contemplating web-pub revenue models

From what I can tell after reading a lot about start-up web pubs in the past week, there are three primary business models to consider for web publications - a subscription model, variations of a nonprofit model and an advertising model.  

While subscriptions are the ideal for many publishers, we're definitely not there yet.  As I look into a rosy future, I see a marketplace where web content has value.  Let's hope that news isn't a commodity just yet and that there's still hope for this scenario.  Perhaps the bigger brands (eg WSJ and NYT) can step into the subscription waters first (note that WSJ had this model 8 years ago) to create a new online marketplace. Yet, Jonathon Landman, Deputy Managing Editor at The New York Times, told alumni of Columbia Journalism School this past Saturday, “imposing a pay wall could be risky without being that bold,” referring to the expected loss in ad revenue that could occur if subscription fees are imposed.  So, advertising isn't cutting it, but will subscription fees make up the difference or create a net loss?

There's also a lot of talk about a nonprofit model for revenue-depleted papers. The thinking is that news organizations will give up on profit altogether, their purpose being solely to deliver free, accessible news.  A philanthropists' vision and generosity is how ProPublica.org came to be, http://www.propublica.org/.  The site is dedicated to “saving” investigative journalism, a style of reporting that has been cut in many major news organizations due to the associated cost burden.  Herb and Marion Sandler have put up $10 Million for Paul Steiger,  former managing editor of The Wall Street Journal, to produce ProPublica.com. The site’s stories which focus on abuse of power, have quickly been adopted and are appearing in 60 Minutes, The New York Times, L.A. Times, Politico.com and many other reputable forums. 

On the other end of the NP spectrum is DavidsonNews.com, a web site that has taken the public radio approach to subscriptions, making appeals on the website, through email and through direct requests to readers, business owners and local leaders.  For Publisher David Boraks, the appeals are working. “At a time when our town is growing and our sense of community is threatened, these people understand how a local news site can provide a shared experience that can hold us together, “ said Boraks.  Nearly 250 residents have contributed an average of $60 each though Boraks knows that the number needs to grow substantially if he’s ever going to receive a paycheck.   

Vivian Schiller became CEO of NPR just six months ago after exiting as VP and General Manger of NewYorkTimes.com and believes that the nonprofit model won’t work for many media companies.   Schiller cites a list of reasons including the difficulty of raising money in a down economy, the rarity of finding an endowment big enough to cover the needs of an news organization and the conflict of interest that occurs when any donations are mixed with a for-profit model.  http://www.newsweek.com/id/208703/.

The earliest and most common way of supporting online ventures is advertising. Though online revenues haven’t replaced dollars lost from classified and retail ads at major newspapers and magazines, the overall trend has been and will continue to be for marketers to shift money online.  Mansha Daswani wrote about the migration in Worldscreen.com saying, "Advertisers are following consumers to new platforms; a recent Forrester study indicates that 63 percent of global CMOs expect to increase their interactive/online marketing spend while 65 percent expect to decrease traditional advertising."  Online will continue to offer tremendous targeting opportunities if news sites can provide advertisers with an active community and data about those visitors that is relevant to their campaigns.  

So there are possibilities; avenues to pursue.  What media companies must deeply consider is the type of news environment each scenario will produce - it it what readers want, what they're are asking for?  Media companies are playing catching up to consumers.  We should have learned our lesson - a customer's perspective is all that matters. Let's keep that in mind as we go forward. 

gatekeepers and the web

New York Times Op-Ed contributor Bill Wasik has a nice piece in today's edition about young people making it in creative pursuits and the differences in their paths if they physically move to New York or promote their work online. http://www.nytimes.com/2009/07/30/opinion/30wasik.html?pagewanred=1&_r=1

Wasik makes comparisons that illustrate the likeness in metropolitan and internet communities - that in each case a perfect storm of creativity, timing and favorable subjectivity must align to provide the "big break" that can propel a career.

He also writes about tratitional gatekeepers in New York City - established people who control access to an audience and, in doing so, "protect young people from an audience, its obsessions and desertions, its adoration and its scorn."

This allowed me to think about the role of gatekeepers or lack thereof on the Web. If you're planning on pushing your work out through websites or blogs, you don't have to worry about gatekeeper as barrier - you don't need anyone's permission. However, you don't have the gatekeeper's insight and connections to leverage either. The public - if you can reach them - decides immediately and directly.

Web gatekeepers can take the form of VCs and angel investors for entrepreneurs trying to introduce web products or publications. These gatekeepers provide consultation and cash to keep an idea and business model moving.

Regardless of what we're trying to sell or where, the people who help us, those who are in the know or have capital and connections, will play in important role. The YouTube overnight success is the rare exception. Though the Web provides opportunity and cheaper access, that opportunity and access is for everyone thus making competition very, very steep. We still need all the help, advice and protection we can get.

Emotion and Racism

By now we’ve all heard about Harvard Professor Gates’ erroneous arrest http://www.boston.com/news/local/breaking_news/2009/07/harvard.html, President Obama’s initial response and his regret for how he worded that response http://thecaucus.blogs.nytimes.com/2009/07/24/obama-expresses-his-regrets-on-gates-incident/?hp.   Rationale for why Obama shouldn’t have used the “stupid” reference include prematurely judging law enforcement before having all the facts and that getting involved in the first place was less than "presidential."

I fall on the side of seeing things through Obama’s eyes.  I believe that he acted with pure emotion, not political reason.  He reacted as an African American President, not just any President.  I don’t think his job title should transcend years of feeling, studying and fighting racism. Obama’s dedicated his life to community and the position of minorities far before he became a politician.  This sympathy - and anger - toward racism is imbued in his soul. 

In many other instances, life experiences come to bear in public life, even in policy making.  It would appear downright unpatriotic for us to criticize a pro-war politician - say John McCain -  for resting on his or her own military experiences when reacting to current International conflict.  John Edwards supports poverty initiatives because he grew up poor.  And aside from benefits to business, George Bush saw the immigrant experience more closely than others because he spent most of his life in Texas - and supported immigration accordingly.

In regards to racism, listen to Pat Buchanan on the Rachel Maddow Show talk about Supreme Court nominee Judge Sodomayer.  Definitely still a topic that needs faced and addressed. 

notes from up North.

I’ve spent the past five days “up North” with my family.  It’s our annual vacation and we decided to spend it in the Traverse City area of Michigan.  A drivable, modest vacation like this one seemed appropriate in a year when simplicity makes sense.  Yet I’ve felt very fortunate to be here.   The weather has consistently been in the mid-70s, people are exceedingly cheerful and everything is accessible for a family of four with parents and a dog in tow.   We’ve spent days at the water’s edge and evenings around the campfire with spikes of excitement in between that include kayaking and sand dune climbing.  

At the moment I’m sitting in downtown Traverse City at a modern coffee shop called morsels, http://www.morselsbakery.com, where the pastries are bite-sized, of course.  You can buy just one morsel for .89 if you have that much willpower, four for $2.99 or a dozen for $8.49.  The names are clever and the flavors delightful.  ginger or mary ann? is ginger cake with candied ginger bits and orange glaze.  devil’s in the details is cream-filled devil’s food cake with dark chocolate ganache. I’ve learned that the business was started by a young couple who wanted to leave the corporate world to spend more time together.   Both former architects, they now wake at 4 to “make the morsels,” toddlers in tow.

If you’re an audiophile like my son, Sound It Out Records, http://www.sounditoutrecords.com, can’t be missed as their selection of records is the best in the area - second only in my personal experience to Shake It Records,  http://www.shakeitrecords.com, in my hometown of Cincinnati.  Everything seems to be a value here.  $5 for a giant bowl of corn chowder with big pieces of crab.  In nearby Sutton’s Bay where we’ve rented a home, you can find waffles loaded with Michigan cherries or blueberries for $5 at the 45th Parallel Café, http://www.suttonsbayarea.com/restaurants

The Parallel Café gets its name because, yes, we are located half way between the equator and the North Pole. 

We’ve had as many questions as discoveries this week, particularly about the area.  Traverse City is loaded with adorable early-20th century homes painted to perfection located on lovely tree-lined streets.  Yet other than tourism, we can’t find the industry that supports the comfortable community.  Obviously the place is hopping in July and August yet what happens the rest of the year?  Is the community close-knit and consistent or are they wealthy snow birds who flee to Florida?  Do they still meet at the Organic Green Leaf Café in the morning to discuss politics?   

Lake Michigan is dotted with towns like Traverse City and Sutton’s Bay up and down the waterfront.  Perhaps the residents in these enclaves experience two communities.  The summertime community may be one of work, a time to gather money while the rest of us play.  The other nine months may be the “real” community, uncluttered by necessary tourists and a time to own the streets and the beach that you call home.   I simply can’t travel to a destination without wondering what it would be like to live there full time.  If you’re curious about Northern Michigan, find out much more at http://www.michigan.org or http://www.michiganvacations.org.  

Are All Politics Local Anymore?

Tip O’Neill, longtime Speaker of the House, once said “All Politics Are Local,” to explain how the problems and concerns of towns and cities around the country affect the actions of their representatives and Senators in Washington, DC. Our political system was designed in this fashion.   

We’re currently witnessing the power of local politics as moderate Democrats in Congress hold back on supporting Obama’s healthcare bill because the people in their districts are voicing concern about the growing budget deficit, potential tax consequences or the implications of single payor coverage in general.   http://www.abcnews.go.com/m/screen?id=8125359.  

In many respects, the way the media has divided and analyzed state and district influence as red or blue, conservative or liberal, continues to hold true. 

Yet the Web offers new ways of looking at local politics and new opportunities for journalists.  An October, 2008 MediaPost blog article points out that as the world grows smaller with ever increasing forms of communication, locale becomes less relevant while personal takes center stage, http://blog.spotxchange.com/2008/10/22/mediapost-are-all-politics-local-how-about-all-politics-are-personal/   

The Web has redefined what community means.  People now come together over certain issues and passions whether or not they live next door or on different coasts.  This phenomenon makes traditional demographic targeting less effective than it once was.  A 45-year-old woman in Nebraska may share views about an International conflict with a 30-year-old man in Florida.  Running an expensive television ad in Nebraska misses all communities of people throughout the country that share the Florida man’s perspective.  The same MediaPost article argues that online video can carry the same emotion as television, yet do a better job of reaching like-minded people on the basis of issue rather than locale (not to mention at a fraction of the cost).  Those with a platform or cause - politicians, journalists and marketers alike - have been rethinking how to move the emotional needle in a way that pulls or magnetizes rather than pushes or targets.

 

However, there is a converse way of looking at the issue that actually strengthens the local community.   David Perlmutters’ book Blog Wars offers a Case Study on that demonstrates how Bill Callahan, a blogger in Cleveland, http://www.callahansclevelanddiary.com, scrutinized a city planning issue in a way that could bring new strength and force to a community.  Perlmutter also cites Colorado Confidential,now known as the Colorado Independent, http://coloradoindependent.com/ as an example of a megablog that focuses on state issues in partnership with local journalists. “...blogging at its best (is) detailed, well-researched, full of facts, (and) adds value beyond what exists within the discourse of regular media and political speech, and richly local as well as analytical,” says Perlmutter.

    

 Local newspapers and television stations decided long ago that their niche was local over national, yet they have done a poor job of inspiring interest and action with citizens or strengthening local community through the power of the Web and blogs.  They have concentrated too much on gathering data and producing fun, exhaustive entertainment listings instead of offering readers a new look at what’s happening in their community or local perspective on national issues. Perhaps it’s because light news is connected to scarce advertising dollars or perhaps local media aren’t giving their readers and viewers much credit as involved citizens.  It’s true that though Congressional reps often vote alongside the wishes of their states, the local voices who speak up are few while the masses are often in the dark about issues, like healthcare, that could obviously affect could them deeply. 

Yet there is space for bloggers like Bill Callahan to step up, take the time to conduct research and provide useful journalism that could make it to the local masses particularly if picked up by a reach-medium.  Callahan does not have a big budget but he does recognize that “nonherd” journalism has an important place in society.  With so much focus on how to fix the media, Callahan has concentrated on improving journalism and is going where others haven’t. 

It’s good to remember that journalists can seek and deeply explore issues that build community in a meaningful way - whether that community is a local neighborhood or a dispersed affinity group that has never met. 

Stories of old from York, Pennsylvania

For my son's 15th birthday, my Aunt sent family pictures and a letter that chronicled the Kauffman side of his family. As he dug through the envelope looking for money, I deeply enjoyed her account.

As we ponder the issues of modern life and wade through rough economic waters, it's helpful to reflect upon how others before us have gotten through trying times. Here's a few examples from my own stock:

-My great grandparents owned a bakery in York, Pennsylvania from I believe 1910 into the 1960s. To keep production up my great grandmother went without sleep, save an occasional hour, every Thursday night to bake 80 pies by hand. She'd roll out the dough, mix the filling and sell the pies the following day.

-My great, great grandmother Kate and her husband Pat purchased a huge Victorian home when they married around the turn of the century. Though its structure was impressive, the home did not have indoor plumbing - nor a root cellar. The lack of cool space to store food was more distressing to Kate than going to the bathroom in an outhouse. Her husband did not see the importance of a root cellar so Kate took matters into her own hands and dug one herself - shovel by shovel, month after month. She had her root cellar.

-My great grandfather, Earl Kauffman, hunted raccoon during the Great Depression so that he could sell their pelt. One night he went hunting alone and in the dark (not a good idea). He tripped, fell and broke his leg. So that he could make it back alive, he had no choice but to set his own leg - and he did. When he went to see the doctor the next day the doc proclaimed that Earl had done his work for him. Wow. Talk about surviving.

If you find these stories sweet or impressive, visit NPR's site for more personal accounts of how people made it through the depression. The stories are heartwarming: http://www.npr.org/templates/story/story.php?storyId=97468008

journalism journaling - new perspective

In one of my posts several weeks ago I was pondering community journalism and asked if there was a way to build-up communities without producing fluff or omitting part of the story. For example, one of our community web projects tells great stories of development, business openings and the whereabouts of young professionals, http://www.soapboxmedia.com/, yet completely excludes those who haven't contributed, in the eyes of the editors, to Cincinnati's "progress." And really, that's the mission of this site - to paint a picture of all of the action and investment that's transpiring in our city so that residents and outsiders alike have a new view of what Cincinnati is - a bustling city where things happen, not "twenty years behind the times," per Mark Twain.

This format was needed. Like many communities, we were growing tired of the "if it bleeds it leads" competition occurring as our local media watched their profits slide. We were ready for some good news. Note that nothing our daily newspaper has done to slow the decline in readership and revenue has worked. Just this past week, The Cincinnati Enquirer laid off another 101 people as they halted publication of their CinWeekly entertainment piece, http://www.citybeat.com/cincinnati/article-18361-enquirer-layoffs-hurt-us-all.html.

Things are in such a shamble.... but it's always dark just before the dawn. We have an opportunity to invent, to craft what what the next wave of journalism should look like. The blog phenomenon is amazing yet blogs tend to hone in on narrow topics, not serve a broader community with varied needs. What's next and what will work?

I met with someone today whose plan for new community journalism adds ingredients to an already complex stew. His first point is that we have to let go of the notion that good news means economic development and rapid change. Of course new events and new things to buy are exciting for Americans and will generally pull an audience. But what about stories that chronicle lesser-known people for the sake of looking at a bigger issue in a new way? Are journalists able to capture the human condition through one simple man in a way that causes us all to ponder the position of our own lives? How are everyday humans uniquely dealing with the issues that connect us all - like health care and raising children? Can we break outside of the right-wrong / free-market - government debate with stories of human history and human potential?

There's no doubt that this thinker has a viewpoint about what makes life and community meaningful and feels strongly about who is under-recognized and who is over-exposed. He's similar to the pro-development publisher in that he's crafting a new narrative that he deems to be important to our culture. Objectivity is not his promise. Yet his story is quite different that that of the development/business community. What is interesting is that he's proposing to tackle the biggest issues of our time by highlighting smaller examples and new insights into how to think about things. This approach would be challenging for writers - it will require a huge degree of curiosity, research into what's already been said and a constant willingness to present something new. The model could be electronic news-magazine. Documentaries and commentary with video and written narrative that spur wiki discussion.

More thought on this later.

In the meantime, I've learned about a blog that surveys the news business and worries of its extinction: http://newsosaur.blogspot.com