From time to time, I’ll give an overview of one broad MediaShift topic, annotated with online resources and plenty of tips. The idea is to help you understand the topic, learn the jargon, and take action. I’ve already covered blogging, citizen journalism, political polling sites and other topics. This week I’ll look at alternative business models for newspapers.
It’s easy to see the problems plaguing the business of daily newspapers in America. The Tribune Co. filed for Chapter 11 bankruptcy. The Christian Science Monitor said it would publish weekly in print instead of daily. Detroit newspapers announced they would be cutting home delivery to three days per week. Layoffs are rampant and newspaper company stocks are down in the dumps.
What’s difficult is finding solutions to these business problems. With this in mind, MediaShift presents this guide to alternative business models for newspapers . The models we profile range from those that newspapers have been experimenting with for a while, to those that are brand new, or recently borrowed from other types of media. Our goal is to help spread the word about some of the best ideas and experiments in the industry.
Most likely, there won’t be a “silver bullet,” an idea that will catch on as the savior for the newspaper business. Instead, a successful online newspaper will need a mix of many different revenue streams to survive in the digital age.
Alternative Business Models
Blog networks aggregate blogs written by staffers, freelancers and readers. These blogs generate more page views that can be monetized with targeted ads, especially if the blogs are focused on specific topics like sports, health or politics. The Washington Post even started its own custom blog network called Blogroll, which offered to help run ad sales for outside blogs and promote them on the washingtonpost.com site. But Washington Post stopped adding blogs to its program due to lack of revenue.
Prognosis: Having in-house blogs seems to be a better strategy so far than aggregating or selling ads on outside blogs. LATimes.com jumped up to the No. 2 newspaper site in terms of traffic last month, and its blogs helped it drive more traffic, leading, perhaps to more ad inventory.
One of the big reasons newspapers are hurting is that their classified ad business has been usurped by online upstarts such as Craigslist, which offers mainly free ads. Newspapers have tried to offer extras online, including print/online specials for people buying classifieds. They have also invested in online sites such as CareerBuilder.com (owned by Gannett, Tribune, McClatchy and Microsoft) or partnered with classified providers such as Oodle or Yahoo HotJobs.
Prognosis: It’s hard to imagine newspapers catching up to Craigslist and other free options online just by partnering with outside firms. They will need to super-charge listings and add extras galore — some they can charge for — in order to entice people back.
This more experimental business model has the audience making direct payments to support a journalist in writing a particular story or covering a beat. Many bloggers have supported themselves with donations from their audience, from Chris Allbritton having his readers send him to Iraq to Ana Marie Cox getting reader donations to keep her on the 2008 campaign trail. Now there’s a startup called Spot.us that is raising money to pay for specific story pitches and then offering them up to newspapers and other media outlets. Plus, Representative Journalism or RepJ aims to have a community fund the salary of a full-time journalist to cover a specific beat. (I wrote more about this on MediaShift last month.)
Prognosis: Too early to say what will happen. Crowdfunding could help freelance reporters in specific areas, but it might not translate well to a newspaper culture.
Print is far from dead. Many newspapers can use technology to offer up customized print pages — with ads — for readers, or hyper-local editions of their papers. A Brazilian paper recently let readers design their own front page, which was then custom printed with the paper and delivered to them — sponsored by Nissan. The new Printcasting project at the Bakersfield Californian lets publishers create their own custom publications with ads that subscribers can then print out at home or read as PDFs.
Prognosis: Many people still prefer to read news in print, so these stopgap measures could help the transition to new digital platforms. Home printing could work, but color ink costs can be high.
Many newspapers have tried to set up special hyper-local editions online, targeting smaller neighborhoods and letting citizens post stories, photos and videos of life there. The business case was that user-generated content was cheaper to produce, and that small businesses would flock to reach those people. But so far, the most successful hyper-local efforts have been reverse-published print editions at Northwest Voice in Bakersfield, Calif., and Your Hub in Denver, where the best online content is printed in special editions with print ads. Washingtonpost.com’s LoudonExtra was touted as another innovator, but ended up falling short because staffers didn’t interact with the community enough, according to media analysts who talked to the Wall Street Journal.
Prognosis: This has been a hit-or-miss proposition for newspapers. The most successful efforts have put staffers out into neighborhoods and emphasized community involvement.
Rather than just shoveling news articles from the paper online, many newspapers have struck gold by creating local portals as guides to their locales, including entertainment listings, restaurant reviews and directories of local businesses. They can start by listing everything in the town for free online, and then enticing businesses to buy premium listings, graphical ads and other add-ons. These portals can live off of the newspaper site or within it. One successful local portal is Vegas.com, which has helped financially support the advertising-free print newspaper, the Las Vegas Sun. The Sun recently hired top new media guns Rob Curley and Chris Jennewein.
Prognosis: The more comprehensive these online portals are, the better. In order to boost traffic (and ad rates), these portals need to become the trusted source of listings in a community — outstripping Yellow Pages and alternative weeklies.
Many newspaper sites have been highlighting audio podcasts and video reports from staffers. It’s a great way to use the power of the Internet, and also a way to bring in new types of online advertising. Despite the deep recession, eMarketer still predicts that online video-ad spend will increase in the U.S. by 45% to hit $850 million in 2009. Many newspaper publishers would like to capture some of that income, but they need to make sure the video ads aren’t too intrusive and that video content is worthwhile for viewers. Currently, many video reports on NYTimes.com are preceded by 15-second video spots, half as long as ads you’d see on TV.
Prognosis: Still dominated by a mix of generic wire service and poor quality videos by local reporters at most papers. Big papers like NYTimes.com, Washingtonpost.com and WSJ.com have led the way in monetizing and producing high quality original video reports.
In print, newspapers have tried to cater to specific readers by adding specialty sections like technology, food, wine and religion. But online, newspapers can get down into much more specific niches — and they are not limited by print holes in how many they can run. That has led to a proliferation of sites for moms, who provide the content with their own blogs and forums, and are filled with ads for diapers, kids’ clothing and retail outlets. The Wall Street Journal, however, pointed out that sites like BabyCenter are now among newspapers’ competitors online.
Prognosis: Niche sites can bring a new audience to newspapers online, reaching out to people who normally wouldn’t buy a print paper. As long as they can stay fresh, involve the community, and stay focused on their niches, these sites can help bring in new advertisers for newspapers as well.
There is a long tradition of newspapers being run as non-profit organizations, with the most prominent being the St. Petersburg Times run by Poynter. But online, there has been an even greater push to support original local journalism with a combination of foundation grants, reader donations and online sponsorships. This model has been used by NPR and PBS for decades, and is now being tried by startup sites such as MinnPost and VoiceofSanDiego, which were profiled recently by the New York Times. Plus, the patronage model has helped start the investigative journalism site, ProPublica, staffed by many former newspaper editors and reporters.
Prognosis: While it’s difficult to imagine all journalists being supported by billionaire philanthropists, many of these startups have been able to survive and thrive thanks to foundation funding and donations. The Knight Foundation recently pumped nearly $400,000 into four of these startups.
Full Disclosure: The Knight Foundation is also a funder of MediaShift.
Charging for content has perhaps been the most challenging monetization strategy for online newspapers . While some newspapers initially charged for access to all of their news articles online, most of those pay walls have been dropped. The New York Times started a TimesSelect product to charge for Op-Ed columnists and other features, while the Los Angeles Times tried to charge for its CalendarLive site. Both publications gave up on those paid content initiatives. Still, most newspaper sites continue to charge for archives and other premium content in an attempt to diversify their revenue streams online.
Prognosis: People want everything for free online, but in some cases, they will pay for very specialized information that they can’t get anywhere else. When Rupert Murdoch took over the Wall Street Journal, he had hoped to bring down the pay wall, only to realize just how profitable it was. Some pay walls will work.
This list is only the beginning. Let us know about other business models we missed, or if there are other examples of publications that are using these models in unique ways. We will update this story with your submissions, and give you credit and a link. Just let us know through the comments below, or by using the Contact Us form on the site.
Additional research for this story by associate editor Mike-Rosen Molina.