Business Ecosystems


As specialists, beats are efficient. But they are hardly sufficient to meet the complete needs of the larger community. Other, larger entities are required to complement and bring quality and scale to coverage, distribution, and advertising. These additional entities can become efficient and sustainable because together, all these enterprises, large and small, can benefit one another — if they learn to collaborate. These entities can include new news organizations, reformed legacy institutions, not-for-profit investigative organizations, public media, specialists of various sorts, networks, and enterprises I’ve not yet seen or imagined. Together, they make up the new news ecosystem.

In our economic modeling of this news ecosystem at CUNY, we still envisioned what we called a new news organization, also known as the “norg,” a reorganized metropolitan newspaper or a successor to it. The norg would find a business of scale in continuing to provide coverage of city, metro, or regional issues and news. It would be supported mostly by regional advertisers still looking to reach a large audience, in addition to new revenue streams, such as events. It could share its audience with other members of the ecosystem by curating and linking to them. Thus it would also become more efficient: probably made up of a score or two of beat reporters and editors plus technologists, where the newsroom of old was filled with hundreds of people fulfilling many job descriptions now fading from view.

In our modeling, we gave the norg another task and opportunity: network advertising sales across the ecosystem. It would aggregate the audience of the other, smaller sites and services and take that added reach to marketers that still want audiences at a metropolitan or regional scale — or national advertisers that want the opportunity to target their messages locally. This is one way that the smaller beat businesses supplement their primary revenue from the ads they sell. And it is one way that the norg supplements its own advertising revenue associated with its own content and audience, thus supporting more journalism. We’ve yet to see such a network emerge, but I believe it is a clear opportunity and a critical step in the development of a healthy and sustainable local news ecosystem.

Ecosystems are already supporting nonprofit, investigative news operations: ProPublica nationally; the Center for Investigative Reporting across multiple markets; The Texas Tribune and NJ Spotlight in their states; and so on. They are important contributors to the news and reporting available to the public. These operations often subsidize larger news organizations by contributing their articles to newspapers and in some cases broadcasters. Thus the investigative units get distribution and exposure — and greater impact — as well as the imprimatur of the larger organization’s authority. And the larger news organization gets what amounts to free labor and free content. What’s not to love?

Public media organizations — public radio and TV in the U.S. and public-service broadcasters elsewhere in the world — would do well to follow the example of these startups and collaborate as much as possible with others in their ecosystems, making finished content available to others; making raw content available for others to mine and remix; promoting and thus supporting the best work of others; and providing technology and platforms for others’ use. We are seeing examples of such efforts: WNYC in New York has been working with members of the New Jersey ecosystem on reporting projects and with members of the public on information gathering (about everything from hatching cicadas in the ground to sleep patterns of users). WNYC and the not-for-profit NJ Spotlight jointly hired a reporter to investigate post-Hurricane-Sandy recovery. WHYY and WFMU, two listener-supported radio stations, have volunteered to help us in New Jersey test membership campaigns with other sites. Public-service broadcasters in Germany are sharing content with legacy newspapers.

Whether for-profit or not-for-profit, we are also seeing the rise of what are being called single-subject news sites: something bigger than a breadbox or blog but smaller than a general-interest newsroom. Syria Deeply has gained considerable admiration for its focused, quality coverage of Syria, leading to the creation of News Deeply to make its platform available to others. Inside Climate News won a 2013 Pulitzer for national reporting. One of my favorite single-subject news sites is Chalkbeat, which covers schools — mostly in disadvantaged neighborhoods — in an odd hodgepodge of markets including New York City, Colorado, Tennessee, and Indianapolis. Its cofounder, CEO, and editor-in-chief, Elizabeth Green, has been generous in her candor with our entrepreneurial students, telling them of the pressures and conditions than can come attached to philanthropic funding. So she has worked hard to balance her funding with advertising — including for education jobs — and, to a lesser extent, events. Under her leadership and with the work of one of our graduates, Anika Anand, Chalkbeat has also been an innovator in developing new metrics of impact; more on that later. Chalkbeat raised the competitive juices of The New York Times, which started its own version, Schoolbook, which it later gave up for adoption to WNYC. Cutbacks at the New York papers reduced education coverage, but with the start of both services, that beat may now be better served than before.

Business-to-business services also play a role in larger news ecosystems. Sites like TechCrunch and Re/code for the startup world are meant to serve readers in their industries. But they also add coverage to the larger pool of news and information and offer depth that no general-interest or even financial newspaper could provide. They give those legacy institutions somewhere to discover stories and, optimally, link to for news that would be of interest to their larger audiences. The business models are different: B-to-B sites will have smaller, more specialized audiences, which enables them to attract more focused but higher value advertising. They also run lucrative conferences, gaining revenue at the door and from sponsors. They can sell content in in-depth reports or newsletters. They sometimes offer job services and even consulting. And some of them syndicate selected content to mainstream news organizations in return for revenue or branding and promotion. It’s a nice business. The more of them that exist, the more coverage of developments in business, the richer the ecosystem.

Curators and aggregators — from Google News to Huffington Post to Business Insider — also play what I say is an important role in the ecosystem. Rupert Murdoch and his loyal lieutenants have disagreed, arguing that they steal content and thus audience. In fact, these aggregators bring audience to content. They also provide an important service, scanning the ecosystem — with editors and algorithms — to find the good stuff, saving readers that laborious task and bringing attention to the best of what they find. I’ll discuss the pros and cons of the link economy in greater depth below.

Of course, the people formerly known as the audience play many critical roles in the ecosystem, using various creation and social tools: WordPress, Facebook, Twitter, Instagram, Pinterest, YouTube. The public discovers, shares, and promotes news content. Given half an opportunity, the public collaborates, contributing eyewitness reports, photography and video, effort, inspiration, and more than enough opinion. The economic value of such volunteerism in the news ecosystem is criminally underestimated and underexploited. Huffington Post allows thousands of contributors to do just what the job title implies — contribute content to its site, inspiring the occasional protest that Ms. Huffington enslaves writers and devalues content. But in truth, it’s the net that is the agent of content’s devaluation. Huffington Post brings its audience and their attention to writers. I frequently crosspost what I write on my blog onto Huffington Post because I want the larger audience and potential influence and impact I can find there. Thus the currency I seek from Huffington Post is not dollars; it’s distribution and attention. Similarly, when a reader contacts a news site with a tip, a picture of an event, or a question, she isn’t necessarily seeking money — though it’s still possible to sell the rare photo of the ubiquitous celebrity in tabloid-worthy pose — but may simply want to generously share information with others in the community. Or she might want others — journalists or community members — to look into a story or to offer support to a cause. Or she might just want the credit — the social capital — that comes with attention to her contribution. We must look past the unfortunate labels of “crowdsourcing” and “user-generated content,” which imply that we get the public to do our work or make more stuff for us. We must realize that the public’s contribution to the work of news can be valuable. The potential economic value of the public’s effort is so large it seems incalculable — until some smart startup provides a platform to capture that value as, say, Twitter had done. Twitter is much more than news, of course; it’s also cats. But Twitter found the way to enable and capture the value of voluntary contributions; as of this writing it’s worth $22 billion. I believe there are still more and better Twitters and Instagrams and Pinterests and YouTubes to be built.

I wish I could report more success in the building of ad networks in ecosystems to facilitate the aggregation of audiences for advertisers. Some sites use remnant ad networks but those are bottom feeders, lowering the value of online advertising. Google AdSense works wonderfully for Google but in truth, most small sites I know that use it earn enough to buy the occasional latte — and they are subject to hiccups in Google’s algorithms. Metropolitan newspapers have only half-heartedly tried to build such networks in their markets.

There are many roles legacy news organizations from local (a metropolitan newspaper) to international (a Guardian or New York Times or BBC) can and should play in their ecosystems besides — damnit — building ad networks. They can and should share content and audience to mutual benefit with others in the ecosystem. They should collaborate to create more journalism together than they can alone. They should promote the best work of others in the ecosystem, better serving their own readers in the process. But the greater opportunity is to rethink the very structure and work of a news organization around the existence of an ecosystem, to become a platform that enables and supports the work of others, helping communities share what they know on their own and adding journalistic and commercial value to that exchange as a supporter rather than a gatekeeper.

There’s nothing to say that the legacy players — from newspapers to wire services, from photo syndicates to broadcast stations to cable channels — deserve to survive. In 2009, when we at Tow-Knight did our initial modeling of a hypothetical news ecosystem in a market the size of Boston — five million inhabitants — the Globe was threatened with sale or, failing that, folding. Though we are delighted that in the interim, the Globe has survived, innovated, and found new owners and life, we nonetheless wanted to see what its ecosystem could look like without it. A team including Nancy Wang and Jeff Mignon of RevSquare and business analyst Jennifer McFadden, led by Tow-Knight’s Peter Hauck, researched and projected from known economics — revenue in advertising and other sources for successful hyperlocal bloggers; advertising rates on local sites; audience reach and frequency. They built a model with 100 small, medium, and large blogs covering towns and neighborhoods of 20,000 to 60,000 population each; plus a new news organization with a smaller but highly efficient newsroom (50 editorial employees and 90 total versus hundreds of each at the time for the Globe); plus an advertising network; and consideration for the value of the contributions of public media and volunteerism. We analyzed revenue from the bottom up — what sites of a given size were known to earn on given audience at market rates. Then we analyzed from the top down, using the Globe’s own proportion of digital revenue, which at the time, like most newspapers, was running at about 10 percent of print. For that amount of proven revenue, we projected that the market could end up with an equivalent number of editorial workers to what was in the Globe newsroom at the time — almost 300 across the blogs and the new news organization. All of them would be dedicated to local coverage and would be closer to and more accountable to their communities.

That vision has not been built, not yet. This is a long game and it will include — it already has included — many missteps and detours. I’ve already chronicled the fall of Patch. Blogs have come and gone and come still. I was particularly enthusiastic about TBD.com, a local effort in Washington run by Jim Brady. He started modeling that innovative service on a whiteboard at CUNY in a conference we held on collaborative news as he reimagined a newsroom built in an ecosystem, working with and helping support the bloggers around it. Sadly, TBD suffered at the hands of corporate politics and was never given a chance to succeed, folding only a few months after launch. But Brady won’t give up on local; as I write this, he is working on a local news startup in Philadelphia, BillyPenn.com. And in New Jersey, we are working to build the pieces of a successful, sustainable, higher quality local news ecosystem. We are getting sites large and small to collaborate and share content and thus audience — and soon, I hope, advertising revenue. We are recruiting and training beat businesses and helping them improve their advertising offerings and sales as well as site marketing. We are experimenting with events, membership campaigns, and shared backshops for advertising and marketing services. We will keep trying.


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