In an effort to add to the paid-content discussion, we’ve built two versions of a paid model. The first is a “pure” paid content model where 100% of the main news site sits behind a pay wall. The other is a hybrid model that envisions keeping up to 80% of the content available for free. Both models have four scenarios with varying subscriber and fee levels (the hybrid model has additional variables for the level of free content, set at 50% and 80%). As with most of our models, Jeff Mignon and Nancy Wang at Mignon Media helped us build these paid versions and provided invaluable guidance and insight throughout.

Download the full paid version here and the hybrid here.

If you’ve taken a peek at any of the other models we produced and presented to the Aspen Institute you’ll see many of the revenue and expense components are repeated here. We’ve kept our staffing assumptions roughly the same and this news organization can take advantage of some of the same revenue opportunities (like events, coupons, and a range of services to local businesses) that are open to a free metro-wide publication.

Here are a few take-aways on the paid models:
- According to our assumptions, the main site of the fully paid model loses millions throughout the 3-year period.
- In three out of four scenarios, the main site in the hybrid model is profitable in year 3 (with the B-to-C and B-to-C services, it could be profitable in year 2).
- Profitability rises along with the level of free content.

To account for the impact of a paywall on advertising, we have made some notable adjustments from our New News Organization model:
- We’ve reduced the average sponsorship revenue assumption to $100 per week from $1500.
- We also reduced the commission the organization takes on ads sold into a metro-wide ad network to 2% from the 20% estimated in the free version.

I’m guessing that some folks will take issue with a few of those assumptions. As always, we hope you will tell us where exactly we’ve gotten it wrong. Plug your own numbers into light-blue cells on the “Paid Model Options” page and then send your spreadsheet back to us. If you prefer to work in Google Docs, the full paid model is here while the hybrid model is available here. (The New Business Models for News Project has been funded by the Knight Foundation.)

Out of the 40-person staff for year one, 26 are editorial and the other 14 are sales, administration and development. Below is a breakdown of the NNO’s first-year staff. (Click here to view the NNO model as a Google Document. Be sure to click on the Staffing tab at the bottom of the spreadsheet to view all figures related to this post.)

Full first-year editorial staff:

• 1 top editor
• 5 other editorial staffers & fact-checkers
• 20 journalists (community managers/curators/beat reporters)

Editorial breakdown by beat/area of coverage:

• Police, Crime & Accidents (5 beat reporters and 1 community manager/curator, with the help of local bloggers, citizen journalists, databases and witnesses)

• Local Government (4 beat reporters and 1 community manager/curator, with the help of local bloggers and citizen journalists)

• Education (1 beat reporter and 1 community manager/curator, with the help of local bloggers, citizen journalists and local experts)

• Business (2 beat reporters and 1 community manager/curator, with the help of local experts and databases)

• Sports (1 community manager/curator, with the help of local bloggers, experts, databases and syndication agreement with national outlets)

• Local Entertainment (1 community manager/curator, with the help of local bloggers, and databases)

• National & International News (overseen by a top editor, 1 news aggregator, with the help of experts and syndication)

• Weather & Traffic (1 community manager/curator, with the help of databases/syndication and citizen journalists)

We expect the editorial staff to grow by 7 in the second year and 7 again in the third year, as advertising and other revenue grows. The NNO will also be able to grow its staff by cutting back on some particular costs, i.e. seeking office space in a low-rent market, requiring editorial staffers to use their own laptops (we’re not advocating either of these, just exploring possibilities.)

Full first-year sales, admin and development staff:

• 1 CEO/CFO/COO
• 1 sales & marketing director
• 5 other sales staffers
• 4 payroll/tech support/other admin
• 1 search engine optimizer
• 2 developers

Download the NNO Excel file here.

View the Framework/Hyperlocal business model as a Google Document here. (To make changes to this document, simply click File>>Create a copy or File>>Export.)

Or, download it as an Excel file here.

Highlights & Assumptions:

• Operating income (EBITDA) for the framework, year three: $1.3 million.
• Operating income for hyperlocal businesses, year three: Large, $66k; medium, $32k; small, $26k.
• In this new ecosystem, we envision a mature market of 5 million people supporting 99 small, medium and large blogs.
• Hyperlocal news organizations are viable without the framework, but are more profitable with the ability to sell ads across a wider network.
• Likewise, the framework can scale to other cities and become more profitable. For ease of projecting, we’ve limited that company to one metro market.

Click here to see the other models. (The New Business Models for News Project has been funded by the Knight Foundation.)

View the Not-for-Profit business model as a Google Document here. (To make changes to this document, simply click File>>Create a copy or File>>Export.)

Or, download it as an Excel file here.

Click here to see the other models. (The New Business Models for News Project has been funded by the Knight Foundation.)