The Survey Results

Posted on 17. Sep, 2009 by in Hyperlocal, New News Organization, Revenue

The foundation of the business models we built this summer was data culled from an online survey we conducted of web entrepreneurs. We asked online startups from across the country to give us a confidential glimpse at the nuts and bolts of their businesses.

We sent invitations to hundreds of online news organizations, from hyperlocal blogs serving small communities to outfits that cover major American cities. In all, we received responses from 111 websites (81 for-profit, 30 not-for-profit). The entire interim report presented at the Aspen Institute last month is available here. (The New Business Models for News Project has been funded by the Knight Foundation.)

As expected, many of the for-profit ventures are bootstrapping their businesses with 20 employing 2 or fewer full-time editorial staffers (out of 27 businesses that answered the question). Meanwhile, 14 do not have any full-time workers on the business side. (Part-time staff levels at most sites are similarly low.) A majority of the sites, 58%, reported bringing in less than $500 per month in advertising–that won’t pay for a newsroom expansion anytime soon. However, we found plenty of room for optimism, too. A dozen respondents, or 14%, make more than $5,000 per month in advertising revenues alone.

Most of the folks running these sites are journalists with little business experience, so it is not surprising that many of the responses to the question ‘what are your biggest challenges’ revolved around getting help selling advertising and developing the business. Here is a sample of the comments:

Getting local businesses to understand the value of advertising on the internet. This problem is HUGE. Even with our large amount of traffic, it’s hard to get local businesses to take us seriously because we don’t have a print product.

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Sales, sales, sales. And pricing. I think I have a service I can sell here. But I need to sell it and then handle the invoicing and record-keeping. Since this is something I’m doing on the side, I let the sales efforts lag while I spend most of my effort creating the content.

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As the owner/editor/publisher, I have trouble balancing the news and administrative aspects of the job. I’m really a journalist at heart, so given a choice, I’d rather write a news story than work on a spreadsheet or a web page coding problem. I am actively seeking a publisher to join me, perhaps as a partner, to help guide the business side.

Here are the survey results from the for-profit news outlets. Click here to download.
New Business Models for News survey results — For-profit

The survey results suggest that the not-for-profit model has been more successful at building a larger staff, at least at the beginning. Roughly half of the not-for-profits, 12 of 30, reported having more than three full-time editorial staffers. Employment on the business side also trends higher.

Still, the not-for-profits want help developing new revenue sources that will help them keep all of their colleagues around (or even hire more). As the example of the Chi-Town Daily News makes clear, finding that sustainable model is not a sure thing. Here is a sampling of their comments:

Sustainability, of course, is our paramount concern. But we seem to be on a road to a healthy and robust diversification of our resources. Our biggest concerns revolve around defending potential legal attacks and improving technology without investing in innovation.

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Finding a steady source of income in order to continue to employ an editor and to offer him a decent salary and benefits.

Here are the results from the 30 not-for-profit news organizations that participated in our survey. Click here to download.

New Business Models for News survey results – Not-for-Profit

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