Brooklyn premiere of Food, Inc. with local food types and made it a bigger event than just a screening. We’ve done a pig roast where we had 600 people lined up in Bushwick.

With these events, we are creating content, the content is just an event rather than a blog post. Bringing all of those elements together and planning it is a skill that people are willing to pay for. Venues are willing to pay for our list and the cachet that goes with the recognition that it’s an event that we’re producing. Our readers know that we only put our name on something that’s really fun. It’s a matter of aesthetics and curating.

How do you use social media, like Twitter. It sounds like a perfect fit for your business?
We use Twitter all the time. We use it to promote events and we use it a lot like a blog. If we have a hot piece of information, like an event we’re really excited about, we’ll often tweet it first, before putting it in the email. Or, if I’m out at a bar, and a celebrity comes in, I’ll tweet that out as a silly bit of content. It’s almost an award for our most committed readers. In fact, I have a personal Twitter account that I haven’t used in months simply because I find it more interesting and satisfying to tweet as Brooklyn Based.

What has been the biggest challenge for Brooklyn Based so far?
We’ve been having a hard time keeping up with advertising. We’re doing a complete redesign, and that should help. We need more space for ads than we have and we need them to be easier to manage. That said, I think we’re going to see ad revenue make up 40 percent of the pie soon.

I also don’t think we’ve properly sold ourselves at this point. People on our list are really engaged. We have a high open rate and higher than average click-through rate. Right now we charge a flat-fee for ads. If you buy a month of advertising we’ll do five appearances for the price of four.

I think we’ve been low-balling ourselves. But, we’re beginning to understand better all the time who we are, and who we’re selling to.

After the redesign, what’s the next step for Brooklyn Based?
As part of the redesign, we are going down the road of do we want to rebrand and have a new logo. Our long-term plan is to add cities and be able to sell across that network and we need the site and brand to be scalable.

On the promotion side, we are actively trying to branch out. We have great partnerships, but we need to make sure people understand we’re not just an arm of Bell House or the Roebling Tea Room. We’re talking about ways of courting more moms and kids events, and adding a bit more Park Slope to the Williamsburg we have in our email list.