Why I’m (a little more) optimistic about newsroom revenue
It’s not about one huge river of advertising. It’s about many small streams, from many sources, which are replicable.
By Matt Carroll <@mattatmit>
When Mount St. Helens erupted in 1980, the area around the Washington state volcano looked like the moon — endless acres of gray ash. Nothing alive, nothing growing. But signs of life came back quickly — greenery soon poked its way through the barren landscape. Small animals and birds returned to forage.
It was not the same landscape it was before the eruption. But today it’s alive and healthy.
Hey newsrooms, see where I’m going here?
Yes, the news business has been devastated by the internet. Nothing will return us to the days of seven-pound Sunday papers, fat with inserts and classifieds, dropped on front stoops by groaning newsboys and newsgirls. The ad revenue river is disappearing, like an ice cube squeezed between two hands. Digital ads don’t weigh that much and definitely don’t bring in nearly as much cash. The revenue collapse is reflected in the number of working reporters today, which has been cut almost in half since 1990.
It’s a miserable picture. But amidst the wreckage, there are signs of economic life, which can be copied and improved by other newsrooms. News organizations can find new streams of revenue, if they are willing to innovate, and it’s nice to see so many that have.
I caught a glimpse of what’s to come at ONA16 in Denver, the Online News Association’s annual conference, which ended a week ago. One session featured “The Revenue Roundup: 6 Ideas to Monetize Your Newsroom.”
The 2016 ONA Conference & Awards Banquet, Sept. 15-17ona16.journalists.org
The ideas ranged from making money off of obits to selling data. Nice ideas that add to the bottom line. Maybe a few percent of revenue gets created. Not huge amounts, but evidence that people are thinking and trying, and the overflow audience listened closely.
At the end, one woman asked the obvious question: OK, but where’s the big money idea?
Which was appropriate, because the big money idea is not going happen. It died with print-only news. From here on in, newsrooms need to generate revenue from many medium to small sources — events, paywalls, native advertising, micro payments, data…. Whatever it takes.
What struck me at the ONA session was this: The revenue ideas the speakers talked about are replicable by many, if not most, news organizations. It just takes the will to follow in their footsteps, and in the footsteps of others who are exploring different ways to generate revenue. Granted, that is a big wish. Too many newsrooms are still hoping the gusher of digital advertising will turn back in their direction. But that revenue has been mostly diverted to Facebook and Google, who gobbled up nearly two-thirds of digital advertising in 2015, according to one estimate, letting everyone else battle over their crumbs.
It’s time to look past advertising, at what’s working, and copy it. Advertising has its place, but it’s not the be all, end all. Plenty of newsrooms are experimenting. Let’s learn best practices from them, and iterate. There is revenue out there, and it can support decent-sized newsrooms. Maybe not a 1990s-era newsroom, but enough for a newsroom to do a good job covering their community.
For instance, the Boston Globe, my old stomping grounds, has roughly 70,000 digital subscribers. The official price is $3.99 a week, but let’s figure with discounts the paid average is closer to $3 a week. Based on that price, my back of the envelope calculation puts annual revenue from digital subs somewhere north of $10 million.
Could you, as an editor, put together a decent news staff with a $10 million budget? Sounds doable to me.
On the other hand, what’s infuriating is how few other news organizations have been able to take advantage of paywalls. The New York Time and the Wall Street Journal lead everyone with digital subscribers. The Times has more than a million, and the WSJ is not that far behind.
In third place? The Globe, with its 70,000 or so subscribers. Good for the Globe, but where’s everyone else? Where are the newsrooms with 200,000 and 500,000 subscribers? Are these three newsrooms alone at the top? Seems incredible to me that others can’t do better than the Globe.)
Other newsrooms are tapping into other sources. The nonprofit Texas Tribune has increased revenue from $4.1 million to $6.5 million between 2011 and 2015, partly through its pioneering use of major events, such as the Texas Tribune Festival.
So money is there. It’s just in different places. It requires new ways of thinking, new skill sets. An ad guy can’t necessarily plan an event. Or help create a paywall. But people are learning new skills and figuring out the revenue puzzle, dollar by dollar. We can innovate our way out of this mess. Let’s learn from the organizations that are doing the best jobs of creating new streams of revenue and build from there.
Matt Carroll runs the Future of News initiative at the MIT Media Lab and was a former database reporter for the Boston Globe, where he worked for 26 years. He also writes the “3 to read newsletter : Cool stuff about journalism, once a week.”