New business models for news

No doubt to the frustration of my fellow organizers, I’m still thinking through the format and agenda for the New Business Models for News conference we’re holding at CUNY in May and want your advice.

I was influenced watching the Google team at Davos and by a session on innovation there: I saw that engineers don’t start with neat ideas. They start with problems and then seek solutions.

Too much of the discussion about the future of news has been focused on the blind hope for some neat solution: an iPod moment or a white knight or even, god help us, government support. And too much of the parallel discussion about media on the internet is about neat things.

Instead, I think we need to identify the problems and then have a rational search for solutions. So I’ve been focusing my thinking on expressing our problems — or call them our challenges and opportunities — as the agenda for the meeting. My thoughts:

* Efficiency: See the results of my back-of-the-envelope survey asking what should be cut from newspaper budgets. There is no shortage of suggestions. I think we need to have a hard-nosed discussion about the efficiencies that can be found in news. The negative way to say that is that we’re getting rid of commodified fat. The positive way to say that is that we must boil down what we do to its essence, its greatest value. And the internet gives us opportunities to be newly efficient — it is journalism’s internet dividend. So what can and should we do without? What do we absolutely need? How can we use technology to find efficiencies? What is the proper organization of a news company (see Dave Morgan’s proposal to split up newspapers)? What does efficient journalism look like?

* Networked content: It is a precept of mine, at least, that one way to expand journalism’s reach even as revenue and organizations shrink is to work collaboratively outside our organizations. That was the subject of our last conference on networked journalism. So let’s come up with real solutions using collaboration. Where could it help? With what kind of stories? What kinds of beats? What tools do we need? Training? What’s the business relationship?

* Networked advertising: I also believe that the key to making the networked architecture work is advertising to support and motivate new creators and to have control over their quality. We are beginning to see examples of this: blog ad networks from the Washington Post, the Guardian, Reuters, and Forbes; Reuters selling the Guardian’s international advertising (just announced); Glam.

* Innovation: We’re going to get nowhere if we don’t start inventing new products, networks, means of work, means of distribution, technologies, and business models for news. This is just not happening in the industry now, especially in the U.S. So how do we jumpstart it? I’ve been working on starting an incubator. At Davos, some innovators suggested to me that we should start an X prize contest to solve some of our problems, (e.g., an open-source ad network; geotagged news….). Do we need to start an investment fund across media companies? What should universities do?

* New revenue: There may not be any. It may all be advertising. And too often in this discussion, all hope is thrown into this bucket: There’ll be some new ad product or there’ll be some foundation that out of the goodness of its heart decides to feed a newsroom. Ask any foundation whether that’s likely. It’s not. But public support of journalism is one model: see NPR, Pro Publica, and the Center for Public Integrity. There may be new models for supporting high-quality journalism. (One idea I’ll write about soon is what I call reverse syndication: What if the LA Times pointed its traffic about Baghdad to the NY Times’ reporting and rather than the NYT charging the LAT, it pays for LAT for the traffic, which it monetizes to help support the bureau?) I’ve long thought that subscription models won’t work. Prove me wrong. Come up with other new models we should be testing.

How does that sound as the basis for discussion — and more than discussion: real plans?

  • The item on efficiency is closest to your stated goal. Many of the most successful developments have been about reducing steps and making things easier, then easier still. When I think about how easy it is to move information through RSS feeds, widgets and Twitter, among other things, then I think about how many hands have to touch the lottery numbers to get them on a newspaper page, I know there things to learn there. Some of the other items, like networked content, are backwards to your goal. They start with neat ideas and go looking for something to use them on. At the most basic level, there are two problems: How do businesses and customers find each other, and how do people get reliable information?

  • I was inspired by the NetJ conference, but I still believe that each organization has only a small percentage of innovative individuals and that some concepts are still not understood by some key decision makers.

    Like ‘sending traffic away from the site’, or ‘the users are on the same level playing field now.’

    Most newsrooms have never heard of Twitter, nevermind thinking of building something like which I slapped together in a few days.

    It’s interesting that you included ‘online’ in things to cut from a newspaper budget.

    I’m a newspaper-web pro and I AGREE! Not to cut out online strategy, but get rid of these bloated portal-like news sites and give every reporter a blog. Free upgrades if you use WordPress. ; )

    The techie folks can then concentrate on real innovation and creating new relationships.

    Come to think of it. We should aggregate all the open source tools we can muster up and share them in an easy to find place for news organizations. I’ve got a growing catalogue I’m willing to contribute.

    And news organizations need to start working together, like bloggers do, insteead of viewing each other as competition. That’s an idea for a world of scarcity. We are now ina world of abundance, and those rules no longer apply.

  • David Olmos

    I saw the reference to a May conference about new business models for news but can find no information about it on the CUNY J-school website. Is there any basic information available yet?

    I am a journalist working on a plan for a philanthropy-supported health journalism project in California, and a former LA Times editor and reporter.

    David Olmos

  • Hmm. Not sure what you’re identifying as the problems are really the problems, but rather the symptoms.

    The problems are:

    1) Providing a product that people want to read or look at be it an article, a video, a photo or a site that always has the best links on a given subject matter. In order to do this, you have to get your staff working differently or, euphemistically, more efficiently.

    2) Paying for it — assuming that you discover people want it. You need real competition in online advertising. Google is great at offering cheap ads to everyone but far from perfect and not at all transparent with clients. There are lots of opportunities there for innovative advertising.

    P.S. I realize you might dismiss this as being too content-oriented and not relationship-oriented enough, but I think people use their web relationships primarily to discover content. The relationships are more integral to the business/advertising models that need to develop. Those are going to be radically different from the current ones whereas good content is still good content delivered in different ways.

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  • “I was influenced watching the Google team at Davos and by a session on innovation there: I saw that engineers don’t start with neat ideas. They start with problems and then seek solutions.”

    That’s a great way to build a conference of interest. Or an unconference. : )

  • you nailed it. these are problems and new solutions will fill the gaps.

    i’ve been tackling this problems since starting podtech three years ago.. now i’m working on networked content and networked advertising – microcontent for micronetworks..

    you’re right an algorithm will come from this…possibly the next pagerank like algorithm

  • vivien morgan

    I believe you’re right to be concerned about what are universities going to do about churning out thousands of journalism and media graduates who haven’t learned about ‘convergent journalism’, who have been taught conventiuonally separating writing for print,broadcast and online.
    Wake up!!! I teach and have written ‘Practising Videojournalism'(Routledge 07) that addresses some of these challenges and that argues for multi-skilled journalists- without them- how do you begin your revolution?

  • Jeff,
    check out this company (i bumped into the CEO at Davos, and he said he had met you). They have a really cool set of app’s that help companies drive innovation, but on a networked and crowdsourcing basis. This could be the corporate back-end to the new consumer power that companies are faced with.

  • Your Neighbor

    Problem: Newspapers are trying to be all things to all people.
    Problem: newspaper websites are doing the same thing.

    The horribly junky and unreadable is a perfect case. Screaming type, screen crammed full of tiny words about sports, biz, news, schools, traffic, blogs, restaurants, contests, plus ads. WTF?

    I want to go to this site once, select out the sections I will NEVER read (contests, blogs, traffic, biz) and then never see these things again when I go there. The best thing I like my paper is that I can pull out the two sections I want and toss the rest.

    Also, I don’t want cheesy video from barely capable reporters, unless it is absolutely stunning. So skip the lame, youtube quality video reports from a local traffic accident or something.

    There is an exception to the cheesy video rule, though. I AM interested if it is hyperlocal. My street, my school, my corner bodega, my neighbor’s house. Then I want to see every detail.

    I might be interested in reporters blogs. If they say something. Most are horrible. Actually, the blogs at Politico are pretty good, as an example. Actually, Politico is a pretty good news site, if you care about Politics. Why can’t something from an NJ paper look like that?

  • This is a challenge the whole industry faces.

    1. Subscription will not work
    2. The current situation seems unsustainable especially if CPM’s drop

    So new models need to be conjured up from somewhere. Where exactly? Everyone wants to know that…

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  • Jim

    When I worked in radio, the big stations spent a fortune on audience research and their answers would always come back the same.
    “More music less talk,” would always win by huge margins. Time and Temperature were distant seconds. You can even hear, to this day, that exact phrase used to advertise certain stations. And all this expensive research couldn’t have been more wrong.
    At the time the audience claimed they wanted “more music, less talk” the top five morning shows in New York were:

    Howard Stern
    WCBS all news
    WINS all news
    Don Imus
    WABC all hate

    Most of the people who said “Time” was very important to them used a clock radio alarm to wake up. If they’ve got a clock, why is time very important to them? Because it was a question on the survey.

    In short I’m saying the newspaper audience won’t know what they want until you give it to them, not the other way around.

  • Jeff,

    It’s good to see you more open-minded in this post than you usually are concerning the potential for revenue models other than advertising to fund news/content. “I’ve long thought that subscription models won’t work. Prove me wrong.” is much better than some of your past pronouncements stating that content already is free and that, effectively, the horse is already out of the barn.

    “Prove me wrong.” So then, what would you count as proof? How about the many content websites that have been successful pursuing the paid subscription model? At SubHub we have a list of more than 200 such sites. I am happy to send you the list.

    Many of these are niche sites that were not started by major news publishers. But nevertheless many were started by journalists outside the traditional media framework. Some were started by individuals with no prior journalism background. They are doing exactly what you advocate, Jeff. Citizen journalism. And making money at it.

    There is no reason why a major newspaper cannot start a microsite targeted at a well-defined niche, and featuring content valuable enough to pay for. The reason some of the big newspaper sites have not succeeded at the subscription game is that the content they’ve offered is too generalized and commoditized on the web. It was not unique, actionable and valuable enough. But these individual failures of execution do not disprove the model — as the many other success stories demonstrate.

    Your seemingly strident past rejection of the subscription model, based on the anecdotal evidence of a few aborted projects (and some successes unfairly categorized as failures, such as and its $50 million in annual subscription revenues), has long been dismaying. It is good to see you now allowing for the possibility that you could be proven wrong. Shall I email you that list?

    Best wishes,
    Evan Rudowski

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  • I am very concerned about the coming day when the vast majority of media outlets are owned by big corporations, and are further restrained by having the only source of income from advertising paid for by big corporations. Not exactly the climate for fair and balanced reporting.

    There might be a way to do some funding through subscriptions, but only if one subscription covers content from many sources, as does a cable TV subscription or a monthly subscription to a music website. Because so much is free right now, those participating would have to be clever about how they rewarded those who subscribe vs. those who don’t, but isn’t it worth considering?

    I get booed and hissed at every time I mention this, but we won’t know whether it might be viable unless we give it serious thought and maybe even some kind of trial run.

    Carolyn Kay

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  • On the question of new revenue:

    There’s lots of marketing money in local markets that is not going to newspapers. Asking whether it’s advertising or some other form of service is less important, I think, than getting newspapers to discover the numbers of small businesses that today simply aren’t on the account list, and then discover what those businesses need to succeed.

    In most cases there’s not even a conversation with potential and non-customers.

    When presented with a new product idea — say, for instance, search engine optimized profiles (as sales consultant Mike Blinder is advocating) — the ad force tends to peddle the product to the same comfortable set of clients.

    That’s not going to solve the underlying economic problem, which I think is as much about the narrowing ad customer base of daily newspapers as it is about the broadening choices available to readers.

  • I fear the day when news media are not only owned by big corporations, but are also funded only by advertising paid for by other big corporations. Who will rock the boat then?

    There may be a chance for a subscription model for part of the funding, but it would have to be a subscription for many outlets, similar to cable television and monthly fees for downloading music and/or movies. People don’t want to have to have individual subscriptions for 20 to 30 different outlets.

    Some creative thinking would be needed to figure out what should be the premium content that people would want to pay for, since so much is already available for free, but right now little thought if any is going into this.

    Carolyn Kay

  • NYT-Gannett-Trib-Hearst Combine Form Local Online Ad Sales Company quadrantONE (Paid Content):

    “This has been in works for a while as an alternative to the Yahoo newspaper consortium, as well as the Google-newspapers ad effort, and now it is finally launching: Tribune, Gannett, Hearst and the New York Times Company are forming a joint new company called quadrantONE, and transferring some of their open online inventory to the firm to sell… The four companies are also investing in the new company.”

    It seems to me that smaller newspapers ought to be looking for a strategic partnership with Google, which has said over and over again that it doesn’t want to be a content provider. Today’s local newspapers could work with Google to develop a platform for hyper-local content and ads where they share the revenue.

    Carolyn Kay

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  • I do have a solution to bring and its called Silverwyn. I would be prepared to share it if liked minded persons would join me in classic mastermind group.

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  • A couple of ideas more:

    OC Register publisher reveals his three-pronged strategy
    It involves publishing free community newspapers, expanding Web offerings and putting out a smaller Register print paper. “The Register has to become a 21st century business,” Terry Horne says in his first interview since being named Orange County Register publisher last September. “We can’t have the same model that worked 10 years ago.”

    How to free journalism from an advertising dependency
    “Modern computing offers unparalleled capacities to track and calculate,” writes Edward Wasserman. “Imagine a vast menu of news and commentary offered to you ad-free for pennies per item, the charges micro-billed, added up and presented like a utility bill at month’s end. The money that journalism providers got would depend on their audience. Plus, if you uploaded comment or video in response, to the degree it was downloaded by others you’d get credited for it — compensated like any other provider.”

    Carolyn Kay

  • Michael GS

    An interesting conversation.
    I”d like to be able to check out the company David Brain mentions.
    Any way to find it’s nome out?

  • Michael GS

    “its name” not “it’s name”

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