Panel highlights

Pekka Pekkala

Former journalists who have turned to blogging full time know how to “do really good journalism,” but many have no idea how to make money, says writer Pekka Pekkala who found himself following some blogs to catch up on local news after moving to Los Angeles four years ago. He decided to focus his master’s thesis at the University of Southern California Annenberg School for Communication and Journalism on journalism startups. Pekkala shared insights from his research and experiences during "The Funding of Journalism: Practice, research and future," a panel session featured at RJI's recent five year anniversary event. He proposed a two-year research project for the USC and the University of Tampere, Finland to see if there was a solution to help these journalists make money.

What he learned

  1. Worldwide, advertising is the still the major revenue stream of journalism startups.
  2. Journalists who start their own news or niche blogs often lack the business skills needed to make their business sustainable.

“Former journalists, now publishers, told me that the biggest step for them to realize… [is] that I’m running a business… If I want my business to succeed, I have to like the business part as well because it’s taking at least half of my time,” said Pekkala, who is currently writing a book “How To Keep Journalism Profitable.” However, the journalists are the ones who best understand the value of their publication. Creating news startups require:

  1. A lot of hard work
  2. The ability to cut costs
  3. Understanding business skills

Reade Brower

Reade Brower is a publisher of four newspapers and an innovative web-based Internet platform called Village Soup. The company is based in a small mid-coast community in Rockland, Maine. The Free Press was started by he and his wife in 1985 and The Courier-Gazette, Camden Herald and Belfast Republican Journal are legacy papers that competed with him until March of 2012 when their former owner closed without warning and Brower purchased the assets. The Free Press had record print revenues in 2012 and the Courier newspapers and Village Soup were profitable as well in the 9 months they were owned by Brower. According to Brower, the revenue in 2013 is pacing ahead of 2012 in all four newspapers.

Brower’s three keys to viability and a “bonus” key

(1) Sustainability

“We must create a sustainable revenue model to keep from going dark again,” said Brower. “Under the previous Village Soup model, my wife went online morning, noon and night to get her local news giving her absolutely zero reasons to go to the newsstands on Thursday to buy their printed newspaper product.” Creating a pay wall is essential to help pay a team of reporters who gather the news, said Brower. Giving away the core product just isn’t sustainable.

(2) Change and adapt

“But don’t throw the baby out with the bathwater,” said Brower.

  • Brower still believes in the print product. “When I look to the future, I’m still optimistic about print,” said Brower. “I don’t believe print is dead. I do believe it has bottomed out.”
  • Don’t give away the product; if your content is costly, readers must pay for it.
  • Invest in your product — over the last decade most of the strategies have been to “cut, cut, cut.”

“There gets to be a point where there isn’t enough people on the streets and there is terrible morale,” said Brower. “There comes a time to invest.” One example is the Orange County Register — the Register increased the amount of content it was producing, which led to more circulation and more advertising, which, incidentally, leads to more profit.

(3) Innovation — Create alternative advertising revenue sources

“Banner advertising alone just doesn’t cut it,” said Brower. “Never has and it never will.” The unique revenue model of the “Village Soup” platform is their biz memberships. For $25 per week, advertisers promote themselves on the news site through press releases and business specials. They also get free classifieds ad and banner ad that rotates within the site. With more than 300 biz members, this innovative move produces about $400,000 of annual revenues, which is a vital part of the revenue mix needed to succeed, said Brower.

  • Watch the full video to learn how Village Soup implemented innovation into its advertising and see why 15 independent publishers around the country have adopted the Village Soup platform as their own.
  • Find a way for print and online to work together. “Studies show that when advertisers use both print and digital publications they have better results,” said Brower.

And the “bonus” key….

(4) Hard work — No silver bullet or magic pill

These two “four-letter” words provide the missing ingredient. “Sales reps need to hit the streets and be ad rep, counselor and friend. We tell our reps to sell until it hurts and then go sell some more,’” said Brower.

Ron Blevins

Blevins has worked in the advertising industry for more than 12 years and is currently the vice president of digital strategy of Novus Media, of Minn. Novus Media is a media strategy agency.

There are currently two businesses at Novus Media:

  1. A local digital strategy business with a team of 16 digital strategists who concentrate solely on developing digital media plans for local markets.
  2. Circular migration business – Large national retailers depend on print publications to deliver their weekly item and price messaging through circular insert advertisements. Consumers also reply on the weekly advertising.
  • “This is one of the most effective forms of advertising that has ever been and probably ever will be,” said Blevins. “It actually serves as entertainment. It is consistently ranked as one of the top read portions of the Sunday newspaper.”
  • Circulation insert advertisements also help retailers manage their inventory.
  • However, this type of advertising is being threatened.
  • “As newspaper circulation declines, as readership declines, as engagement with the medium declines, retailers need another option to deliver that item and price messaging,” said Blevins.
  • The retailers’ dilemma will only increase with time as media consumption habits continue to shift toward digital.
  • No viable alternative exists today with the same scale as print delivered circulars.
  • Tablets may hold the solution based on the “lean-back” nature of the user experience differing greatly from PCs and smartphones.
  • According to Blevins, Novus Media is helping clients explore ways to deliver content and utilize various technologies in order to migrate from print to a mix of print, digital and future distribution means.

Jennifer Nelson-Pallikkathayil  
Senior Information Specialist


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