7 Habits of Profitable, Hyper Local News

May 22, 2010 By
CUNY New Business Models for News

CUNY New Business Models for News

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
Filed Under: Hyper Revenue Watch, Hyperlocal Networks, Popular Posts Tagged With: , , , , , , , , , , , , , , , , , , ,

Hyper Local Business Models 2010

April 26, 2010 By

Online advertising & digital investments are roaring back. Yet after substantial resource infusions, most local news sites and hyper-local initiatives are still struggling, or are shutting down. We recently found out why this is happening, and what the solution is to this online revenue issue. Both are simple and supported by historical evidence.

The early days of Newspaper giants such as James Gordon Bennett, E.W. Scripps and Joseph Pulitzer offered many clues that confirmed one of our earliest theories. (Hat tip to Howard Owens at The Batavian.com) These men were first and foremost, entrepreneurs and sales men. They clearly understood the need for immediate cash flow to support their journalistic efforts. They experimented with new technologies of the day, slaughtered a few sacred cows, and did whatever possible to quickly build a Newspaper business model that was self-sustaining, scalable, and NOT primarily supported by subscribers and donations.

Recently, we were approached by a group of investors looking to conduct a study on potential opportunities in the local online space. Of course they wanted intelligence on websites that showed significant editorial or traffic gains, as well as trends in local advertiser spend. But more importantly, they wanted a deeper look into the eco-system, projects & trajectories that could be considered un-discovered gems of ‘value creation’. In other words, projects of community interest that were combined with content, functionality, management teams & revenue potential…..worthy of investment.

Some findings of note:

  1. Out of 50 sites and companies that were in the study, only 6 were run by an executive, journalist, or Interactive VP with any significant sales or revenue focused background.
  2. A whopping 90% of sites we studied, primarily structured their web model from an editorial & technical perspective, with minimal revenue strategy baked in from the beginning. These sites combine technology & journalism to build readership traffic, which would then presumably attract advertisers. Advertiser support for these efforts were either limited or non-existent.
  3. Most sites are captained by journalists, pro-am bloggers, or executives with similar characteristics. Most came up through the newsroom, editorial/programming departments, or imported from Internet pure-plays
  4. Major sites run by larger organizations had a cadre of advisors and consultants that were intellectually seasoned and arguably first rate. Their board of directors were chock full of academics, journalists, futurists and research consultants. Yet, less than 10% of the sites we studied, had an advisor or board member with actual sales experience.

Initial recommendations from this study

  1. “Build it and they will come”  no longer works as well as it used to. Revenue needs to be primary consideration.
  2. Beware of using faulty data & research from sources with limited hands-on experience with ad community.
  3. The retro-fitting of revenue tactics into an online news model after reader traffic has been established, is an increasingly flawed strategy that is blindly followed by far too many online operations. While online news sites certainly must have smart editorial & content focused executives, our research strongly suggests the importance of placing a revenue focused exec, side by side with editorial, in order to work con-currently on the challenge.

Part 2 & 3 of this report includes greater detail and recommendation. Please email us for details.

Filed Under: Hyper Revenue Watch, Newspaper, Popular Posts Tagged With: , , , , , , , , , , , , , , , , , , ,

Web Revenue 101 for Weekly Newspapers

April 6, 2010 By

Below is my latest presentation from the New York Press Association’s Spring Conference. This well-attended event was held in beautiful Saratoga, NY on March 27, 2010.  It was great to see the room filled with many publishers & editorial staff…and not just sellers. 

As we strongly urge: when your newsroom, programming & marketing folk understand basic online business models……they’re more likely to help create profitable websites.

Web Revenue for Weekly Newspapers 2010

Filed Under: Hyper Revenue Watch, Newspaper, Presentations Tagged With: , , , , , , , , , , , , , , , , ,

Can Radio Build Hyper Local Web Business?

December 21, 2009 By

Ever taken a really good look at some Radio station websites? Aside from the layout and content, (some harshly call them a train-wreck) have you ever wondered how Radio can build a hyper-local business, and drive Internet revenue from these efforts?

Radio managers are knee-deep in these issues right now.

The pressure is on. While Radio’s primary revenue stream of selling spots has become much more challenging, there is an upside. Radio has the best of both worlds; on-air and online.

And it’s not just about selling banners and streaming spots. More importantly: Radio has ability to leverage it’s digital assets, to go after more of their client’s overall budgets. THAT’s a key distinction that separates the winners from the losers.

How can Radio seriously get into hyper-local game? First, it must admit that they need more outside help. Today, there are still too few people inside of the industry that have a handle on the fast changing digital landscape. Research, cool aps, and streaming will not be enough to get it done. And just relying on the local sales managers, or the GM’s to develop a strong web plan will only delay the pain of making a serious investment in hiring and re-training. Finding web-sales experts to help Radio will not be easy, but it will be necessary.

Filed Under: TV and Radio Tagged With: , , , , , , , , , , , , , , , , , ,

CUNY Hyper-Local Online Revenue

November 16, 2009 By

Jeff Jarvis held a hyper-local, mini-camp at the Graduate School of Journalism in NYC on Nov. 11, 2009.

It was called: The  New Business Models for News  conference.

I was invited to do a session focused on helping hyper-local web publishers, build realistic business models in order to grow revenue. Here’s the actual presentation:

cuny preso 1.10FINAL

Filed Under: Hyper Revenue Watch, Revenue Models Tagged With: , , , , , ,

TV vs. Newspaper; Local Online Video Battle

November 16, 2009 By

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A movie about a local TV news team anchored by Ron Burgundy, becomes a hit. Did the writers really have to stretch their imagination in order to come up with bits for this Will Farrell flick? Not likely. For fodder, they just turned on the local newscast of Anytown USA.

Local TV news; Change or wither. Andrew Hayward, former president of CBS News, shared his thoughts about local TV news, and he pulled no punches. You don’t have to be a mind reader to pick up his vibe……. it better change, or it’s doomed. Here’s what I gleaned up from his speech via an article in a Louisville newspaper. Read the entire article by Rick Redding here.

  • Local stations focus too much on crime/murder, since it’s easier to do and video friendly.
  • Viewership is shrinking, blood ‘n’ guts stories aren’t relevant to audience.
  • Breaking News Alerts …..sensationalizes events that aren’t really news.
  • Local, linear newscasts: no longer needed in a world of unlimited, on-demand news choices.
  • Nobody under 40 is watching the local anchor. They don’t even know his name.

Some steps to fix it:

  • Hire journalists with a different look, who have roots in the community.
  • Hire more of those with an expertise in a specific topic or category.
  • Don’t always hire a model with a master’s degree in broadcast journalism. Instead, consider hiring a less-qualified local with less-polished look, and give new hire the freedom to find humor in news stories.
  • Get more VJ’s on the street. (video journalists). Capture more local video with substance.
  • See Online as real-time 24/7 newscast, NOT a dumping ground for stale packages from last night’s 11pm cast.

[Read more...]

Filed Under: Revenue Models Tagged With: , , , , , , , , , , , , , , , , , , ,

Online Video for Revenue

October 14, 2009 By

Things I hear from local media clients about video:

  • We’d LOVE to do more online video; but it’s cost & manpower prohibitive right now.
  • We’re shooting video and posting it….where’s the money?

Online video needs to be SALES based for now.

For publishers, there just isn’t alot of investment capital to put into a huge online video initiative right now. So here are the basic, boot-strapping ways to get started in the world of online video.

Equipment, Software and Hosting: Click below to watch a simple video I produced employing many of the recommendations in this post.

I shot all the stills and video with a basic consumer camera, purchased from a local Best Buy; the Canon Powershot. I carry this thing everywhere….so should your reporters…..ya never know when you’ll be near news worthy subject matter! For a digital still camera, the video quality is surprisingly good. This was edited with a $99 software program called Adoble Premiere Elements (could have easily used Windows Movie Maker or Apple’s i-Movie which are built in, on all computers), ……..I used Picasa for free photo editing……used Blip.TV and YouTube to easily post and share/embed my video for free.

Click here to read entire post

Filed Under: Revenue Models Tagged With: , ,
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