Still no sustainable business model for online news? That’s crazy talk.
We love reading about online editorial success and greater activity in the hyper-local space. Yet most of these reports feature vague remarks about revenue plans still being explored and the perplexing challenge of finding a way to pay the newsroom bills.
CUNY’s Jeff Jarvis, NYU’s Jay Rosen & other veteran journos have been trying to crack the business model code for quite some time now. These entrepreneurial endeavors are well intentioned as they seek to support the emerging legion of news sites that may one day replace traditional newspapers. Seasoned educators like Jeff and Jay used their editorial credentials to wake up many online newsrooms. But that’s not going to move the needle enough. Now it’s time for seasoned sellers and revenue focused execs to step up and take the lead here. Maybe we need those with actual sales and revenue experience….. to tackle this sales and revenue issue?
Since 1998, we’ve been tracking and field-testing the leading revenue and sales models used by leading online operations. This research identified a robust collection of revenue models that are currently thriving in the local marketplace.
So why are most hyper-local sites still swimming in red ink, or looking for financial bailouts? With plenty of proven and active revenue models available for adoption…..are these models being intentionally ignored, or just mistakenly dismissed?
Here’s a summary of findings, recently submitted to CUNY’s New Business Models for News project. This is top line insight into proven business models, currently in operation at a variety of leading websites. Most of these best practices will not only sustain the NEW, news organization, but many will allow it to thrive with high margins, attractive profitability and better editorial coverage of the community.
7 habits of Profitable, Local News Sites
1) Lead by revenue-first executive (just like traditional media business)
- Profitability first, then operations, followed by editorial/content
- Run site as a start-up business
- Think like an entrepreneur…NOT just a manager or journalist
- Borrow tactics from online revenue leaders
2) Running extra-lean & efficient w/content & platforms
- Open source platforms, software & applications
- Outsource content via feeds, blogs, indie-journalism
- Aggregation & curation. Do what you do best, point to the rest
- Aggressively strip out & reduce hard costs/expenses
- 24/7 news cycle; Twitter = first responder journalism
- Hard news & data as commodity loss-leader
- Monetizable soft news & activity, subsidizes hard news
- Data as content
3) Advertiser & sponsor friendly
- Enabling local commerce is priority #1
- Advertising as content
- High impact ad units & sponsorships
- Removal of GAN’s; garbage ad networks
- Feet on the street-sales efforts
- Local business education via Web 101 workshops
- Self-serve & outbound tele-sales
- Ability to show quantifiable ROI
- Local & regional advertising networks
4) Non-traditional revenue streams
- Rev-share, transaction fees & e-commerce
- Free-miums & up-sells
- Offline initiatives & live events
- Marketing services for local business
5) Training, management & compensation
- Regular training of all staff (especially top management)
- Performance based compensation
- Mandatory budgets with bonus & penalty
- Managers lead by example, not from behind desk
6) Seed, syndicate, socialize & mobilize
- More than just a destination site strategy
- Leverage & monetize content anywhere & everywhere
- Enable formation and leveraging of affinity groups
7) Database mining & video adoption
- Sales and editorial appreciation of well-defined databases
- Sales-based uses of video; online infomercials & ad-vertorial