Shaping the Future
Posted on 26. Jun, 2009 by Damian Ghigliotty.
The rapid erosion of the newspaper business has resulted in a lot of smart folks giving new thought to the future of journalism. As part of our research for the new business models for news project, we’re providing summaries and links to reports, studies, essays and conferences that bring value to the discussion. Take a look at our Shaping the Future section.
And, as always, let us know what you think.
Continue Reading
The Potential Value of Online News
Posted on 23. Jun, 2009 by Damian Ghigliotty.
Photo from PWC's "Outlook for Newspaper Publishing in the Digital Age"
Here’s a sign that news still has some $ value.
American newspaper consumers are willing to pay 68% of what they spend on their daily papers when it comes to online news, a PricewaterhouseCoopers study shows.
Whether or not that’s enough to sustain an online-only business model (considering the lack of advertising dollars floating around the internet,) it’s the highest national average out of more than 4,900 interviews conducted in seven Western countries.
On the other end of the spectrum, newspaper consumers in Holland are only willing to pay 38% for online news. Perhaps when information can be freely shared the phrase “going Dutch” loses its meaning.
The other five countries included in the survey — Canada, France, Germany, Switzerland and the U.K. — fall somewhere in between America and Holland, while the total average for all seven regions amounts to 62% of current newspaper payments. Of course, that doesn’t factor in the elimination of printing costs and pressman unions, or the issues of content piracy and advertising revenue for online media. But it’s a start to mapping out a foreseeable new landscape.
And while most of the readers surveyed say general/breaking news is more important to them than any other type of coverage, they also say it’s not the kind of news they’re likely to pay for. Instead, financial news ranks the highest with 97% of the respondents willing to pay for the content. Sports news ranks second highest with 77%.
The greatest potential for paid online news can be found in specialized, targeted and relevant information, the study reconfirms. In other words: people are willing to pay for tailored content that’s harder to find for free.
On the upside for non-financial and non-sports journalists, “that creates both an opportunity for advertisers to reach their consumers and for newspapers to develop ‘hyper-local’ or ‘local-local’ sites addressing content at the neighborhood and suburban level,” say Marcel Fenez and Marieke van der Donk, who wrote the accompanying report. And that gives the U.S. a lot of legroom to create new business models for journalism.
But while there is plenty of untapped potential for online growth, PricewaterhouseCoopers contends that print news will remain the largest source of revenue for newspaper publishers “for some time.”
Disclosure: I still buy print newspapers.
Click here to view the full report, including charts.
Click here for an online-only revenue outlook by our comrades Jeff Mignon and Nancy Wang.
Continue Reading
State Coverage as a Worthy Charity
Posted on 22. Jun, 2009 by Jeff Jarvis.
There’s nothing unsexier in journalism than covering state government. “Trenton bureau” just doesn’t have the same ring as “Paris bureau,” does it? Do you know the names of your statehouse reps? I’ll confess I don’t.
And so my biggest fear in the death of metro papers is the vacuum that will be left in coverage of state capitals. I don’t buy the dire predictions that journalism itself or investigative journalism will die with those papers. Washington will still be covered; one could say it’s over-covered (if often poorly covered) today. City government will be covered because it affects people’s lives directly and because there’ll always be somebody to catch the mayor red-handed.
But statehouses? Unless your governor is a former movie star or pro wrestler or client of prostitutes, they don’t get much – enough – attention. And even when it does get covered, there’s no obvious and endemic advertising support. Capital coverage was the gift of broccoli from news organizations and no one’s likely to bring that dish to the new news potluck.
That’s why I think that in the new ecosystem of news, state capital coverage may need to be publicly and charitably supported. Unsexy though it may be, it does affect our lives and purses. And witness the inanity in Albany lately, state government is populated too often with crooked fools who must be watched.
I’ve had a few email exchanges on the topic with John Thornton, a venture capitalist in Texas who’s worrying about state coverage. “It’s where the economics are the most up-side down,” he said:
Think about this: the total 08 Fed budget was $3.1 trillion. Subtract, national defense and entitlements, and it shrinks to $1.3 trillion. That’s the “discretionary spend” which is the dominion of Congress. Sure, there is always room for better coverage of Congress, but I’d submit that it’s pretty well covered as is.
On the other hand, the cumulative state budgets are $1.6 trillion, or 30% *more* than the discretionary spend of Congress. These taxpayer dollars are, of course, spread out into 50 byzantine and corrupt state capitols, the coverage of which has fallen dramatically and continues to do so.
So how will such coverage be funded? Thornton is counting on philanthropy. He said:
It’s certainly apropos to look at the public radio and tv numbers. Austin’s npr station, kut has 200k listeners and 17k contributors—the best conversion rate I know of. They raise $3m from individuals and $3m from contributors. . . .
Dance companies in Texas raise $20mm a year. . . . If journalism philanthropy, 10 years from now, were the size of dance, we’d put 150 reporters on statewide issues and could literally change the way state government operates. Think about that: an extra 20 at the capital; a couple each for all the agencies and the school board; 20 on the border. You almost can’t spend that much money responsibly. I don’t need opera. I don’t need visual arts. Don’t need symphony. Just give me dance, and I’ll change state government.
What this needs is people with the passion of a Thornton to sell the cause and raise the money. But as with NPR and Wikipedia and Spot.US, not everyone who benefits has to give to make the nut.
This is one of the areas we are investigating at the New Business Models for News Project. The question we are asking is how much potential charitable giving we can project for news in a market and what that will support.
We will also look at how the rest of the ecosystem can support this coverage. For example, wouldn’t it be wonderful if your town and city blogs and sites had at the ready charts to tell you who your state reps were and what they’ve been doing: their votes and expense accounts, too? Support will come not only with money – it has to start there – but also with the attention papers used to be able to give such coverage.
Continue Reading
Why Hyperlocals Should Go Mobile
Posted on 18. Jun, 2009 by Matthew Sollars.
Because the stories that work best on mobile are the bread and butter of hyperlocal coverage, says Mark Potts.
“Mobile is really the sweetspot for local sites,” he says. “Google Traffic is never going to pick up the two-car accident downtown or stuff of interest to a small subset of people, like the little league game tonight has been rained out. Those are the classic hyperlocal stories, and that’s where mobile would be great.”
As he wrote in a two-part series on local mobile last week:
What really distinguishes mobile is immediacy and location…The phone in your hand is your direct pipeline to solving problems right here, right now, and mobile-enabled services have to recognize that. It’s the purest definition of the old “news you can use” chestnut.
Beyond editorial content, mobile advertising revenues are potentially too large for new metro organizations and hyperlocals to miss. According to the Mobile Marketing Association, mobile marketing budgets will increase 26% this year while overall marketing expenditures decline by 7% (via MediaPost).
While mobile is bucking the downward spending trend resulting from the recession, the emerging medium is still only a small fraction of total marketing budgets, at 1.8%. The MMA projects that mobile ad spending will grow from $1.7 billion this year to $2.16 billion in 2010.
So, even though the examples of successful mobile products–including Yelp–Potts cites are organizations with substantial r&d budgets to burn through, he says there are inexpensive ways for smaller companies to compete. He says they should look at off-the-shelf offerings, new products coming down the pike from the content management providers or by turning to a company like Newsgator for a custom iPhone app on the cheap.
Potts argues that the hyperlocal play in mobile advertising will grow as more phones start to geolocate (or even begin to augment reality). An app could blast out coupons or special sales from local vendors—like half-priced slices from the corner pizza guy—to readers walking by.
“Local sites end up as an ad agency at that point and everybody wins. The sites take a little slice off the top,” Potts says.
So, are there any independent hyperlocals out there with killer mobile apps? Let us know, we want to hear from you.
Continue Reading
About the New Business Models for News Project
Posted on 12. Jun, 2009 by Jeff Jarvis.
We at the City University of New York Graduate School of Journalism believe that the discussion about the future of journalism — as newspapers and other news organizations find their business rapidly eroding around them — needs to be informed by facts, figures, and business specifics. That is why we created the New Business Models for News Project.
The project is researching best practices in the business of journalism online, gathering new ideas and experiments in revenue for news. We will build complete business models to share with the industry and with the journalists, communities, entrepreneurs, technologists, and investors who will create the future of news.
The project is funded by the Knight and McCormick Foundations. Two earlier conferences leading up to the work of the project were funded by the MacArthur Foundation. The work of the project’s first phase will be presented at the Aspen Institute in August and will be shared, publicly and in progress, on this site.
Our work begins with the assumption that there will be a market demand for quality journalism, watchdogging those in power, and that the market will find a way to meet that demand. The question so many are asking is how. We will attempt to answer that by projecting the future of news in a metropolitan area, concentrating on four perspectives — hyperlocal, the new news organization, publicly supported journalism, and the framework to support this new news economy as a whole.
We will use as our model market a hypothetical top 25 metro area in the U.S. where the sole daily newspaper has ceased publication. In short: We are asking what will fill the void. We posit that no single company or product will do that. Instead, an ecosystem made up of many players operating under many models and motives will emerge. In all cases, we are agnostic as to who owns and operates these entities: legacy or new companies, large or small. In that context, we will examine:
* The optimal hyperlocal (town or neighborhood) blog or site. We will look at how to maximize revenue to such sites, whether they are run by sole proprietors, larger startups, or established media companies. This will include helping sites provide the best and most valuable service to local advertisers; establishing local networks of fellow hyperlocal sites to increase sales and revenue opportunities; larger metro-wide networks; and exploring other revenue opportunities, such as paid models and commerce. We will look at what these sites need to succeed, such as networks, promotion by aggregators, and technology.
* The new news organization. Even after a market loses its daily paper, we believe there is an opportunity for a new news organization to be reconstituted around key journalistic roles serving the metro-area. We will project the scale of such an enterprise: its audience and revenue yielding its resources and functions: reporting, aggregation/curation, perhaps organizing the broader community and its news efforts. How many employees can a profitable, journalism-centered business support and what can and should they do? What is its relationship with other players in the ecosystem?
* Publicly supported journalism. We do not believe that any single savior– foundation, government, device, or massive public contribution — will rescue an existing news organization as it operates today from the crush of the market. But we do believe that publicly supported journalism — that is, from individuals, foundations, and perhaps companies — can play a role in this model city’s news ecosystem. This could take the form of a local Pro Publica or of crowdsourced funding through a platform such as Spot.US or of an expansion of public broadcasting’s role. The key question we will answer is what level of support will likely be available — projecting from current efforts locally — and what those resources could provide.
* The ecosystem’s framework. We will examine the supporting infrastructure this ecosystem will likely need, bringing together independent players to reach critical mass so they can recognize greater market value (in, for example, advertising networks and in mutual promotion) and greater efficiency (in, for example, technology platforms, the ability to create collaborative projects, training in journalism and sales, search-engine optimization…). Once again, we are agnostic to ownership: These functions could come from a single company (which is how we will present the model); they also could be provided by a legacy player or they could be offered by various players. To quote Mark Potts at one of our CUNY conferences, “You may want to be small, but to succeed at being small, you probably have to be part of something big.”
In addition, the project will gather and also propose a catalog of revenue models, working with those who are building systems to support paid content; interviewing local advertisers to learn more about their needs; talking with sites in the U.S. and elsewhere to learn what is working and not working for them; examining the possibilities for more unusual revenue streams such as e-commerce.
After this work is well underway and after the Aspen report in August, we plan to extend the project’s work to examine more business models, such as national and international content exchanges; interest-based sites and networks;
The project is headed at CUNY by Prof. Jeff Jarvis, head of the interactive program. Peter Hauck is project director, working with Jennifer McFadden, business analyst; business researchers Kate Albert, Gary Frangipane, Noah Xifr, Darshan Dedhia, Frank DiBartolo, and Senem Coskun of Baruch’s Lawrence N. Field Center for Entrepreneurship at the Zicklin School of Business; and reporters Matthew Sollars and Damian Ghigliotty, both graduates of the CUNY Graduate School of Journalism. We are grateful to the Field Center’s Edward Rogoff and Monica Dean for their support.
Continue Reading
Diller: Directories "still make nothing but money"
Posted on 11. Jun, 2009 by Matthew Sollars.
Barry Diller spoke to PaidContent earlier this week and in talking up one of his babies, citysearch.com, he makes the case for local online directories. Of course, Diller also says the work of building those directories is “impossible.” Here’s the exchange with Staci Kramer:
[…]
Continue Reading
Non-Profits Seek a Donor Collaborative
Posted on 11. Jun, 2009 by Matthew Sollars.
Newspapers aren’t the only ones looking to pool resources. Some of the non-profit news organizations that have been springing up around the country hope to create a network aimed at gathering donations.
Last month, at a conference on non-profit media hosted by Duke University, Joel Kramer of MinnPost.com and Jon Sawyer of the Pulitzer Center, presented an outline for a nationwide “donor collaborative” (download the pdf of their whitepaper). The network would allow these new shoestring news organizations, many of which are filling coverage holes left as metro newspapers cut back, to expand their fundraising efforts.
The collaborative would grant money based on the not-for-profits success at raising revenues through other areas (donations, subscriptions, etc.). Grants would be a percentage of the organization’s previous year’s revenues, with a matching system for donations from individuals.
The network could also be a boon to foundations and philanthropists who want to help new news organizations. With successful for-profit newspapers the norm for the last century or so, philanthropists have been focused on helping the poor, curing disease or funding local arts projects. They are used to (and more comfortable) funding discrete programs–unlike news operations which require continuous funding. They have little experience with which to judge the viability of a news startup. As Kramer and Sawyer write:
It will require substantial effort on their part to make sense of the landscape and decide which enterprises to support. Because of the low barrier to entry, there will be many new startups in this space, and many of them may not have the skill or capacity to diversify their revenue streams, so they will be dependent on their foundation supporters for their survival.
Check out the conference website for all of the non-profit model papers.
Continue Reading
Content you can't afford not to pay for
Posted on 08. Jun, 2009 by Matthew Sollars.
We’ll start this week with a final thought on last week’s discussion of the various pay-for-content models that have been presented to newspaper publishers recently. At the Neiman website, reporter Zachary Seward posted a transcript of his conversation with Steve Brill, in which the mogul explains some of the assumptions for his forthcoming subscription platform, Journalism Online. The entire thing is definitely worth a read, or a listen, but here is a key passage:
Brill: We were meeting with the publisher of a major, you know, city newspaper, not a national newspaper, but a big city newspaper. And he said, well, what do you think you need to achieve critical mass? I said, in this town, I’m looking at it. Which is to say, this thing that, you know, if you’re the publisher of a newspaper, you know, in a major city, one assumes your, your reporting, especially on local issues, is really the critical mass, especially if you’re the only newspaper in that city.
Seward: At this point, I guess it’s fair to say in most cities, that they’re unrivaled, but there’s certainly a working theory out there that the minute any of those big-city papers start charging, they’re going to encourage competition that they don’t currently have. That the free blogs that are much derided now for not providing reporting will, in fact, you know, begin to put up much, much more competition—
Brill: Why? Why will they be able to? How are they going to pay for it?
Seward: Perhaps by starting with a model that is, you know, that isn’t a 150-person newsroom, and so even if the end product is not as good, it’s free, and that’s sort of the hardest thing to compete with.
Brill: But again, if what you’re striving for is to get the 5 or 10 percent of your most committed readers to pay, then you can afford to have that happen. And you can’t afford not to do it.
Why, indeed? In the coming weeks, we’ll be using this space to set out some of the ways they might be able to pay for it in the new news ecosystem.
Continue Reading
The Mutter Variation
Posted on 05. Jun, 2009 by Matthew Sollars.
Steve Brill was not the only guy pitching a pay-for-news start-up to newspaper executives in Chicago last week. News veteran Alan Mutter was also on hand to present ViewPass, his idea for an industry-owned online advertising network.
Click here for the pitch Mutter made to the publishers.
As Neiman Lab reported yesterday, Mutter’s business plan focuses primarily on boosting advertising revenues by serving ads to match readers preferences and behavior, rather than the content on the page. However, readers will register/subscribe to access journalism from the ViewPass member publications.
[…]
Continue Reading
Brill's Pay-for-News Pitch to Publishers
Posted on 03. Jun, 2009 by Matthew Sollars.
Neiman Lab published details of the pitch Steve Brill is making for paid content yesterday, including a slide show presentation for wooing newspaper publishers. (The slide show is embedded below.)
In his latest venture, Journalism Online, Brill is aiming for an “easy-to-use e-commerce platform” that lets readers “purchase monthly or annual subscriptions, day-passes or single articles from multiple publishers using the same account and password.” In addition to boosting paper’s online revenues, Brill says the platform “will restore the value proposition of the print medium by eliminating the fully free online alternative.”
Among the assumptions in Brill’s model is an estimate that 5-10 percent of a newspaper site’s existing monthly unique visitors will sign up for a subscription. Yet, thanks to a mix of free content, pay-per-article micropayments and increased traffic from paying subscribers, Brill expects sites to keep 88 percent of existing page views and 91 percent of online advertising revenue (with the help of a 30 percent CPM increase).
Brill also tells Neiman’s Zachary Seward that he believes micropayments for single articles will be only a small portion of the paid-content pie.
“I think that people really want…the convenience of just having a subscription as opposed to stopping and buying something,” Brill said, later adding, “My gut is that subscriptions will win the day, but I don’t want to bet on it because I could be completely wrong.”
Brill says a number of newspapers have already signed up with Journalism Online, but they won’t publicly announce them for three or four more weeks.
