All too often we're accused of being "negative" around here, by showing stories of failing businesses -- but we love the success stories even more. With various newspapers going out of business, and their bosses complaining that there are no business models other than charging readers (something that won't work for almost every newspaper out there), it's always good to see other examples that do work. A few folks have sent in a great writeup by Jonathan Weber, discussing a business model that can work
for some types of online journalism. Weber knows because he's actually making it work today via his company, New West, which just so happens to compete in the same market that recently "lost" the Rocky Mountain News.
As a four-year veteran of a journalism-driven local online media start-up, I believe there's a very viable business formula that's actually quite simple, and here today: take advantage of new tools and techniques to cover the news creatively and efficiently; sell sophisticated digital advertising in a sophisticated fashion; keep the Web content free, and charge a high price for content and interaction that are delivered in-person via conferences and events. And don't expect instant results.
And indeed, while Weber notes that his operation is still quite small and certainly isn't a replacement for a full newspaper (yet), it seems to be working for his operation -- with a big part being embracing new communities and new tools to make journalism much more efficient:
The editorial model relies on a combination of professional journalism (currently two full-time and four part-time professionals, as well as a number of freelancers); what we think of as semi-professional journalism (talented writers or subject-matter experts who do something else for their day job); and citizen journalism (bloggers and others who contribute on specific topics, sometimes for small sums of money). We don't have copy editors, but rather copyedit each others' stuff. We're direct and conversational in our style, which is actually easier and quicker once you get used to it, and more appealing to readers than old-style newspaper formulas.
We have a very active photo group on Flickr, and get great feature photography from that. We mostly use Google for fact-checking - not fool-proof, but it works. We use Twitter and Facebook and RSS to push our stories out into the world. We do great video-driven stories when we can, and happily link to others' videos. In fact, we happily link to a lot of stuff, sometimes in combination with our own reporting and sometimes not. We have lively comment threads, which we manage with as light a hand as we can and which are often additive to the stories in addition to being entertaining. We have very active event calendars in our local markets - separate from our main sites but well-integrated, and with a dedicated editor. We're experimenting with a new social media site in Missoula, and we'll see where that goes.
And for all the complaining about how online advertising can't support such a journalistic endeavor, Weber points out that the "common wisdom" is simply wrong:
On the business side, we've found that the conventional wisdom about plunging display ad rates is simply wrong. If you have a quality site, with good editorial that drives meaningful traffic, and you work closely with advertisers and offer them flash ads, video ads, good stats reporting, and the opportunity to help understand a new medium, they will pay a premium. A critical thing we have learned is that selling online advertising is more different from selling print or broadcast than mostly people think. I'd suggest that the difficulties traditional media outlets have in getting good prices for online advertising have to do not with the medium itself, but with the learning curve involved in figuring out how to sell it properly. It took us a couple of years, and we didn't have any legacy issues to deal with.
Everything on the Website is free, but we have about 1,000 people who pay $150 or $300 or $500 a year for their NewWest experience. This experience comes through conferences and events, which have been a major revenue source and an excellent promotional vehicle for our site. The conferences are content-driven - programming a conference is in many ways very similar to editing a magazine - and thus we see it as part-and-parcel of the journalistic mission, not a distracting commercial add-on. If anything, people like conferences even more when they spend so much time interacting via a computer screen. Conference attendees are our loyal subscribers, and they pay a lot for our content.
Yes, it's still an experiment, and it may only work for certain types of reporting -- but it's yet another example of a business model that works -- similar to numerous other ones that we've pointed out. I'm sure that, just as with the recording industry, some folks will continue to insist this is an exception and "it can't work for x, y, or z..." but just like in the recording industry, the more such "exceptions" we post, the more people will realize that these new business models aren't exceptions at all... but the rule.