Tracking best practices in the business of digital news

Editor’s note: This post originally was published by Nieman Journalism Lab on April 15, 2014. For all slides and video from the Digital News Revenue Summit, as well as the full program, please visit the #newsrev landing page. — J.B.

By Jake Batsell

Reprogramming your thermostat every time the seasons change can be a maddening exercise. But that humdrum annoyance created a market opportunity for Nest Labs, whose $249 self-programming thermostat allows users to more easily manage their personal comfort.

What can the news business learn from the Nest thermostat? It solves a problem, and people are willing to pay for it. News sites should similarly aim to fill a need for — and, better yet, delight — their audiences, argues Michael Maness, the Knight Foundation’s vice president of journalism and media innovation.

Nest was one of the examples Maness cited during his provocative keynote talk, “Does Anyone Need It?” (slides/video), at the Digital News Revenue Summit earlier this month at the University of Texas at Austin. The one-day summit, part of my activities as a Knight-funded Texas Tribune fellow, brought together more than 90 participants from 27 countries on the day before the always-stellar International Symposium on Online Journalism.

The goal of the revenue summit — which I organized with my fellow Tribune fellow (and newly promoted publisher) Tim Griggs — was to discuss, debate and brainstorm ways to fund digital news. Tim set the ground rules in his opening remarks: We would not be discussing well-worn journalism conference topics, like The New York Times’ Snow Fall or Twitter’s role in the Arab Spring. The #newsrev summit had a singular focus: how to pay for journalism in an era when news consumers have infinite choices.

Subsidizing news through corporate sponsorships

An increasingly popular way to subsidize journalism is by courting corporate sponsors looking to reach an influential audience. As Nieman Lab has noted, the nonprofit Texas Tribune is a national leader in this area — last year, the Tribune generated more than $2 million through corporate underwriting and sponsored events. At the summit, I moderated a panel that took a deeper look at the evolution of the Tribune’s business model (slides/video), with practical tips from the Tribune managers who specialize in revenue streams including sponsorships, events, philanthropic donations, membership and crowdfunding.

Since its launch in 2009, the Tribune has significantly diversified its sources of revenue, becoming less dependent on donations from foundations and individuals while generating more cash from sponsors, members and supplementary streams including syndication and a Kickstarter campaign.

Given the growing scrutiny surrounding the role of corporations, foundations and wealthy individuals in funding nonprofit news, I was a bit surprised that the panel drew only one question regarding the ethics of sponsorships. Tom Laskawy, executive director of the Food & Environment Reporting Network, said that for his national, subject-specific news organization, “corporate sponsorships have appeared to be a deeply problematic thing to move into.” He asked Tribune panelists how they address the potential church/state conflict between sponsors’ business interests and the site’s editorial independence.

April Hinkle, the Tribune’s chief revenue officer and former publisher of Texas Monthly magazine, replied that the church/state divide has been a constant presence throughout her career. “There has always been that line, and no matter what, we will not cross it,” Hinkle said, adding that sponsors do not control the content of Tribune events or news coverage. (The Tribune recently expanded its disclosures of donors and corporate sponsors.)

The changing revenue mix

Advertising still dominates the overall U.S. media landscape, accounting for 69 percent of an estimated $65 billion in total news revenue, according to the Pew Research Center’s Jesse Holcomb, whose summit presentation (slides/video) was packed with nuggets from Pew’s State of the News Media 2014 report. But as Holcomb explained, audience revenue and non-traditional sources represent a growing share of the news revenue pie.

Nonprofit news outlets, a “growing but fragile” part of the U.S. media ecosystem, are clamoring for more time and resources to devote to business development, Holcomb said. Meanwhile, for-profit digital news startups attracted an eye-popping $300 million last year in venture capital, although their long-term sustainability — and venture capital’s staying power as a revenue stream for news — is far from proven.

Lara Setrakian and Kristin Nolan, fellows at Columbia University’s Tow Center for Digital Journalism, outlined early findings from their year-long Single-Subject News Project (slides/video). Most of the nearly 20 niche news sites participating in the Tow fellows’ study are seeking to establish diverse revenue streams, Setrakian and Nolan said. But the revenue combinations differ wildly as each site concocts its own individual mix of subscriptions, foundation funding, “freemium” paywalls, events, merchandising and the like.

Philanthropy: Still a “bridge to the future”

After spending all day exploring ways that both nonprofit and for-profit news outlets can generate more of their own revenue, the summit’s final panel (video) focused on the continued importance of philanthropic backing for important, public-interest news projects that are unlikely to be supported by sponsorships or subscriptions.

Seen Hau Tham, senior executive producer for KiniTV, an online television venture in Malaysia, said her for-profit social enterprise relies on philanthropic grants to “give us the opportunity to experiment into something that is risky, that we don’t know for sure that it could make money, but it’s very essential.” For example, she said, grants are enabling KiniTV to distribute online television reports to reach rural Malaysians who don’t read the newspaper.

Indeed, for all the day’s emphasis on self-generated income, panelists concurred that philanthropic donations remain critical to the survival of public-interest journalism.

“The fact is, there’s not a business model — definitely for nonprofits — without donations,” said Brant Houston, board chair of the Investigative News Network and Knight chair of investigative journalism at the University of Illinois. “Philanthropy is our bridge to the future right now. So please don’t pull the bridge up yet.”

The most fascinating part of the day may have been the late-afternoon working groups, when international attendees raised issues that even news nerds like me had never envisioned. If your news site is published in different languages, should you charge differently for content in each language? How do you respond when a militant group offers to “sponsor” your news organization?

So, what’s next? My final fellowship report, to be released later this year, will distill best practices in the business of digital news that I’ve encountered at the Tribune and its peers across the country. In the meantime, all slides and video from the Digital News Revenue Summit can be accessed via the #newsrev landing page on my fellowship blog, NewsBiz.

Jake Batsell, an assistant professor of journalism at Southern Methodist University, is spending the 2013-14 academic year as a Texas Tribune Fellow in Austin.

[UPDATE, 4/9/14: All slide decks, videos and working group documents are now available on the permanent #newsrev landing page.]

Welcome to Solving the Revenue Riddle: A Summit on Sustaining Digital News! Whether you are joining us in person or virtually via livestream and/or Twitter, we are grateful for your interest.

Registration is full for the summit, which is by invitation only. It will be held at the University of Texas at Austin’s Belo Center for New Media (Briefing Room, 5.208), 300 W. Dean Keeton St.

Live video begins at 8:30 a.m. CDT on Thursday via the #newsrev event pages on both The Texas Tribune and Livestream. We will break for lunch at 11:30 a.m. and return for our afternoon program at 1 p.m. The livestream ends at 3 p.m. as the conference breaks into individual groups.

Please see below for the full program and follow the hashtag #newsrev on Twitter.

PROGRAM AGENDA

8AM-8:30 AM Coffee/Tea/Light Breakfast

8:30AM-8:45 AM Welcome
Tim Griggs, Publisher and Chief Operating Officer, Texas Tribune

8:45 AM-9:30 AM Keynote: Does Anyone Need It?
Michael Maness, Vice President for Journalism & Media Innovation, Knight Foundation

9:30 AM-11 AM Panel: Evolving Revenue Strategies at The Texas Tribune
April Hinkle, Chief Revenue Officer
Maggie Gilburg, Director of Development
Agnes Varnum, Director of Events
Rodney Gibbs, Chief Innovation Officer
Natalie Choate, Assistant Director of Development

— Moderated by Jake Batsell, Texas Tribune Fellow —

11 AM-11:30 AM Briefing: The Shift From Advertising to Reader Revenue — A Deeper Look at the State of the News Media 2014 Report
Jesse Holcomb, Senior Researcher, Pew Research Center’s Journalism Project

11:45 AM-12:45 PM Lunch
1 PM-1:30 PM Briefing: The Startup Newsroom: Lessons From the Single-Subject News Project
Kristin Nolan and Lara Setrakian, Tow Fellows, Columbia University

1:30 PM-1:45 PM Briefing: Early Observations on the First Round of INNovation Fund Applications
Kevin Davis, CEO, Investigative News Network

1:45 PM-2:45 PM Panel: Philanthropy’s Ongoing Role in Supporting Public-Interest Journalism
Marie Gilot, Media Innovation Associate, Knight Foundation
Fatemah Farag, Founder and Director, Welad Elbalad Media Services LTD, Egypt
Brant Houston, Board Chair, Investigative News Network; Knight Chair, U. of Illinois
Seen Hau Tham, Senior Executive Producer, KiniTV, Malaysia
Herb Watkins, Board Chair, Austin Monitor / Capital of Texas Media Foundation

— Moderated by Kevin Davis, CEO, INN —

2:45 PM-3 PM Break

3 PM-4 PM Working Groups: Brainstorming Best Practices
Corporate sponsorships & advertising
Events
End-user revenue (memberships, subscriptions, etc)
Philanthropy
Supplementary streams (crowdfunding, syndication, training, services, etc)

4 PM-5 PM Reports From Breakout Groups; Concluding Thoughts

5:30 PM-7:30 PM PBS MediaShift/Texas Tribune Mixer at ISOJ
Hole in the Wall, 2538 Guadalupe St.


One day before the 15th annual International Symposium on Online Journalism, the Knight-funded Texas Tribune Fellows will host a Digital News Revenue Summit in partnership with the Knight Center for Journalism in the Americas. [UPDATE: This is an invite-only event and we are over capacity. However, livestreaming will begin at 8:30 a.m. CDT on Thursday.]

The summit, held on Thursday, April 3, 2014, at the University of Texas at Austin, will bring together journalists and researchers from around the world. The summit’s morning keynote — “Does Anyone Need It?” — will be delivered by Michael Maness, Vice President for Journalism and Media Innovation at the Knight Foundation. Maness will discuss the value of embracing and owning customer need as an integral part of a news organization’s core mission, not just a “necessary evil” to pay the bills.

The summit will bring together a diverse mix of confirmed participants from news startups (both nonprofit and for-profit), think-tanks and universities. It will include panel discussions about revenue-generating strategies, as well as briefings from the Pew Research Center’s Journalism Project, Columbia University’s Single-Subject News Project and the Investigative News Network.

The summit’s Twitter hashtag is #newsrev and most of the event will be livestreamed. Check back here for further details as the date approaches, or visit http://j.mp/newsrevsummit

Editor’s note: Earlier this year on NewsBiz, I wrote a blog post describing a four-phase audience research initiative led by my fellow Texas Tribune fellow, Tim Griggs, who has since been promoted to publisher and chief operating officer. The post caught the attention of Anika Anand, director of engagement for Chalkbeat, a nonprofit news outlet covering educational change in New York, Colorado, Indiana and Tennessee. In this post, originally published on her personal blog, Anand discusses her efforts to better understand Chalkbeat’s audience. — J.B.

By Anika Anand

Why study your audience? Simply put, without audiences there would be no media. In other words, a news outlet can’t exist without an audience.

A few weeks ago, I read a blog post written by Texas Tribune fellows Jake Batsell and Tim Griggs about how they’re studying the Tribune’s audience. In my job description (which is constantly evolving), audience research is one of the main bullet points. But how exactly do you go about doing it? I thought Griggs described it well in the blog post:

“The four phases are: 1) Market sizing, to help the Tribune understand its total potential audience; 2) Qualitative research (focus groups) that help shed light on what attributes make moderate-to-heavy users different from non-users, 3) Quantitative research (surveys) that will help paint specific audience profiles of users and prospects, and 4) Creating a user insight panel to call upon for informal feedback and beta testing.”

I like it when people break down a process into steps that seem fairly manageable, so I wanted to learn more. Batsell and Griggs were gracious enough to immediately respond to my e-mail and set up a time to talk about their process. By the end of the conversation, I realized that I (and other news orgs) could learn a lot from their work, which is very smart and thorough. But Chalkbeat doesn’t have the time, money or capacity to do the kind of in-depth audience research the Tribune did (yet!) So I gleaned the most important points we talked about and came up with a simplified, quicker “start-up” version of audience research for Chalkbeat. I narrowed it down to three main steps. (I told you I really like steps).

First, how do you define your audience? At Chalkbeat, this is how we break down our audience groups:

  • Education participants: These include students and parents/guardians.
  • Education professionals: People who work in schools. These include teachers, principals, assistant principals, instructional coaches and paraprofessionals.
  • Influencers/policymakers: People who influence or try to influence what happens in and to schools. These include lawmakers, policymakers, school board members, school system administrators, advocacy and nonprofit organizations.
  • General public: These are people who aren’t specifically focused on education but care about participating in local government and want to stay informed.
  • Now that we have an understanding of who we want to reach, step two is finding out the “addressable market.” Or in other words, what is our total number of potential readers? If I was going about this the way Batsell and Griggs are, I’d find out how many members the NYC teachers union has and I’d get an exact count of how many employees work at the city and state’s education departments. I hope to be able to do that down the road, but for now, I gotta ballpark the numbers.

    Very rough estimate of addressable market

    *The total estimated reader base doesn’t include policymakers, influencers or voters. Students are used as a proxy for parents.

    Now, ideally, we’d know exactly which group every single one of our readers falls into when he or she visits our site so that we know if we aren’t reaching enough parents or if most of our readers are only education professionals. But we don’t currently have a registration system for our readers to sign into and identify which group they fall into. So for now, we’re using our average number of unique visitors per month to understand how much of our total addressable market we’re reaching. This simple exercise (despite how rough my estimates are and how imperfect Google Analytics is) demonstrates that we’ve barely tapped our potential to reach our addressable market.

    The last step is by far the most actionable, which I like, because sometimes doing too much of this theoretical study feels unproductive. We’ve defined our audience, figured out roughly how many of them we’re reaching and now, obviously, need to figure out how to reach more of them.

    So I created a spreadsheet that details all the ways we can “distribute” and every single possible place we can distribute to. I created one of these for each of our bureau locations as well as nationwide (here’s a larger view).

    Distribution list template

    Everyone defines distribution differently, so I decided to specifically define what I think distribution could mean for us now: linking to our stories in a post, linking to our stories in a news roundup/newsletter, using social media to promote our posts, republishing our content and interviewing our reporters.

    I also didn’t want to limit our distribution to just media outlets, because it’s not the only place people get their information. If a teachers union links to our stories in an email newsletter, it’s just as valuable as that same story being republished in a popular city newspaper. It’s all about going to where readers are– not assuming that they will come to you.

    One last, important note: Audience research shouldn’t be done on a one-time basis. It should be an ongoing process to assess changes in who our audience is, their interests and how they’re getting their information. And as our audience changes, our content and engagement efforts should change too.

    By Jake Batsell

    In journalism education circles, few people have spent more energy trying to bridge the academic and professional worlds than Eric Newton, senior adviser to the president at the Knight Foundation.

    Newton’s recent digital book, Searchlights and Sunglasses: Field Notes From the Digital Age of Journalism, offers a “learning layer” of more than 1,000 lessons, resources and links for journalism educators in search of up-to-date class material. The book, which is free, sparked the creation of the PBS MediaShift microsite EducationShift: Moving Journalism Education Forward.

    I have a keen interest in tracking best practices not only in the business of digital news, but in the teaching of the business of digital news (I co-teach a Media Entrepreneurship course at Southern Methodist University in Dallas, and was a member of the inaugural class of Scripps Howard Journalism Entrepreneurship Institute fellows). So this week, when I visited the Knight Foundation’s headquarters in Miami, I asked Newton for some of his thoughts about how journalism schools should approach teaching entrepreneurial skills. Here are some highlights from our Q&A:

    You have strongly advocated the teaching hospital model of journalism education. But how does the teaching hospital approach match up with the growing emphasis at many j-schools on entrepreneurship and equipping students with the skills they need to create their own jobs?

    Newton: People are not really familiar with what teaching hospitals do. I gave a speech in Amsterdam that explains this. The actual teaching hospital, it’s got an emergency room … clinics where people are cured … and laboratories where research is done.

    The clinic side and the research side work together. They are inventing the new thing, but also doing the regular thing at the same time.

    This zero-sum idea that [journalism schools] have got to be practical clinics or future and high-technology labs, one or the other, doesn’t help solve the problem, because the solution is both.

    Given those dual missions, to what degree do you think journalism schools should be teaching students to set out on their own and launch their own news ventures and everything that entails, versus joining an existing news organization?

    Newton: The main question is, what does every student need to know? And [then] what should students be able to learn if they want to?

    Not every student wants to start his own or her own job or company. Not every student wants to work for a traditional news organization.

    Students need to know enough in the core curriculum so they can make an informed decision about what they want to do.

    [In] an ideal curriculum, the students would know both how to transform an existing news organization and how to create new products.

    But it’s hard to know whether schools of all sizes would be able to pull that off.

    [Still] when you strip away the question of the kind of company and the size of company [and look at] the underlying skill set, it’s possible that the fundamental skill set is not really significantly different.

    You should know something about media economics, whether or not you’re going to do your own company …

    You should know something about business, about numeracy, about technology no matter which way you go.

    Not everyone is going to want to run their own company … they should be able to if they want to. They shouldn’t go into a university that says it has a top journalism program and not come out the other end capable of doing a startup.

    In music programs, for example, you can go through the performance track, you can go through the teaching track, there are different kinds of specialties you can develop, but there’s an underlying musical knowledge that everyone has.

    So the big arguments now are, what needs to be in the core – what does every student need to know – versus what you can make available as an option.

    A certain amount of coding ability and numeracy is mandatory regardless of whether a student goes to work at a traditional company. A certain amount of, you might call it computational journalism — the ability to interrogate databases and interview algorithms — [is] a modern reporting technique that needs to be learned, somewhat beyond computer-assisted reporting.

    Some young people have grown up with HTML and Javascript and just know how to do that … Others haven’t exercised their math muscles in that way and would need more prerequisites to be able to do it. …

    The issue is developing a 21st-century core that has all of the key skill sets someone’s going to need, whether they stay in media, or simply use the communication skills in the rest of society; whether they go to create their own companies, [or] if they choose to be a scholar and stay and study media.

    It’s one thing to rip up the silos and to say, well, we’re not going to have a print track or a broadcast track – everyone’s going to learn digital things. Well, what digital things? What are the things you really need to know to do all we’re talking about? What is the true fundamental skill set … that allows [journalists] to bring to news and information the kind of added value that makes people want and need it more?

    Your recent book Searchlights and Sunglasses sparked a conversation that led to the creation of EducationShift. How can #edshift support the goal of better equipping young journalists with entrepreneurial skills?

    Newton: The power of new forms of media [is] increasing, and the speed with which the new developments are coming [is] increasing. So the old mechanisms for filtering best practices aren’t functioning as well.

    There might be, for example, 200 new valuable digital tools for journalists. Where’s the Consumer Reports website for these tools that explains them all, that catalogs them, that rates them, that says, ‘Our panel of journalists tried this one or that one’?

    The idea of #edshift is that it’s simply a place where people can share new things that they’re doing. Many educators already share things on the ONA Educators Facebook page. Others share things at conferences like South by Southwest or Journalism Interactive. Others share things on the Social Journalism Facebook page. Others share things through blogs.

    The idea here was to try to make things more convenient for journalism educators by having a place that deliberately reached out to those other places to see what the best of what they were talking about was, and trying to bring it to a location so you wouldn’t have to look to eight or 10 or 15 or 20 different places to see pieces of the conversation.

    If educators embrace it, it’ll evolve and improve. And if they don’t think that’s the best way to do it, then [we’ll] try something else.

    This Q&A was conducted, edited and condensed by Jake Batsell (@jbatsell), an assistant professor of journalism at Southern Methodist University, who is spending the 2013-14 academic year as a Texas Tribune Fellow based in Austin.

    Editor’s note: Widely shared online news videos force journalists to make quick decisions about how to handle the tsunami of clicks, as The Texas Tribune learned last summer with its YouTube feed of the Wendy Davis filibuster. I asked Matt Goodman, a Web editor at WFAA-TV in Dallas, to share some lessons learned from last week’s internationally infectious Dale Hansen Unplugged commentary. (This guest post was commissioned separately from the Tribune’s partnership with WFAA’s political news program, Inside Texas Politics.) — J.B.

    By Matt Goodman

    Dale Hansen doesn’t know what it means, but last week he went viral.

    Two Sunday nights ago, the longtime Dallas sports broadcaster aimed his eyes at the camera and unleashed 428 blistering words about the hypocrisy of unnamed NFL executives who told Sports Illustrated that a league peppered with spousal abusers, drug users and drunken drivers might not be ready to welcome incoming rookie Michael Sam, an openly gay man, into the locker room.

    Dale’s sentiment wasn’t necessarily new, but, as he admitted on The Ellen DeGeneres Show last week, “I’ve had several people today telling me that we were really impressed and we were really surprised that an old fat guy from Dallas, Texas, would say this.”

    After the segment ran, it took about 48 hours for the “Hansen Unplugged” commentary to claw its way to the top of Reddit. The link that made it was ripped and uploaded to YouTube by someone not affiliated with WFAA, which employs Hansen and me.

    Being atop the Reddit mountain has its benefits, primarily exposure. But when the link is sending folks to a third-party website, you’re missing out on hundreds of thousands of pageviews, shares and online currency.

    I’m one of four Web editors who manages content posted to WFAA.com. We were faced with a sudden decision: Should we pitch a fit and file a complaint with YouTube, citing our copyright (and breaking that precious Reddit link)? Or should we let the thing ride?

    We chose the latter, and Dale’s words spread far beyond North Texas. Outlets including Huffington Post, Gawker, Slate, Mother Jones and The Dallas Morning News, our neighbor and competitor, picked the story up and ran with it. Dale and his wife, Chris, were invited to be on The Ellen Degeneres Show. He was too busy to fit in Piers Morgan.

    This was a situation where we felt getting Dale’s message in front of as many eyes and ears as possible was more important than where our viewers and readers were seeing it. That’s not to say we didn’t benefit from the reaction –– Hansen’s commentary drew nearly three quarters of a million views, setting an all-time record for video views on our site. However, that YouTube clip, which was posted to Huffington Post and Gawker, has 4.5 million views (and counting), dwarfing our numbers. On the surface, that disparity seems like a cause for alarm. In reality, it didn’t really matter. Our brand was seemingly everywhere. Dale became the de-facto voice on one of the nation’s most hot-button topics last week. And he made a difference: he heard from people in Australia, Canada, Finland, Great Britain and, in his half-joking words, “every state in the union other than Alabama or Mississippi.” A Canadian teenager sent in an eloquent email saying that he now had the courage to discuss his sexual orientation with his parents because Dale, the self-proclaimed old fat guy from Texas, had the courage to support Sam on television. Dale’s eyes welled up telling the newsroom about this.

    The head of our digital department has an analogy he likes to mention: Sprite’s advertising campaign centers on getting in front of as many eyes as possible. That way, when consumers are staring at a wall of sodas, they’re more likely to choose Sprite if they can associate it with the ad they saw on the bus, billboard or wherever. If they don’t see that ad, maybe they walk away with a Pepsi.

    Opportunities like Dale’s viral commentary can expose WFAA to a viewership that may have otherwise had no idea about who we are. This piece of strong content resonated within them. The long-term value certainly is more difficult to quantify than Web analytics, but perhaps some of these folks will return to us for news because of the experience Dale gave them.

    Sometimes, you’ve got to let it ride.

    By Jake Batsell

    Nonprofit newsrooms have a new opportunity to boost their business capacity through the $1 million INNovation Fund, a partnership between the Knight Foundation and Investigative News Network. Beginning Feb. 1, nonprofit and public news outlets can apply for entrepreneurial micro-grants worth up to $35,000.

    Before you hit the send button on that application, though, pay attention to some advice from Knight’s Marie Gilot, who told Nieman Journalism Lab that applications “will need to have a proper understanding of the site’s audience” as well as a plan of action and methods for measuring success.

    I found Gilot’s comment about audience awareness to be particularly telling. For too long, too many journalists (myself included) took their audience for granted. That’s not a viable attitude anymore — today’s news consumers have infinite options, which means it is imperative for media outlets to deeply understand their audience and earn its attention.

    Over the past two years, I’ve learned a lot about audience engagement strategies while visiting news outlets in the United States and United Kingdom for my forthcoming book, Engaged Journalism. Knowing your site’s analytics and traffic patterns is just a starting point. Another basic, fundamental step is conducting a survey that sketches out a more detailed portrait of your audience.

    Here at The Texas Tribune, an audience identification survey in May 2012 (conducted for free, by the way, via Google Forms) drew 872 responses in two days. It unearthed some interesting nuggets: The Tribune found out that 91 percent of its readers are college graduates, 96 percent voted in the last election and 52 percent have a household income over $100,000. That’s a smart, affluent audience, so the Tribune trumpets the survey results to potential sponsors and advertisers in the site’s media kit.

    Other nonprofit news outlets have found that audience research can translate to business success. VTDigger, a political news site in Vermont, conducted a similar audience survey and also summarizes the highlights (pictured above) in its media kit. In an interview for an earlier NewsBiz post, founder and editor Anne Galloway told me that the survey results immediately became a selling point that helped attract more sponsors and underwriters.

    “It’s made a huge difference for us, because we’re able to show sponsors that our readers are very civically engaged,” Galloway said, noting that the survey found VTDigger readers “are involved in their communities on many different levels — they’re churchgoers, they’re volunteers at schools, they’re very politically active. More than 95 percent of them vote every year. And they have interests that underwriters appreciate — they’re outdoorsy, they like to ski, they like to go to cultural events and that kind of thing.”

    Another nonprofit news stalwart, Voice of San Diego, uses SurveyMonkey to administer reader surveys. Mary Walter-Brown, the site’s head of advancement, recently observed that surveys can be even more revealing when the target audience is broken down into specific segments — for example, separating results between people who have given the site money and those who haven’t, e-mail subscribers versus non-subscribers, and the like.

    Kevin Davis, the Investigative News Network’s CEO, told me that when he reviews applications for the INNovation Fund, he’ll want to see not only details about a news outlet’s existing audience but also a solid plan showing how a grant will help that audience grow.

    Finding and cultivating the people you aren’t currently reaching is a key premise behind a four-part audience research initiative now underway at the Tribune, spearheaded by Tim Griggs, my partner in the Knight-funded Texas Tribune Fellowship program.

    As Griggs describes it, “The four phases are: 1) Market sizing, to help the Tribune understand its total potential audience; 2) Qualitative research (focus groups) that help shed light on what attributes make moderate-to-heavy users different from non-users, 3) Quantitative research (surveys) that will help paint specific audience profiles of users and prospects, and 4) Creating a user insight panel to call upon for informal feedback and beta testing.”

    For Phase Two, the Tribune convened a pair of real-time, online focus groups in late January — one group of regular, loyal Tribune readers, and another group of heavy digital news consumers who are interested in the subjects the Tribune covers, but don’t use the site.

    For the Tribune staffers who watched the online focus groups, the feedback was both affirming and humbling. On the plus side, existing users from varied political backgrounds vouched for the Tribune’s nonpartisan coverage and reported strong familiarity with many of the site’s news products and events.

    On the other hand, none of the existing users said they had donated money in support of the Tribune. And non-users viewing the Tribune for the first time expressed confusion and skepticism about the site’s mission, its sources of funding, the originality of its stories and even the trustworthiness of Tribune news apps that collect public data from state agencies. All this for a site widely considered to be one of the nonprofit news world’s “runaway success stories.”

    In some ways, the blunt but honest feedback from the group of non-readers was more valuable than the praise from regular Tribune users, said Amanda Krauss, the Tribune’s director of technology.

    “I’m actually kind of happy to see they were skeptical and we had to impress them,” Krauss said. “We have to work harder? OK, we’ll work harder … It gave us direction. It wasn’t just a pat on the back.”

    In other words, earning an audience’s loyalty and attention is a lot easier when you take the time to listen.

    Jake Batsell (@jbatsell), an assistant professor of journalism at Southern Methodist University, is spending the 2013-14 academic year as a Texas Tribune Fellow based in Austin.

    Note: “Brass Tacks” is an occasional series focusing on pragmatic advice for selected best practices in the business of digital news.

    By Jake Batsell

    Membership drives for nonprofit media have evolved far beyond volunteers taking pledges over rotary phones.

    Today’s leading nonprofit news outlets operate as mission-driven businesses fueled by corporate sponsorships, events, philanthropic donations and other revenue sources. That same degree of sophistication applies to memberships, which remain an important part of the fundraising mix.

    The Texas Tribune tallied $668,642 in membership revenue in 2013, a 31 percent jump over the previous year. Memberships accounted for roughly 13 percent of overall revenue during a record-setting year that brought in $5.1 million.

    The Tribune has learned plenty of membership tricks since its debut campaign in late 2009, when 1,400 people signed up while pledging about $145,000. In 2013, about 2,700 people joined or renewed their Tribune memberships, with a renewal rate of 70 percent.

    Running an effective membership program is a complex, never-ending endeavor. I asked the Tribune’s director of development, Maggie Gilburg, and assistant director Natalie Choate to share some of their core strategies:

    Define ‘the ask.’ Are you asking people to join primarily based on benefits they will receive, or is their membership a vote of confidence in your mission? The Tribune offers modest benefits ranging from monthly newsletters to invitations to VIP events, but its membership strategy mostly focuses on selling the value of the Tribune’s public-service journalism. “It’s really a philosophical ask: Please support our mission at the level that’s most comfortable for you,” said Gilburg, who has been with the Tribune since its launch.

    Choate, who joined the Tribune in 2011, said that while early membership efforts were geared toward introducing the Tribune, more recent campaigns have focused on convincing potential members why the site’s work is important. “If they haven’t given yet, in my opinion, they don’t know why we’re important yet,” Choate said.

    Plan ahead. Choate, the point person for the Tribune’s membership drives, begins preparations months ahead of time. After settling on a campaign theme, she crafts messages catered to five modes of delivery: email, social media, direct mail, the site itself and membership events. (Email tends to be most effective, because people on distribution lists have shown some form of previous support or interest in the Tribune.)

    Choate said it’s important to seek buy-in from the entire organization, from department heads to designers to the newsroom. She invites employees to membership happy hours and circulates pre-written social media statuses that staffers can share if so inclined.

    Push for multi-year pledges. Some public broadcasting stations have found success by adopting sustaining-membership programs based on automatic monthly donations. The Tribune doesn’t take that approach, but has found a stable source of revenue with its “editor’s circle” program, in which supporters pledge up to $5,000 annually for three years. “That was really genius in a box in terms of revenue growth,” Gilburg said of the circle program, which began in the summer of 2010 and has grown to produce $354,500 in annual contributions from 173 members.

    Persuade existing members to give more. It’s hard to convince people unfamiliar with your organization to make a major donation, which the Tribune defines as more than $5,000. On the other hand, existing members may be willing to contribute more, as fellow nonprofits like the Voice of San Diego have found. “We’re developing a donor base, and we’ll move those people down the line,” Gilburg said. “From their earliest contribution, the connection deepens.”

    Evaluate the returns. Cultivating and maintaining a membership base is an “exceptionally large task,” Choate said. For some nonprofit news organizations, the costs to staff, promote and maintain a membership program may not be worth the effort. It’s important to weigh the expenses against the returns.

    “If you hire a person for X, and they bring in less than X, then it’s not worth it,” Gilburg said. “There are intangibles that are not bottom-line benefits, but it’s definitely an investment.”

    Jake Batsell (@jbatsell), an assistant professor of journalism at Southern Methodist University, is spending the 2013-14 academic year as a Texas Tribune Fellow based in Austin.

    By Jake Batsell

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    If a consensus has emerged so far during my year-long quest to track best practices in the business of digital news, it’s the imperative of revenue diversity. Virtually every news organization I’ve talked to — legacy or startup, nonprofit or for-profit — is hustling to develop new, varied sources of revenue that can help pay for journalism in the public interest.

    I found myself returning to this theme last week during a wide-ranging interview with Tom Grubisich of Street Fight Magazine. Tom’s questions and my answers follow below:

    There’s a lot of talk about finding the right “model” for community news. Is there such a model, and, if so, what are its essential ingredients, regardless of such circumstances as community location and demographics? Or, alternatively, is there more than one model?

    There isn’t a universal recipe. What works for a neighborhood site in Seattle might not work for a small newsroom covering state politics in Vermont, and vice-versa. That said, many news organizations I’ve visited are tapping into a common set of promising revenue streams: corporate sponsorships and/or advertising; face-to-face events; memberships and/or subscriptions; and supplementary revenue streams including services, training, syndication, crowdsourcing and other initiatives. And among nonprofits, of course, foundations and major donors remain a critically important part of the mix.

    So, if there is a “model” for community news, it’s finding the right mix of diverse revenue streams that are best suited to the particular conditions of a news organization’s local market and journalistic mission. But that diversity of revenue is critical, because news outlets depending on a single stream of income are leaving themselves vulnerable.

    Can even small publications have multiple revenue streams?

    Small publications not only *can* have multiple revenue streams — they *must* have multiple revenue streams if they want to survive. The graveyard of digital news startups already is full of failed ventures whose founders realized too late that they could no longer rely on the good graces of donors and foundations, or a single syndication client, or an overpriced subscription model that lacked the value proposition to justify it.

    On the other hand, there are plenty of encouraging examples with respect to particular revenue streams. In just two years, VTDigger went from zero dollars in corporate sponsorships to almost $200,000 — nearly half of its revenue base for the current year. In Seattle, GeekWire earns roughly 40 percent of its revenue from events (and has a lot of fun throwing them). And My Edmonds News makes a nice chunk of change by livestreaming high school sports. The list goes on.

    Patch, one of the biggest experiments in hyperlocal journalism, is being downsized and possibly sold off. Do you think it will be salvaged in a way that will be good for community journalism in the digital era?

    The saga of Patch seems to have taught us that, at least for now, hyperlocal journalism doesn’t scale at a national level. I wouldn’t be surprised to see some of the Patch sites live on in some form, whether through regional partnerships or individual spinoff sites in local markets. Building an audience from scratch is hard, and every community needs trusted sources of news and information, so the Patch sites that best serve their audiences may well survive, whether under AOL’s ownership or someone else’s. Meanwhile, in communities where Patch shuts down, locally owned community sites may see an uptick in advertising.

    Have you seen any publication — legacy or pure play, for-profit or nonprofit — that, so far, appears to have developed a successful news model?

    Actually, it has been heartening to see that quite a few startup news organizations are making progress toward financial sustainability. A strong majority of the 18 nonprofit news organizations profiled in the Knight Foundation’s “Finding a Foothold” report ended 2012 with a surplus, and the LION group of local independent news sites has grown to more than 100 members. Plenty of news start-ups have failed, too, but more have survived than I would have expected a few years ago.

    Again, there’s no one-size-fits-all model. But whether a news startup is nonprofit or for-profit, its financial success often boils down to finding creative ways to attract an engaged, loyal audience that advertisers and sponsors want to reach, both online and in person. And sites that directly charge for content must fill a need that subscribers can’t find anywhere else.

    The diligent news reporter is often portrayed as attending public hearings that go on for hours, and writing away in his/her notebook. But can’t that practice be very inefficient, when you divide all the events and issues by that one reporter scribbling away at one long meeting?

    It really depends on the mission and scope of the news organization. Subscribers to a niche news service like Politico Pro might expect a reporter to sit through every minute of that public hearing and blast out nuggets of information in real time (although she would likely be typing email updates and text alerts on her laptop or mobile phone, not scribbling in her notebook). Meanwhile, a reporter at a community site like the New Haven Independent might skip a routine zoning hearing to cover something else important to his community, then follow up the next day with sources at City Hall to find out what happened at the hearing.

    I diligently sat through some of those interminable public hearings myself as a newspaper reporter, but my salary was subsidized by classified ads and Sunday double-truck ads, so I didn’t have to worry about how many people would actually read my story on page B5 of the Metro section. Today’s journalists have to demonstrate relevance to their audience much more directly than I ever did.

    As I’ve written on my fellowship blog, NewsBiz, a key consideration for any modern news organization is deciding what not to cover.

    Texas Tribune has innovated in re-purposing data as news, and interactively with users. Can other publications — especially small ones — do the same thing?

    You bet they can. Many journalism groups offer introductory workshops and even online courses about how to visualize data by using services like Google Fusion Tables and TableauAxis Philly and the Denton (Tex.) Record-Chronicle  are two smaller news organizations that have caught my eye recently with their data efforts.

    Journalists who are new to data reporting often ask how they can possibly balance data projects with their regular output of stories. Well, here’s an answer: Data visualizations are stories, too! At least that’s the mindset I’ve encountered at the Texas Tribune — the Tribune’s newsroom considers its data applications to be stories in and of themselves, not merely accessories to stories. In some cases, the written story might only be a couple of paragraphs that explain the data sets and invite readers to explore away.

    Do you think the challenge of sustainability is so great that the answer might have to include government support?

    No. The best thing the government can do to support nonprofit news is help foster a more cooperative relationship with the IRS to eliminate confusion and delays during the 501(c)(3) approval process. Direct government funding (beyond the existing funds distributed by the Corporation for Public Broadcasting) would be a bureaucratic hassle and slippery slope.

    Community news sites can better control their financial destiny by relentlessly focusing on expanding “earned” revenue — that is, by creating more of their own revenue streams.

    There’s talk about community sites benefiting from new trends in “programmatic” advertising where businesses seek engaged users (right down to the census-tract level) and not just big numbers. Should community sites exploit this trend in any way — or should they stick to attracting merchants and other businesses within their community?

    In theory, I’m all for it. If a community news site attracts a valuable, engaged, local audience that advertisers want to reach in a more targeted way, why shouldn’t that site capture more of the value it has created? And if national advertisers’ products are relevant to local readers’ lives, why shouldn’t they reach a more engaged audience by using more efficient technology?

    Ultimately, though, it’s a judgment call. If a brand-new TGI Fridays opens in the neighborhood and dangles a census-targeted $500 ad that would upset the local restaurants who have been loyal advertisers since the beginning, I understand why a news site might think twice about publishing the ad.

    Based on your experience touring newsrooms and talking with journalists from both legacy and pure-play publications, what’s your take on how well community journalists are adapting to the challenges of the digital space? Are they in a sheer survival mood, or are they figuring out how to successfully exploit their new challenges?

    I think most journalists are keenly aware of the challenges their industry faces, but some are still struggling to change their work habits in a way that reflects the demands of an increasingly digital and mobile audience. And some remain hesitant to embrace a closer relationship with the business side of their news organization, not realizing that it ultimately is in their best interests to do so.

    I’ve become a big believer in Raju Narisetti’s mantra that the modern definition of a journalist’s job must include “getting more people to consume more of my journalism” (slide 6 of his show “Journalism Matters but Experiencing That Journalism Will Matter Even More”). And all the news organizations I’ve mentioned (as well as those I’ve mentioned on NewsBiz) are, in one form or another, responding to those economic challenges.

    Jake Batsell (@jbatsell), an assistant professor of journalism at Southern Methodist University, is spending the 2013-14 academic year as a Texas Tribune Fellow based in Austin.

    By Jake Batsell

    Perhaps you’ve heard this narrative before: A statewide nonprofit news startup builds a loyal audience of political insiders and policy wonks, then boosts revenue by selling sponsors access to that audience — both online and in person.

    It’s a formula that has worked for The Texas Tribune. And in New Jersey, NJ Spotlight is following a similar path.

    Since launching in mid-2010 with the support of several foundations, NJ Spotlight has diversified its business model with streams of revenue including events, advertising, content licensing, and, this year, a trio of sponsored webinars.

    “We’re building brand equity, and anything that helps us do that and has a positive cash flow associated to it, we’ll pursue,” said Kevin Harold, NJ Spotlight’s publisher.

    NJ Spotlight will tally roughly $900,000 in overall revenue this year, Harold said. He expects about one-third of that total will be “earned” revenue — industry shorthand for self-generated income from non-philanthropic sources.

    Most of the Spotlight’s earned revenue comes from its series of in-person roundtable events. But the site generated an extra $20,000 this year by hosting three sponsored webinars on topics including offshore wind power, electricity and health care.

    Harold said the webinar format works best for a sponsor looking to make its case on a complex state policy issue that “begs a platform to get into the granular nature of it.” For example, the Spotlight’s webinar about offshore wind included presentations by a New Jersey company proposing an offshore transmission system, as well as by a European firm with previous experience in that area.

    A reporter or editor moderates each webinar, which lasts about an hour. Sponsors present a slideshow, then answer questions posed by the moderator or the virtual, real-time audience.

    The pitch to sponsors, Harold said, goes something like this: “You have a content-rich story to tell, we have an independent flag. We will challenge you on things that you say, but we’ll give you a platform to say them.”

    The webinars aren’t technically dazzling, and they don’t draw massive audiences. The Spotlight’s three webinars drew an average of about 70 live participants, although they also are archived on the site.

    Those who do tune in are well-educated and influential. A recent readership survey found that 94 percent of NJ Spotlight’s readers have at least a bachelor’s degree, and many readers are government employees or work within policy-dominated industries such as education, health care and energy.

    The Spotlight’s webinars brought in roughly $6,500 each at minimal cost, creating another supplementary revenue stream. It’s a modest windfall, but it’s another example of how a small news organization can capture value from a solid journalistic reputation and an audience that sponsors find attractive.

    “These things are one-shot deals — as soon as we pull a rabbit out of one hat, we’ve got to move on to the next one,” Harold said. “But we get better and better at executing, we build brand equity, we aggregate the audience, we bring value … all that’s good.”

    Jake Batsell (@jbatsell), an assistant professor of journalism at Southern Methodist University, is spending the 2013-14 academic year as a Texas Tribune Fellow based in Austin.

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