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.
Introduction
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
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.
Examples: Washington Post’s Blogroll; Forbes’ Business & Finance Blog Network
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.
Classified Networks
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.
Examples: SFGate’s Kaango-powered classifieds; NY Post’s Oodle-powered Market Place
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.
Crowdfunding
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.)
Examples: Spot.us’ Fact-Checking Political Ads; LocallyGrown’s Representative Journalism entries
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.
Customized Papers
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.
Examples: Triblocal uses Kodak’s Microzone Publishing Solution; NewspaperDirect’s Print-on-Demand (more examples in this great Seybold article)
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.
Hyper-Local Ads
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.
Examples: Augusta Chronicle’s Spotted; Bluffton Today
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.
Local Portal
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.
Examples: Santa Cruz Sentinel’s Santa Cruz Live; Knoxville News-Sentinel’s Knoxville.com
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.
Multimedia Ads
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.
Examples: USAToday.com’s video; OrlandoSentinel.com’s video
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.
Niche Sites
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.
Examples: Gannett’s MomsLikeMe; The Morning Call’s Lehigh Valley Bridal
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.
Non-Profit
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.
Examples: St. Louis Beacon; Chi-Town Daily News
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.
Paid Content
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.
Examples: Milwaukee Journal Sentinel’s Packer Insider; much of Wall Street Journal 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.
View Comments (28)
They should take a look at nobosh.com
nobosh
News may not be paper based in the future but people will always want something to carry, hold and read while waiting for a bus.
The future of newspapers maybe a hybrid of an eBook reader or a new form of paper that is like a plasma screen. Newspaper companies need to be more innovative if they want to survive.... :)
Your post reminds me of the allegory of the blind men and the elephant.
The problem is that the original source of a daily newspaper's strength was that it was the definitive place where one could go to get the news that mattered. One could go directly to their favorite sections, then deep dive.
One of the challenges with creating an alternative business model for newspapers is that for decades newspapers have been an amalgam of businesses: part classifieds, part display ads, part yellow pages, part customer publisher, part list broker. And, in turn, newspapers rely on a complex mix of wires, freelancers, stringers, and so on.
In comparison, alt weeklies rely on a steady stream of weekly entertainment-related advertising with a smidgen of classifieds. If you've seen the "newsroom" of the National Enquirer you'd probably agree that alt weeklies have more in common with tabloids than they do with a daily newsgathering operation.
In my view, newspapers need to co-opt some of the functionality that ProfNet and then HARO have used to build their businesses. This functionality is required for the newspaper to retain its position as the definitive, most authoritative source of information on local topics. When they have reached that level of authority, only then will they be in a position of strength to deal with Google and other information based businesses.
Over 20 years ago there was a report by investment banking firm Hambrecht and Quist on "information vending" companies and what made them successful. The findings then were remarkably prescient. Companies that either had a proprietary source of data acquisition or distribution were in a position to succeed. If you look at any successful Web business, from Amazon to Zillow, you see Joseph Laird's findings come to life.
You can read more of my musings on the newsrooms -- and their importance -- at
http://connectme.typepad.com
I have to agree with Andy Strote: I haven't seen anything here that shows that the newspaper industry could be saved.
Upon that, many people who are posting their views are showcasing their own sites to prove a point. But most of these sites aren't the answer. Even Strote said that if the industry dies on the top ( reporting ) than no one at the bottom ( bloggers, Op-eders, news aggregation ) will have anything to write.
Spot.Us seems good, but even then I have to question where the story will get published, and if the writer owns his "space" or paper, does he gain extra money from advertising? The double-dipping prospect, or the prospect of non-transparency, makes me hesitate on community-oriented programs without clear guidelines.
I think we have reached a point where reporting has become too expensive, and the operations must be lessened ( cutting workforce, increasing tech use ) or the reporting must be made of better value ( ie: pay cuts ) that will help the industry survive.
These alternative methods aren't really much because they have been around for years. I congratulate the writer for doing his homework. At the same time, I don't see how these methods will save no more than a handful of big newspapers.
Brian Hayashi is also on point, but I think one can also succeed with an ability to brand ( AOL has always been lagging behind in multiple industries, and has somehow survived because they put their name on something first ).
Interesting article!
I live in Malaysia, and I am the CEO of Malaysiakini.com, a fully online news only website. We charge US$40 per year and we have about 12,000 active paying subscribers plus a further 200,000 unique daily readers who read the free stuff. You can google Malaysiakini for lots more information about us.
It has been fairly obvious that since the invention of search and aggregation, media owners have lost their hold on advertising and are unlikely to come up with an ad supported model that can cover costs of journalism in its current form.
Advertising is migrating and can no longer fund journalism. As journalism is a critical public service, critical for political, economic, social and many other reasons, journalism has to find a new home. Either the public pay directly (ie subscription), the govt pays (via grants funded by taxation) or another type of organisation takes on the duty of journalism. Some candidates include private foundations, or universities. I simply don't see it any other way
Media can survive, but journalism needs to save itself from extinction.
Elaborated in:
http://www.projectmalaysia.org/2008/12/do-journalists-belong-in-the-media/
first published in MDLF X anniversary in 2005
Premesh Chandran
Hometowntimes.com has solved the local online news model by providing a franchise opportunity with a proven, proprietary content and ad management system that delivers a home/community based business opportunity to journalists, advertising salespersons, reporters, and local writers. We believe that the local market has its unique characteristics, issues of concern, and lifestyle that can only be reflected by ownership and by someone living in the community. Hometowntimes.com presents a proven business model to support such delivery of hyper-local news, information, events, and services.
nobosh.com only takes the news that NEWSPAPERS are reporting and put it on their website. Where are they going to get that information if there are not any more newspapers to steal from?
I'm not sure how Hometowntimes.com plans to make money. If newspapers are struggling to to get advertising dollars from local sources and struggling to pay their news staff, how does this website plan to make any money? My guess is the website will get the franchise money and thats how they make money but what about the guy that buys the franchise?
The VALUE of Print Newspapers in our daily lives.
The main purpose of the print newspaper as a “PILLAR OF FREEDOM” is to provide all citizens of all ages, slowness or quickness of mind whether they are looking for the information or not to use their gift of understanding from their point of view in life to choose a path to proceed in their Life’s quest for peace, happiness & security from all harm.
Newspapers can help to bring people of diverse cultures into a more homogeneous neighborhood by highlighting the cultures of each group
Television News provides sound bites and for some it is too quick to see the truth beyond the veil of neglect, greed or indifference of possible biased reporting.
Internet News? Is it a blessing or a curse? We thought nuclear energy was going to be a blessing until it was acquired by nations with questionable motives. Knowledge it seems always gives us a good side and a bad side that is sometimes worse than the good side.
Internet News instead of providing a smorgasbord or variety of news for some of us to ponder over with a cup of coffee for its meaning, it gives us items of interest that we can bring up to suit our taste. Some of us do not like bad or terrible news where people suffer and will not take time to search for it.
To understand the gift of "Free Will" one must at least know the extreme limits that some will pursue whether it is going to the moon or stealing from a bank.
Newspaper investigating reporting helps to discern the truth about change in the good or bad aspects of our community life.
In our quest in life, trial and tribulations will happen. I remember back in the 50’s when DDT was sprayed over our area, what a blessing to get rid of the flies until the book “Silent Spring” made us realize the truth. Birds were vanishing.
The herbicides farmers applied to crops to prevent weeds damaged shrimp beds for seven miles at the mouth of the Mississippi River in the gulf.
I did not go looking for the above but I happen to see it in a newspaper.
Warren Hannon
Out of the group, I think my vote is for niche sites. I've found that in my 5 years of SEO consulting experience, getting brand new websites to rank for niche-related keywords is extremely easy if you have the right domain URL.
However, this is not to say that I discredit any of the other mediums you mentioned. They all serve their respective purposes and are all powerful in their own ways. Great write up Mark!
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