Entrepreneurial journalists make a mistake if they think advertising is their only potential revenue stream.
Our entrepreneurial journalism class at Georgetown University will focus tonight on exploring possible ways to make money beyond display advertising. I doubt that many organizations would want to pursue all these possibilities. Particularly if you’re a small organization or an individual, you will need to pick your shots carefully and decide which have the most potential and which are worth the time and money it would cost to try them. Some of these opportunities are tailored for the sole proprietor. Others work better for a larger organization or at least for an entrepreneur or team with specialized technical skills.
Here are some revenue streams we will discuss in class:
Events. At the entrepreneurial journalism panel at the Online News Association conference Saturday, Rafat Ali, who built paidContent into a successful business, said his four annual events are a significant part of the business model. A well-managed event will not only add to your profit, it helps build the brand, so it will boost traffic and can help advertising and other brands. Events aren’t a new revenue source for media. One of my former newspapers, the Des Moines Register, has been sponsoring RAGBRAI (the Register’s Annual Great Bicycle Ride Across Iowa) since 1973. It’s so big that registration is limited to 10,000 week-long riders, who pay $140 each (plus fees for day riders and vehicles, fees from bike shops and other businesses serving the ride, and merchandise sales).
Merchandise. Some entrepreneurs will find opportunities to sell merchandise such as t-shirts, caps or mugs (though you might want to use merchandise as marketing giveaways to build your brand). If you have some content that’s humorous or inspiring, or something that commemorates or celebrates a big local event, consider whether it presents a merchandising opportunity. Check out the “order t-shirt” invitations by each entry on textsfromlastnight.
Transactions. I discussed the possibilities for direct sales in my Blueprint for the Complete Community Connection. This is one of the best examples of moving beyond advertising. Two significant sources of newspaper classified advertising have been businesses and people selling homes and used items such as furniture and appliance. Belo Corp., publisher of the Dallas Morning News and other newspapers, moved beyond advertising by becoming an online real estate broker with Sawbuck Realty. The Ogden Standard-Examiner moved beyond second-hand advertising with its Quality Consignments warehouse outlet. Community news provides plenty of potential opportunities to conduct transactions relating to content: tickets to entertainment and sporting events, coupons or gift certificates to restaurants, flower orders with obituaries, gift registries with engagement announcements. You don’t necessarily have to be a big media organization to pursue the direct sales possibilities. WeKanShop is a local business directory offering direct sales, operated by the small-town Ottawa Herald in Kansas.
Daily deals. The business of selling daily discount deals for businesses is booming, with national players such as Groupon and Living Social. But local players are succeeding at daily deals, too (another of my former newspapers, the Omaha World-Herald, this year launched Daily Deal Omaha). This is a transaction-based business, where you don’t have to manage inventory or handle fulfillment.
Social media. Journalists are actively exploring the uses of social media for news and businesses are seeing the value of social media for business. Journalism entrepreneurs should test the potential for using social media as a revenue stream. For instance, could you place Facebook ads for a local business, as an upsell for placing an ad on your site? Could you manage a local “Twitter deals” account, charging local businesses for tweeting about their specials?
Training and consulting. My first foray into entrepreneurial journalism was as a freelance trainer. Traditional news organizations aren’t spending much for training now, but if you have some strong digital skills, in particular, you might supplement a day job or a startup business by leading workshops. I was able to build a high enough profile with my freelance training that I turned it into a full-time job with the American Press Institute in 2005, though that would be more difficult now. I know several journalists who have made training their full-time pursuit, though now I think most of them mix training with some other income sources. Similarly, if you have valuable skills and knowledge and you market them effectively, consulting can be a full-time business, a sidelight or one of multiple revenue streams.
Selling content. Making a living as a freelance content producer is difficult and challenging, though I know people who do it. Freelance work can also be a supplemental income for an entrepreneur trying to build a business from multiple revenue sources. An entrepreneur who is creating content for a primary business should explore opportunities to syndicate content to other media.
Providing a service for other media. If you develop a valuable tool for consumers, consider whether you might have a secondary (or even primary) business selling that tool to other media. Businesses such as Serra Media and PaperG serve online publishers.
Content production as a service. As I wrote recently in discussing a possible new business model for obituaries, news organizations or individual journalists could build a business that would include professional-quality life stories, ranging from obituaries to books.
While display advertising is an important revenue stream for journalism entrepreneurs, you can find opportunities (and increased value) in helping businesses reach exactly the customers they want.
Lead generation. If you collect information about users’ interests — for instance, when they search listings or register for special offers — you have an opportunity to ask whether they would like more offers or opportunities of that type. You can then help businesses connect with exactly the businesses you are seeking.
Targeted advertising. A niche product or a product with sections of specialized content may attract exactly the audience that some businesses want to reach. The graduation section of my C3 blueprint has examples of both targeted advertising and lead generation.
Mobile applications. As I discussed in one of my mobile-first strategy posts, if you develop your own mobile app for your product, you have a skill that can serve businesses in your community interested in mobile apps (or, for that matter, other media in your community). And, if you develop an app people will pay for, that’s a potential revenue stream.
Location-base ads. Entrepreneurs who figure out how to deliver welcome, useful location-based advertising (especially coupons) will shape the future of media.
Listings. What sorts of classified ads might people in your niche be interested in? If you assemble an audience around a particular topic, you might be able to charge for listings such as events or jobs. (But consider whether there is greater value in free listings that might draw more audience.)
I have blogged extensively about my view that paywalls are a foolish approach for news organizations online. But the entrepreneur still might find ways to provide valuable content people are willing to pay for:
Visual content. If you operate a site with strong photo or video content, consider whether that presents an opportunity to sell prints or DVD’s.
Premium niche content. If you can provide content that is important and valuable to a particular niche, you might be able to charge enough to support the business. Politico, now a free political website, is planing to launch Politico Pro, a subscription news service covering energy, transportation and health care. The minimum subscription price will be $1,495 a year.
Special print editions. Even if your product is digital, you might be able to publish and sell a print edition keyed to a special event.
Books. An entrepreneur faces a variety of book publishing options. If you are a consultant or trainer, you can share your expertise in a self-published book. Work Cabin entrepreneur Gregg McLachlan, for instance, just published a guide for journalists working in small markets: Big stories, Small towns. The book may be as much a promotional tool as a revenue source, but self-publishing has become quite reasonably priced. If your venture covers community or sports news, a big event might provide an opportunity to publish a book. Following the floods of 2008, another of my former newspapers, Gazette Communications, published Epic Surge. That was a more costly book to publish, but yielded significant revenue, even after a hefty donation to flood relief.
Memberships. Steve Outing makes a good case for membership as a possible business model for a news organization. I think in many cases, this would be the model for an established business seeking a new revenue stream, rather than for a startup, but I could be overlooking a possibility. Steve sees model with general news available at no cost, but some premium content for paying members, along with other benefits, such as advertiser discounts and free or preferred seating at special events.
OK, I’m kidding about sports teams. Those are a venture for an established business with lots of money. But the entrepreneurial journalist might learn something from the strong synergy between media and sports teams (Yankees and YES Network, Knicks and Cablevision, Tribune and the Cubs until this year, Redskins owner Daniel Snyder owning radio stations). Other businesses might benefit from some enterprise in journalism. The news venture could be the primary business or the secondary one. For instance, the TBD Community Network includes some blogs by real estate agents, LoCo Musings, LoCo Market Stats, and Arlington Real Estate News.
Nonprofits are entrepreneurs, too
A significant part of journalism entrepreneurship these days is taking place in the nonprofit realm. In the class, we are focusing on launching a profitable enterprise. Nonprofits can use many of the revenue sources described above, as well as grants and donations. In some instances, a for-profit entrepreneur can get grants or donations, but we won’t cover them here. We also will focus primarily on operating revenue, rather than such sources as venture capital, selling stock or borrowing money.
Protect your integrity
Many of the situations a journalism entrepreneur will face present ethical challenges. The sole proprietor or a small operation will not have the hard church-state separation between editorial and business concerns that a larger news organization has between news and advertising. But integrity is essential for the small enterprise, too. As you consider each revenue opportunity, consider also how it might affect your integrity. Consider where you need to set boundaries. Be transparent with users and with business customers about what each kind of customer can expect from you and what they can’t.
I’m sure I haven’t covered all the possibilities. What are some other potential revenue streams for entrepreneurial journalists?