The $10 million Tow-Knight Center will receive $3 million in funding from the Tow Foundation of Wilton, Connecticut, and $3 million from the John S. and James L. Knight Foundation, supplemented by additional foundation grants and in-kind contributions of staff and technology from the CUNY J-School.

The Center, under the direction of Professor Jeff Jarvis reporting to the School’s Founding Dean Stephen B. Shepard, will work to create a sustainable future for quality journalism in three ways:
- Education of students and mid-career journalists in innovation and business management;
- Research into relevant topics, such as new business models for news;
- Development of new journalistic enterprises.

“We are optimists about the future of journalism,” Professor Jarvis said. “We tell our students they will build that future. To help them do that, we realized we have to give them the ability to create and run new products and new companies. We must train not just journalists but entrepreneurial journalists.”

More info here.

Although these genericized models are supported by extensive, well-documented research, they are but one possible view of the future. They represent a stake in the ground. Clearly, our models cannot address the specifics of every individual local market. That’s why we invite you to download our spreadsheets and plug in your own assumptions. The latest spreadsheets and business plan summaries are available here.

(Note that our work in new business models is underwritten by the McCormick Foundation and the Knight Foundation.)

* Most important, I think, is that we won’t be selling media to merchants — banners ‘n’ buttons — so much as we will be selling service: helping them with all their digital needs, including optimizing them in Google and Yelp and social media and mobile. I’ll write a post with more thoughts on this shortly.

* Voice matters. Local bloggers said they are must-reads because of their voice in the community (the human voice of the neighbor over the cold voice of the institution) and that — along with a constant flow of posts and news and the audience and conversation that attracts — makes them must-buys for advertisers. One blogger made the newspapers visibly jealous reporting that advertisers are coming to the blog asking to advertise because they had to be there. Another way to look at this: The service must be part of the community. One of the bloggers covers new businesses in town because that’s news; ads may follow but even if they don’t, the site will cover commerce in the community.

* There is interest in network sales. One newspaper exec in the room said she’s jealous of the new advertisers smaller bloggers get and would be interesting in having those bloggers sell into her site. The blogger is also interested in getting revenue from larger advertisers via the newspaper’s sales. That networked approach is key to the optimization of value we projected in our new business models for the local news ecosystem: the advertiser can be better served by appearing in more services with easier purchase; the large site can get new customers it could not otherwise afford to sell; the small site can get large advertisers it could not otherwise attract; all ships rise on this tide. (However, we must find a new word instead of “network,” as it has low-value cooties associated with it. Alliance? Ecosystem? Suggestions?)

* We at CUNY are going to be investigating the possibilities for citizen sales — new sales forces and new sales businesses that can sprout up alongside and help support the new news businesses. The group saw potential here but also saw the need for training and quality control.

* It’s clear that local merchants still need education. In the early days of the web, we had to sell advertisers not just on the value of our sites but on the value of the internet itself. That effort continues with smaller advertisers. That means that there’s a greater cost of sales. It also means that this is a means of sales — come to our internet seminar (a technique that is working for various of the participants). And I see a role here for organizations such as universities (not to mention chambers of commerce) to help local merchants understand the value of the internet.

* Local ad agencies also need education still.

* There was some debate about the sophistication of local advertisers and their need for data, but it’s clear that in many cases, media have to collect, analyze, and present data on performance and return on investment. One of the more established companies said all that matters to small advertisers is ROI (return on investment: feet to the door and ringing cash registers). One of the newer companies said more data is needed to prove performance and value. In some cases, we will measure will be attention, in others leads produced, in others sales, and in others more intangible measurements about community and relationships. At our conference on new business models for news in the fall, Gannett talked about research it did with Ideo that found that very local merchants need discovery (read: search) but in many cases, their customers already now they’re there; so what they seek is better relationships with their communities; how do we deliver and measure that?

* The simpler the better. Local merchants are not buying CPM-based advertising. They’re buying timed sponsorships. They want to see the ad they bought on the site.

* Google is playing a bigger and bigger role in local (via the web and now mobile). Some local merchants don’t bother having a site; their ads link to their Google place page.

* One old law of sales is still true: get one butcher advertising and that helps force the next one to join in.

* Self-serve platforms for buying advertising are not the answer. Sales is still needed. I’ve heard that in more than one horror story about low revenue from build-it-and-they-will-come efforts. Once an advertiser is sold, I’ve also heard of success in enabling them to update their ads (e.g., providing them with advertiser blogs).

* Replicating print ads online doesn’t work for advertisers or readers. No surprise there; the only surprise is that publications and merchants still try.

* There are other products besides advertising to sell: email, events, coupons (which work well for many local sites). There was some debate in the group about the value of video as a vehicle for advertising and as a form of advertising itself. More experimentation is needed.

At CUNY, our next step will be performing research with local advertisers/merchants. Then we’ll work on R&D on new ad forms. Then we’ll try to train citizen sales forces. This is the next step in our work on new business models and sustainability for news. Stay tuned.

: LATER: In the comments on this post at Buzzmachine, Dave Chase of SunValleyOnline adds great notes:

Great observations and consistent with what I have heard/seen from working with lots of local advertisers at SunValleyOnline which is one of the sites talked about in the CUNY “census” you guys did that has managed to build a reasonable (and profitable business). I generally agree with what you’ve laid out but will amplify or differ with a few items.

1. Education: Hands down the biggest need I’ve seen. Sales people need it. Merchants need it. Local agencies/marketing consultants need it. Citizen ad sales will really need it. It’s the reason I collaborated with a former colleague to create a how-to resource for local merchants on marketing in the digital age that I’m making available to the ventures I’m involved with. I believe there’s scalable ways for local sites to tap into this without having to do all the training themselves that can also serve as lead generation.

2. Tools for advertisers to manage their own ads: Despite having two tools (Impact Engine and Mixpo) that have very easy interfaces and through much encouragement, virtually no advertiser is taking advantage of it. They simply want us to take care of it. The advertisers I’ve worked with aren’t sophisticated at all from a marketing perspective.

3. VideoAds: This is primarily a function of the size of advertiser you are going after and where they’ve advertised. Generally, it’s the bigger advertiser who has run TV ads before that will be candidates to move $$. Turns out one of the categories where $$ are finally starting to move is political ads. The recent Supreme Court decision will accelerate that. Dynamically built videoads is a particularly promising area and is something that took place in the recent Massachusetts Senate race (on the winning side). There’s some powerful tools that allow A-B testing, message optimization, etc. that are accessible even to the smallest advertiser.

No shit.

We need a study to determine this? Well, maybe we do. I think it is worthwhile to have a baseline to compare where news goes in years to come. When I argued the need for an audit of news today with a Google News creator, he wondered why today’s news should be the starting point. My response: Only because that is where the conversation is, as in: “What are we going to lose?” So fine, let’s measure the value of what exists today and look at the resources that go into producing it (including the waste on repetition and commodification). So fine.

But I think the study also brings some dangers.

First, predictably, it only fuels the defensive passion of old media nya-nyaing the news, witness the NY Times: “But the study offered support for the argument often made by the traditional media that, so far, most of what digital news outlets offer is repetition and commentary, not new information.”

Second, it defines news as news has been defined. We should be rethinking our definition of what is news — for many people, it’s not stories about juvenile justice, one of Pew’s subjects — and how it should be covered — not necessarily in articles — and how it is spread — that is the role of blogs and twitter — and not be stuck in old measurements.

Third, it sets up a strawman and then lights the match: Do blogs give us most of our news? No, they don’t. Well, then, they must be worthless, eh? We’ll be lost without big, old media, won’t we? Just what we need. (Though to the study’s immense credit, it also notes how much of local news is repetitive and does not include original reporting.) “This study does suggest that if newspapers were to disappear, what would be left to aggregate?” Tom Rosenstiel, director of the PEJ, told the AP. There’s the strawman: Without papers, we’ll be without news. No, we at CUNY believe the market will deliver it more efficiently and perhaps — perhaps — more effectively. It may not be news as those papers defined it.

We must keep mind that we are at the dawn, the very dawn of the new news ecosystem. There is no scalable business model in place — though, in our studies at the New Business Models for News Project at CUNY, we see them on the horizon and we see new companies starting to build it. When the Associated Press called me about this study on Friday, I said I knew of four dozen reporters in New Jersey who have left their jobs at newspapers and are dying to continue reporting in entrepreneurial startups and are waiting for the kind of help we envisioned in our project. Companies such as Impremedia and The New York Times are just beginning to consider their relationships with the ecosystem.

We are also just beginning to see experimentation with the form of news, moving past the articles the study measures. News is becoming more of a process than a product; it is being disseminated in new ways thanks to search and social and algorithmic links. News is changing.

So I’m fine to look at the PEJ as a historical artifact, a touchpoint for future discussion. But, for God’s sake, don’t consider it a write-off of that future.

(CUNY’s business models work has been underwritten by the McCormick Foundation, the Knight Foundation, the Carnegie Corporation, and the MacArthur Foundation.)

Here’s the wiki where we will continue to share syllabi, case studies, course materials, and videos. Here is a link to download the recording of the hour-long call (fast-forward past the howdys).

We share similar but not identical goals. We all agree that it’s important for journalism students — and journalists — today to understand the economics of news. Some of us add that it was irresponsible of our institutions not to teach this in the past. We agree it is important to bring entrepreneurship into the industry. Some of us concentrate more on new entrepreneurial ventures, others more on bringing innovation into existing companies. Some say journalists aren’t cut out to be entrepreneurs (I disagree) but all agree that entrepreneurship is a way to teach both innovation and business. Some notes from the call:

* At Arizona State, entrepreneurship is now a required course for journalism graduate students. AS emphasizes the need to get journalists to learn how to talk to people in other department and disciplines: how to work with engineers, especially. So AS gives student teams budgets for programming their projects; they’re looking at offering 5-10 hours per team for AS programming resources and 5-10 hours for programming resources teams find outside. They want teams to build but don’t want them to be tied to one platform. Cool, eh?

* Larry Kramer at Syracuse asked about cooperation between journalism and business schools but on the call there were notes of caution. Business students, one said, aren’t there to be entrepreneurs; business school teach corporate culture, said another; and these business students also don’t learn media. Kramer wants to teach the Harvard Business School case method but is looking for cases written from the journalistic perspective.

* Seek and ye shall find: Bill Grueskin of Columbia said the school has used a Harvard Business School case on the Norwegian wonder, Schibsted, and HBS will have another on Huffington Post. But HBS charges. Columbia created such a case on Politico and offered it to fellow faculty for free. Columbia also teaches a 60-minute MBA course and is putting that online.

* David Westphal of USC talked about the pluses and minuses of teaching interdisciplinary classes with students from various pursuits; he said it’s worth the effort to get different perspectives.

* Jay Rosen at NYU said he wants to get students to grapple with the entire problem of sustainability in journalism, putting it all on the table: journalism, audience, technology, business. He wants to “override the siloization of journalism.” He also said we need to work to attract different students who are entrepreneurially minded.

* Jim Willse, ex editor of the Star-Ledger who’s teaching at Princeton this term, said we need to give scholarships to publishers to get them into entrepreneurial programs, to change their culture.

* Many of us – Maryland, Columbia, CUNY – agreed that it’s important to have entrepreneurs and investors into class to expose journalists to their thinking.

* For our part at CUNY, here is a report from my last entrepreneurial class (funded by the McCormick Foundation) and a description of how the class works. Here also are the new business models for news (funded by the Knight Foundation) that now inspire much of our work. Note that we just added a course in hyperlocal built around running The New York Times blog, The Local, in Brookyln. We are working with The Times and others to also tackle hyperlocal advertising opportunities and challenges (funded by the Carnegie Corporation); more on that as we progress.

: ALSO: In Germany Ulrike Langer polls the journalism schools there — which operate in or close to media companies — to see what they are doing in entrepreneurial journalism and finds activity at those run by Burda and Axel Springer. (It’s in German.) Next call, we’ll have our German colleagues join us. If you know of such work going on elsewhere in the world, please let us know.

Outside.in (Mark Josephson)

______________

GameChanger (Ted Sullivan)

______________

Buzzr.com (Ed Sussman)

______________

Transparensee (Alex Acree, Steve Lavine)

______________

Adify (Jim Larrison)

______________________________

Xarc’s Dan Conover says that the models we presented look a lot like present models, only different. Fair and true. Our goal was to look at what news in a metro market would look like if the large daily paper died today. — not in the la-la land of the future of news and media I often write about here (more on that in a minute) — but today.

So we based our assumptions on known realities: on local bloggers who are making a living and how they are doing it today, on new news organizations that are springing up today, on the proportion of digital revenue being earned today.

If you’ve heard any of my presentations of the models, you have heard me lament that we chose to work in the lingua franca of the present: CPM-based display advertising and criminally low engagement numbers that are sinfully standard in the newspaper business. Neither is good enough. But we wanted to use a language and precedents that people in this space would understand. We then pushed development of new models for revenue and of networks that must be used to increase value.

Conover says that without an “exit strategy” a hyperlocal blog is not a business but merely a job. With respect, he is judging the entrepreneurial future of news through old, institutional glasses. Much of the work of very local journalism will be done by these new, single-proprietor businesses (and volunteers). If we took his perspective, then there would be little potential in the restaurant, drycleaning, plumbing, or dental industries because many of their practitioners have no exit strategy, only sustainable jobs. Welcome to the new, small-is-the-new-big world. This is precisely why we propose that critical mass will be reached not with old companies owning the market but with new companies operating together in networks. See: Glam, the largest women’s brand online. New model.

Conover is fair to say that the future – not today but tomorrow – won’t look much like the present, including the present we postulate in our models. I do indeed agree that the future could look wildly different. I have speculated about systems for sharing information that will reduce the marginal cost of news to zero with journalists adding value only where appropriate and where that value can be recouped. I have blathered on and on about hyperpersonal news streams replacing the article as the atomic unit of news. I have predicted a world with networked journalism, news made by Wave, and similar outlandishness. If I had tried to present all that as a vision for the news of today – the day a paper dies – I would have blown brains and been laughed out of Aspen and with good reason. But that was not the goal of the New Business Models for News Project. It was to get people to see a new today.

Believe me, Dan, if you want to have a future-shock derby with far out ideas for what news will look in the future but sooner than we think, then I’m happy to compete. But that wasn’t our job here.

And don’t blame the funder of our work for that. Connover is unfair to slap the Knight Foundation, which paid for the first phase of this work, saying: “In the short term, foundation money is likely to continue producing studies based on business models that reflect conventional wisdom about media.” The Knight Foundation did not tell us how to envision our models; that is an allegation without evidence.

It’s particularly unfair since the Knight Foundation – more than any other foundation – has been aggressively pushing inventors to imagine and create new visions and realities for news. The Knight Foundation generally does not favor institutions over entrepreneurs; quite the contrary. You’re free to judge my defense of Knight in light of the fact that they did fund this phase of my work. But I think Knight’s work defends itself.

So, yes, Dan, I do agree that the models were based on present realities. That was precisely what we set out to do: to envision an immediate future that will be credible in present terms. But I also take the challenge to envision more futures for news and – if you watched my presentations – you’d see some I hope to work on. I want to examine the workings of the link economy I talk about so much and prescribe how to exploit it. I want to examine new content exchange models. I want to examine entirely new forms of news and the exchange of information.

This Wednesday in my entrepreneurial journalism class at CUNY, my students will present to a jury 15 businesses, some of which begin to imagine fairly radical new visions of news. They hope to win some of the $50,000 in seed money we have from another foundation, McCormick. And then they hope to go build those businesses and make them sustainable the day after tomorrow. Thursday, that is.

PaperG (Victor Wong)

______________

Spot.us (David Cohn)

______________

SeeClickFix (Ben Berkowitz)

______________

GrowthSpur (Mark Potts)