Last week I gave an all-day seminar to 30 journalists in Valencia, Spain, on the business aspects of starting a digital news outlet.
It‘s easy enough to launch a blog or web page, but the hard part is making money. I gave participants a series of examples of revenue sources other than advertising and subscriptions:
- Selling data. The American City Business Journals chain has made a huge business out of its Top 25 lists of largest businesses in various industries. Each newspaper´s Book of Lists is offered electronically for $399 and in downloadable form for $169.
- Memberships. When people really like a site, they‘re willing to help keep it going with contributions in exchange for benefits. Texas Tribune has nine levels, from $10 for students to the Chairman‘s Circle at $5,000 a year.
- Events. When you create an online community through a website or blog, the followers want to meet each other in person. Events can generate cash from ticket sales and sponsors interested in reaching the audience. Trading advertising for catering services increases profit margins.
- Direct sales. The Telegraph of England has cut out the middle man and opened up its own department store online. There is software available (examples here) for independent sites to do the same. Unique local products might work best.
- Consulting services. Mivoz.cl of Chile, formerly Diarios Ciudadanos, generates $2 million a year by developing web sites for third parties. La Silla Vacía of Colombia is doing something very similar by advising businesses on how to communicate in the digital world.
- Daily deals. Groupon isn‘t the only player in this space. Other services such as Analog Analytics are working with publishers to offer such services.
- Community minded donors. Propublica was financed with a $30 million donation from the Sandler family, $5 million in seed money for the Bay Citizen came from financier Warren Hellman and a $1 million contribution to the Texas Tribune came from venture capitalist John Thornton.
- Non-governmental organizations. The Open Society Institute has funded many independent media projects in Latin America.
- Apps. Offering a news product on a smartphone or tablet is generating income for many news operations.
The day after the workshop, I did a live chat Q and A with the local newspaper, Levante. Here is a sample of some of the exchange:
Q. For a journalist who wants to launch a news operation, where is the best place to start?
A. First, think about creating a community, about serving a particular community. You have to offer something unique and different to a specific group of people in a well defined niche. You can‘t offer what everyone else is offering. Some niches might be environmental coverage, health, education, local businesses, women‘s sports, the local art and music scene, etc. Pick something you care about and that the mass media are neglecting.
Q. How does a young person find financing for a web 2.0 operation?
A. Banks and venture capitalists don‘t usually bet on young people without a track record. Start with family, friends and associates.
Q. Should a new online venture assume that its future lies with tablets and smartphones or are these a passing fad?
A. The important thing is to be platform-agnostic, meaning that you focus on the content rather than putting all of your energy into developing a product for a specific platform. Platforms will evolve and change. Your content needs to have lasting quality.
Q. What would you say to the old guard who view new online media as a threat to their circulation and a haven for tech freaks?
A. I would tell them that they have to change. We journalists are no longer in the center of the media universe. The audiences are now running the show. Although we‘ve lost our status as media authorities, this new digital world offers us opportunities to get closer to audiences and serve our communities better. I started in the news business using a typewriter, but the new tools of technology offer great advantages and have allowed me to improve the quality of my journalism.
Related:
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Robert Niles: How to Make Money Publishing Community News Online
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Dan Gillmor: We need more experiments with revenue of media startups
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