A new business model for local news may be on the horizon
How important is the news to you?
Well, you are reading this, so it must be worth something. The trick for those in the newspaper business is to determine how much it’s worth to folks like yourself.
Across the country, news organizations are meeting to discuss possible future business models for our industry. The City University of New York Graduate School of Journalism also started a project to this end. Last week, I attended one of these meetings at the University of Minnesota.
I have to admit it was a little depressing. We’re well aware that subscriptions are down with folks getting much of their news online for free. Advertising revenue is drying up. Individuals don’t want to spend money on newspaper classifieds when they can just go on Craigslist. Real estate and vehicle ads, a large portion of our revenue, have found larger audiences on the web. None of these circumstances are bound to change. It’s clear the news industry needs a new business model.
So what does that leave us with? Can we viably charge for online news? Should we adopt a funding model similar to public radio or television? Should we let the government help us out with special tax breaks? Or perhaps, gulp, we should raise the white flag, surrender and fade into oblivion.
I’d like to think we have a value beyond most other “products” in the marketplace. As a professional journalist, I like to think that for a vibrant democracy, the public needs the news we provide.
But what should we conclude when readers seem to balk at the idea of paying for our news online? What should we think when advertisers don’t realize the value in the kinds of advertising we can provide?
Some of the options before us include an Employee Stock Ownership Plan, turning the news organization into a co-op, adopting a public broadcasting model, or becoming a nonprofit much like MinnPost.com. An exciting new option may come in the form of a low-profit, limited liability company or L3C.
An L3C is a hybrid of a nonprofit and for-profit organization. Much like a limited liability company (LLC), it is designed to attract private investments and philanthropic capital in ventures designed to provide a “social benefit.” It’s primary charitable mission would trump the secondary profit-making mission, but unlike a charity, an L3C can distribute the profits, after taxes, to owners or investors.
Bernard Lunzer of the Newspaper Guild said the focus of news organizations should be on preserving a diversity of voices and reporting, and not on preserving a cash stream. I think most working journalists see it that way too. Still, we have to face the fact that what we do day-to-day costs money. If we don’t find a way to fund the work we’re doing, the work we’re doing won’t get done, or at least not done as thoroughly, accurately and exhaustively as it’s being done now.
Despite the harsh reality of it all, I still think aspects of our original model could save us. As a news junkie myself, I’d be willing, actually, happy, to pay a monthly subscription for my favorite news web sites. I don’t think news organization owners can expect the profit margins of years past, nor do I see the print product continuing on indefinitely. In fact, with the costs of printing and distributing newspapers so high, the migration of all news to the web could make a subscription business model viable again.
The trouble is, news organizations across the country are largely independent of one another. If only some switch to a paid subscription model, audiences would simply go for the remaining free news. It seems to me we all, not just journalists, need to stop and decide if news is really worth something. I’d like to settle it before we all fold.
This business of discussing the future of journalism can be depressing for us newsies. I just want to know if the optimism I cling to is misplaced, whether or not the new model will have room for the values and principles we hold as journalists or if an entirely new, completely different model of “informing” is on the horizon.
As one of the conference attendees posted on Twitter: “you have to wonder whether the dinosaurs did this about mammals.”
Without giving what you read too much thought:
No, you can’t just raise the white flag and surrender and no you can’t expect viable returns if you charge for news online as it will drive people to free news as they accept the inadequacies that come with free news.
What “we” are you talking about? Is it Thisweek or the greater news world? If you’re talking about Thisweek, no, the public doesn’t need all that you currently provide. Drop the sports, the fluff, and the other inane press releases that you write and instead focus on limiting the articles to what’s important. With that will come revenue gains as unnecessary staff is dropped and advertising space increases.
When I quoted the Time article in another thread of yours which I am too lazy to dig up again, it stated that in areas without local news people were less likely to be informed of local political news and thus were prone to find themselves locked into poor governance. Make sure that you continue to provide what is absolutely necessary to the people and let the market find a way to fill the other void. I guarantee you that if people want sports or fluff news, someone will spring up with a way to do it in a viable way.
I guess I am missing the big secret as to what newspapers provide that any other media outlet does not. I find newspaper advertisements to be intrusive, unnecessarily expensive, and for the most part outdated and hard to track ROI. Please do tell me how you can validate charging what you do for an advertisement that may go out to 25,000 people weekly when a website reaches that many every single day with the ability to track much more than just general demographic information about the reader?
Bloggers currently do not have the same quality content that professional journalists do but they are providing somewhat lower quality information for free, on their own time, and sometimes with far better resources available to the reader to make up their own minds about the topic than the newspapers do. Why is that? I’d be asking yourselves, “why is it that some random idiot with a computer, a car, and a telephone can provide information to a group of people in their spare time and for free when we cannot?” To me that would be the number one question to be asking yourselves when your sitting around poo-pooing the situation you are all in.
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Another great piece Jeff, thanks for sharing. It’s always interesting hearing from journalists about how they deal with their business model.
In studying journalism at the University of Minnesota, I quickly learned I eventually wanted to work for a non-profit newspaper. That was by choice. Now, it looks to be by force.
And that is what saddens, nay, sickens me.
Why have journalists glorified their work through profits instead of the self-satisfaction that comes from public service?
Bill wrote: “If you’re talking about Thisweek, no, the public doesn’t need all that you currently provide. Drop the sports, the fluff, and the other inane press releases that you write and instead focus on limiting the articles to what’s important. With that will come revenue gains as unnecessary staff is dropped and advertising space increases.”
I was speaking generally about “professional journalism.” I actually like your suggestion about dropping sports and “fluff” news. Of course, it’s a pretty radical idea in the halls of the hallowed newspaper office. I also think going completely online will drop the dead weight of printing and distribution costs. And, there’s plenty of self-promotion and user reviews online to take the place of news feature pieces for the most part. And most sports information is available in so many other places, not to mention all the moms, dads, and school web sites dedicated to their beloved teams.
Bill wrote: “I guess I am missing the big secret as to what newspapers provide that any other media outlet does not.”
Actually, when I wrote that line, “What should we think when advertisers don’t realize the value in the kinds of advertising we can provide?” my editor changed my wording there a little bit. I had originally written the sentence as, “What should we think when advertisers can find a larger audience on the web?” But, since my name is on the final piece, I gotta own up. I think you’re right about advertising in the print newspaper. Our audience isn’t that big and the price for ads is ridiculous. But, my observation has been that the whole print and online pricing rate scale is backwards. Print prices aren’t based on reach anymore, but on what we can get away with charging. When advertisers stop paying what we’re asking (which may be happening) then you’ll see change. They don’t pay that much cause it works, they pay that much cause they’ve always paid that much. Star Tribune has known that for a while now and has been dropping their prices like crazy to try to keep advertisers. This whole thing ought to be a huge wake up call to our company and others like us, but we here at Thisweek continue to build our “products” on this model and revenue source. In the case of the newly redesigned Dakota County Tribune Business Weekly, it seems to be working for the time being.
Bill wrote: “I’d be asking yourselves, ‘why is it that some random idiot with a computer, a car, and a telephone can provide information to a group of people in their spare time and for free when we cannot?’”
I don’t have to ask myself that. I already get it. What I want to know is why more professional journalists aren’t taking their cue from citizen journalists, bloggers and teeny-boppers? Journalists today should be tweeting, posting stories/photos/videos from their iPhones and Blackberries, and joining the conversation, nay, leading the conversations on social media networks, web sites and blogs. But alas, we still have journalists who don’t have cel phones and don’t plan on getting one anytime soon. We have reporters who think Twitter is a waste of time, a joke and writers who think their work week should end on Friday and not start again until Monday. Professionals pride themselves on the refinement of the fundamentals, good writing, sound research, credible sourcing, but we’ll have to change our approach to the craft of writing, gathering and producing news if we wish to attract paying consumers of news.
Jeff, awesome reply. Thisweek better be thanking their lucky stars to have someone on staff that is as close to the real action as you are.
Now about posting more frequently here… ;-)
Dear Jeff,
First, I can understand your frustration, because you are the closer than any of our newspersons to to developing on-line news and the resultant on-line advertising. This distorts your view to what is happening in our company and other weekly community newspapers.
Our company is profitable with this model, based on three legs of the stool: print and on-line publications, distributation and commercial printing.
One reason we are profitable is because we have a management committed to good community journalism and unlike the metro dailies and yes Sun Newspapers, we are able to manage our debt. We even are redeeming shares of stock. We will finish this fiscal year with a profit, knowing that some is due to trimming employment. I think it’s interesting that to my knowledge we have not released any full-time news staff members.
We have good lean management at the top and on-site.
My own belief is that while the newspaper business will never be the same because of costs and loss of revenues to the internet, we can remain profitable and viable. I believe when the economy comes back to normal, our business will improve.
Our business is providing local news and information to the public. My belief is that if we give the public information they want, they will read it on either medium and advertising will follow on-line and in print.
Our task as professional journalists is to not only report the local news but to create an interest in it, and that’s where new journalists fall down for whatever reason.
In northern Dakota County, there seems to be less of a community spirit, largely because people are more interested in just living and making a living than in being involved in their community.
There’s a difference in interest and in advertising response among our various communities. It seems outlying communities have more community heart and interest than inner suburbs, who for years have been tagged as sub — not whole communities.
I believe the community weekly newspapers that know what they are doing, and ours do,will make it for some time to come serving up local information and news people want.
In the future, I think the best model will be local news tabs full of information readers can’t get anywhere else. The new business tab may just be one we can charge for.
I hope this gives you some perspective.
Keep up the good work. You are a good journalst
Don Heinzman
I fear for the future of news if the self-proclaimed leaders of the cause are playing dead like a pathetic puppy in defending the print edition.
There is no such thing as “breaking” news in the print edition, but there is “in depth analysis,” something Twitter does not provide and blogs can’t support with their lack of credibility.
Jeff, I know you are an online guy and I’ve enjoyed going to your ECM seminars to learn new things, but you have to realize that journalism is not only about shooting a video, stalking “sources” on Facebook or tweeting that you have a new podcast up.
Journalism is about informing the public, first and foremost.
As a fan of the Daily Show with Jon Stewart, you do realize that he JOKES about the death of newspapers. He himself reads the print edition everyday and supports the print edition. He is genuinely “depressed” about America’s lack of interest in newspapers.
If you don’t believe me… I beg you to really take the following Jon Stewart quote to heart. He made it while speaking to media print reporters at a breakfast he organized before the Democratic National Convention last year:
“We’ve fallen into this false sense of urgency that they create,” Stewart said, speaking of the 24-hour network and online news cycle. “That idea that everything is breaking news and that if you’re not watching us, you’re going to miss this thing.
“But nothing they’re saying is of any importance because nobody filters it. (Print reporters) are able to step back for a moment and think. They’re not. They’re just pointing a camera and saying, ‘What do you think that is? I don’t know. Let’s go to ‘The Situation Room.’”
BOOM!
I hope those believing they are leading our industry into the future are doing the right thing, and not just the profitable thing.
I don’t know if this is the proper forum for discussing the health of ECM’s newspapers, so I won’t go into too much detail. And, I agree that overall we’re actually doing great. However, we here at Thisweek did let a full-time sports reporter go and made the decision not to hire another reporter after our full-time news reporter left last summer. We also let our part-time copy editor go. I’d call that trimming. We seem to be feeling the pinch much differently than the rest of ECM. Fortunately, we’ve made some good investments in online. I consider myself very lucky to be a part of ECM. It really is a fantastic company to work for.
And to Matt, of course I believe newspaper reporting is invaluable and unique. I believe that the print edition will be around for a long time to come, though maybe not forever. ECM is especially positioned to continue a print newspaper and commercial printing enterprise for a long time to come. Many of the papers in our company have a corner on their respective local news, classified and advertising markets which makes them extremely profitable. Not to mention how valued they are by community members.
Thisweek is in a bit of a different situation however. We have an extremely saturated newspaper market with the Strib, PiPress, Sun, Rosemount Town Pages, Farmington Independent and Hastings Star Gazette to compete with. Our classified and advertising market is also saturated and because we are closer in to the major market of the Twin Cities, advertisers have many options more appealing than our print editon.
When I espouse the merits of video, podcasting, RSS, online and mobile delivery, blogging, online forums, and social media such as Twitter, Facebook and LinkedIn, it’s my hope that more print journalists will embrace these as TOOLS to keep a finger on the pulse of the local community, with many people in it living their personal and professional lives online.
I agree that depth is critical in our coverage. That’s why I work at a community newspaper. I could have continued my career on television, but I see more value and depth in the newspaper side of journalism. However, we cannot ignore the demand for immediacy. People are becoming accustomed to breaking news on TV, online and on their mobile phones. If we do not position ourselves to provide news about our local community through these mediums, we risk being passed over for a bunch of amateur photos on Flickr or God forbid, Bill Roehl’s blog. (Just poking fun here Bill…)
The frustration I’m expressing comes from seeing journalists who don’t see the larger trends in news consumption, and subsequently dismiss the changes we need to be making.
I will argue with you on the point that there is more depth in print compared to online. We here at Thisweek are seeing our print space shrink as advertising dries up. Less room for our in depth stories means they go online. Online, they can breathe. They can hyperlink to graphics, maps, timelines, videos, photos, blog posts and comment sections. This is all good for the kind of depth and context you champion. Online journalism lets people explore stories in ways NO OTHER MEDIUM can. That’s why I’m a “leader of the cause”. I want to see journalism thrive in all mediums, but the changes taking place with the business model and the news consumption habits of our community members should force us to think beyond a print product as our central “product”. If you’re at a paper that isn’t facing these types of changes to your business model or your readership, then I’m happy for you. Keep practicing excellent community journalism. Keep making ECM profitable and sustainable so we can execute our mission and make our communities better.
I see where you’re coming from, but the argument that in depth journalism falters because “print space shrinks as advertising dries up” doesn’t cut it.
I’m not saying it’s not true. In fact, even though I don’t see the bottom line with my lowly position, I trust you’re right. But we need to fight back against that as journalists. For-profit newspapers only go to print because of revenue generated from ads, but people only read the newspaper because of its news content.
I wish people were more open and honest and frankly critical of the industry’s failing business models.
I respect and agree with most of your ideas for how online can amplify the fact-flinging freedom of print. However, as it relates to business models, I think online and print need to be two separate entities. Perhaps it should be considered that online generates revenue and print is not-for-profit.
Maybe my argument isn’t even approachable, but here is the very basic point:
If Journalist A writes a story about how the local government cut funding for area projects — maybe a road or a park — journalism B can generate online content to compliment Journalist A’s work.
But, if Sales Person A loses a print advertiser, should Journalist A’s work, or even more drastically should Journalist A’s job, be cut?
Profiting from Journalist A’s work is not realistic, but profiting from Journalist B’s work is very real. The multimedia aspects of Journalist B’s online content could be “brought to you by Advertiser A.”
Journalist A’s work needs to be “brought to you by the public and for the public.” You can’t cut that work because of a lack of advertising.
Until the taxpayer realizes the value of journalism, they won’t support it in print form. We need a public relations campaign, perhaps funded by taxpayer dollars, to wake them up!
What’s not helping is angry talk-show conservatives polarizing the issue for their own commercial purposes! People listen to these puppets as if they are truth tellers, so when they say that “journalism is dead,” people believe them. The credibility of our product has been under attack from the outside of the industry for some time, and we need to avoid attacking it from the inside now. Journalists have made their mistakes and taken their cues when they shouldn’t have, but we will be better for it. Hopefully we’ll come back stronger with a socialized (oh my gosh, how dare I say the word) business model.
Dear all,
I did not realize that my comments were linked to so many of you. I believed I was writing to Jeff, Bill and Matt. I think this discussion is useful and on the mark.
I believe that the news business is changing and that we need to use all possible technological tools.
I believe we make a mistake when we compare the fate of good weekly products in spirited communities to what’s happening to metropolitan dailies. We all know the problem with the dailies and the Sun papers is the owners paid too much for them and the papers, though profitable, cannot make the debt payments.
I know the numbers and I can tell you that in our company as well as at many other weeklies, print products, distribution of those products and printing of those produts make up most of the revenue.
I have no doubt that the readers, particularly those younger readers, are changing their information sources.
I however, question how people either get or prefer to be informed about news in their community. That’s why I am a champion for surveying readers to answer this basic question.
I think we’d be surprised at how many say they depend on their local papers for the news about their community. While I lament the loss of younger readers, that’s part of our readership and our future, but we have many of the boomers and beyond that read newspapers for local news.
I know that Thisweek surveyed its readership and came to the conclusion better to have three distinct community newspapers than to have one regional one. That suggests people want a local paper with news they care about.
Until a better business model comes along, staying with the present one while incorporating all of the on-line tools, is very important. That’s not me putting my head in the sand. I believe we should maximize what print does and what on-line does.
For example, print cannot do slide shows, pod casts, twitter, facebook, tv shows, video and we should maximize use of them.
On the other hand, print, while not immediate, can inform not just in-depth stories, but all the stories and opinions the community cares about in an easy-to read format.
Let’s make the best use of all of our media to inform our communities so readers can continue to make good decisions about the direction of their communities as they follow and elect qualified leaders. That’s what our readers expect in a free society.