Startling starT-ups in the business of journalism

STARTLINGSTART-UPS

IN THE BUSINESS OF JOURNALISM

Association for Education in Journalism and Mass Communications,Chicago, Aug. 11, 2012

Sponsors: Community Journalism Interest Group ( C o m J I G )and Media Management and Economics Division

Panel:Heidi Kulicke, Orange County Business Journal

Rich Gordon, Director of Digital Innovation, NorthwesternAmy Starlight Lawrence, project specialist, John S. and James L. Knight FoundationAl Cross, director, Institute for Rural Journalism and Community Issues, Kentucky

Chicago News StartupsAEJMC Chicago – August 2012

Rich Gordon@richgor

2010 study: 206 “micro-publishers”in the Chicago area

• 36 focusing on towns or neighborhoods (plus 15 other “hyperlocal” sites from organizations)

• 170 focusing on niche audiences or topics• http://bit.ly/ChiLinks

Some of the sites in the “new news ecosystem”

Example: Gapers Block• “Chicago-centric news

and events webzine,” heavy on outbound links

• Started in 2003 by Andrew Huff, Ohio State journalism graduate

• Large stable of volunteer writers/editors

• Some success with ad sales

Example: Brown Line Media

• Three hyperlocal sites focusing on northside Chicago neighborhoods

• Founded by Mike Fourcher, an MBA with background in political campaigns

• Pays editors (part-time) and writers on per-piece basis

• Some success with ad sales

Example: Chicago Art Magazine

• Founded in 2009 by Kathryn Born, an artist and writer

• Shut down in April 2012 after she encountered medical problems

• Relied on volunteer writing staff

Example: Live Here Oak Park

• Founded in 2009 by Becca Martin, a marketing communications professional (and Oak Park resident)

• Relies mostly on user-generated posts & forums

• Helped Martin get job as community manager for EveryBlock.com

Example: EvanstonNow

• Founded in 2007 by Bill Smith, a retired journalist and journalism educator who grew up in Evanston

• Relies heavily on Smith’s reporting and writing

Example: Progress Illinois• Founded in 2008 with

financial support from the state council of the Service Employees International Union

• Goal: “adding a progressive voice to the Illinois political media sphere”

• Accepts advertising

Other micropublishers• Theexpiredmeter.com: parking & parking tickets• Chicagofoodies.com: Food & restaurants• Beachwoodreporter.com: Chicago government and

politics• Sportsblogs such as Bleedcubbieblue.com,

Bearsbackers.com, Southsidesox.com, • Chicagonista.com: Eating, shopping, entertainment

from moms’ perspective• ForgottenChicago.com: Chicago history• Badatsports.com: Arts scene in Chicago

Chicago Independent Ad Network

• Launched in September 2011 with seed funding from the Chicago Community Trust

• Launched with 15 participating sites• Led by Mike Fourcher of Brown Line Media• Closed in April 2012• Why it failed:

– Long sales cycle– 1 million impressions a month wasn’t enough– $12 CPM too high

Number of siteslinked to 0 47Number of siteslinked from 28 25Number of linksto other sites 0 470Number of linksfrom other sites 1,029 944

Links: New mediavs. traditional media

Number of siteslinked to 0 8Number of siteslinked from 28 14Number of linksto other sites 0 63Number of linksfrom other sites 1,029 177

The Tribune also runs ChicagoNow,a “blog network”

When we set a link threshold,we see site clusters

Music

Sports

NewCityChicago

Micropublisher core

Tribune Co.

♦

Some sites bridge otherwise disconnected regions

NewCityChicago

Periphery

Niche publishers central cluster

Periphery

INDEPENDENT, ONLINE LOCAL NEWS COMES TO A

RURAL STATE

• 22 daily newspapers, only three with circulation above 25,000 (Louisville, Lexington, Cincinnati’s Ky. edition)

• 125 paid-circulation weeklies, most the sole paper in a county; many counties are too small to support a robust news operation

• Ky. is No. 1 generator of Topix traffic, suggesting a news vacuum being filled

• 2 television markets entirely within state: Lexington-Hazard (5 stations), Bowling Green (1 that does news)

• 8 other TV markets (including only one with a Kentucky station, Paducah)

KENTUCKY’S TRADITIONAL NEWS-MEDIALANDSCAPE

NEWSPAPERS:Highly fractured among 120 counties, mostly small; almost fit any definition of community papers

TELEVISION:10 markets, with almost half the counties in a market dominated by stations in other states

• Identified 28 online news sites in Kentucky not affiliated with a newspaper (with one exception*)

• 18 sites defined as active, posting stories more than 3 days per week (most posted daily)

• 8 are part of a chain in Western Ky.: SurfKY.com (*one has the local weekly newspaper as its partner)

• One very active site from a radio station

RESEARCH PROJECT

SPRING 2012

• The 18 active sites published an average of 10 stories per day, 2.5 reported and written by staff

CONTENT ANALYSIS

• The 18 active sites published an average of 10 stories per day, 2.5 reported and written by staff

• About half of content was from press releases, half of those governmental

CONTENT ANALYSIS

• The 18 active sites published an average of 10 stories per day, 2.5 reported and written by staff

• About half of content was from press releases, half of those governmental

• About 17 percent of local content was submitted by local people and businesses

CONTENT ANALYSIS

• The 18 active sites published an average of 10 stories per day, 2.5 reported and written by staff

• About half of content was from press releases, half of those governmental

• About 17 percent of local content was submitted by local people and businesses

• Little aggregation from other sources, reflecting local focus

CONTENT ANALYSIS

• The 18 active sites published an average of 10 stories per day, 2.5 reported and written by staff

• About half of content was from press releases, half of those governmental

• About 17 percent of local content was submitted by local people and businesses

• Little aggregation from other sources, reflecting local focus

• However, local government reporting was spotty

CONTENT ANALYSIS

• The 18 active sites published an average of 10 stories per day, 2.5 reported and written by staff

• About half of content was from press releases, half of those governmental

• About 17 percent of local content was submitted by local people and businesses

• Little aggregation from other sources, reflecting local focus

• However, local government reporting was spotty

• Publishers consider obituaries very important, especially in markets where the newspaper is a weekly

CONTENT ANALYSIS

ANALYSIS OF POSTING PATTERNS

Chain-operated sites tended to have more daily posts than independents

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Posts

Daily Posts PostsAVG.

ANALYSIS OF POSTING PATTERNS

No distinction between independents and chain in amount of local reporting

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Local ReportingLocal Reporting

Total Posts

Avg. Posts

• Wide range of approaches, from simple blogs not intended to make money to relatively sophisticated, multi-location businesses with a profit objective

APPROACHES AND MOTIVES

• Wide range of approaches, from simple blogs not intended to make money to relatively sophisticated, multi-location businesses with a profit objective

• Publishers seem driven mainly by desire to provide public service

APPROACHES AND MOTIVES

• Wide range of approaches, from simple blogs not intended to make money to relatively sophisticated, multi-location businesses with a profit objective

• Publishers seem driven mainly by desire to provide public service

• Some wanted a local alternative to Topix

APPROACHES AND MOTIVES

• Wide range of approaches, from simple blogs not intended to make money to relatively sophisticated, multi-location businesses with a profit objective

• Publishers seem driven mainly by desire to provide public service

• Some wanted a local alternative to Topix

• Some are driven by desire to offer a political perspective different from the local newspaper

APPROACHES AND MOTIVES

• Wide range of approaches, from simple blogs not intended to make money to relatively sophisticated, multi-location businesses with a profit objective

• Publishers seem driven mainly by desire to provide public service

• Some wanted a local alternative to Topix

• Some are driven by desire to offer a political perspective different from the local newspaper

• Most had journalism experience, in print or broadcast

APPROACHES AND MOTIVES

A HOMEGROWN ‘PATCH’?Company with eight sites in Western Kentucky

A HOMEGROWN ‘PATCH’? Founder says every story has a visual element because “people are visually driven.”

Company with eight sites in Western Kentucky

A HOMEGROWN ‘PATCH’?

Founder Ron Sanders says he is able to give advertisers something they have never had before: Reliable data on the reach of their advertising. “We can tell them what kind of response they’re getting –– and track it, too.”

LOOKING AHEADObservations by student researcher Richard Yarmy

Online news sites have the potential to become Community Newspapers 2.0

The main ingredients are: A dedicated local journalist, a logical business plan, a modest amount of seed money, sustaining resources and a coveted brand image. With several online news sites already successful in the state, it follows that their best practices could be combined with other good business principles to provide a road map –– call it Community Online News Startups for Dummies, if you will.

LOOKING AHEADObservations by student researcher Richard Yarmy

Online news sites have the potential to become Community Newspapers 2.0

The main ingredients are: A dedicated local journalist, a logical business plan, a modest amount of seed money, sustaining resources and a coveted brand image. With several online news sites already successful in the state, it follows that their best practices could be combined with other good business principles to provide a road map –– call it Community Online News Startups for Dummies, if you will.

LOOKING AHEADObservations by student researcher Richard Yarmy

Proven concepts and successful practices could be supplied to interested entrepreneurs Start with a simple business plan: What will it take to operate in the first year? Estimate equipment, working space, salaries for a minimum of three stakeholders, everything you can forecast regarding expenses, both fixed and variable. Then project revenue: Take an intelligent guess on how many ads you can sell and inventory news sites of similarly populated counties, to gauge their penetration.

LOOKING AHEADObservations by student researcher Richard Yarmy

Understand the three legs of the online news business model: Journalism, Technical, and Business Operations (few people have sufficient expertise to do all three, or perhaps even two)