Three ways news outlets are making money

Photo credit: Nick Ares

Among all of the seminars being tweeted about last Friday at the Online News Association Conference, there was one that rose to the top. Festooned with the hashtag #newsrevenue, it was a panel on revenue and ethics, called The Revenue Review: Memberships, Advertising, and Events, and attendees were clearly loving it:

 

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#newsrevenue #ona15. One of the meatiest sessions so far,” tweeted Jan Schaffer, founder of J-Lab at the American University School of Communication. Diana Heitz, a news platform editor at CNN, chimed in with a nod to the moderator, @kairyssdal, saying “ #newsrevenue might be most important session at #ONA15. I get it. I get it.”

 

 

And then this from Katie Hawkins-Gaar, a faculty member at Poynter: “The transparency in this #newsrevenue panel is so refreshing. Everyone is furiously taking notes. Bravo to the panelists. #ONA15

 

 

The panelists who were giving their audience such a thrill were three executives from digital native newsrooms: Mary Brown, publisher of Voice of San Diego, Evan Smith, editor in chief of Texas Tribune, and Joy Robins, SVP of Global Revenue and Strategy for Quartz. They were on a stage at ONA because they were doing what nearly every media organization, large and small, is pulling their hair to do: They were making money on the news.

Even more exciting to the audience was that the panelists were talking openly about how they were doing it. VOSD and Texas Tribune are both non-profit, public service journalism outfits that rely on a combination of individuals donors, foundations, and corporations for cash flow, while Quartz is entirely driven by native advertising–and for the purposes of this panel, they were each going to delve into one of their revenue streams. With less than 10 minutes each, Brown delved into VOSD’s successful membership program, Smith advised on turning a profit off events, and Robins talked about how to do quality digital advertising in such a real, non-salesy way that it felt like internet ads had a viable future again. 

Like a finger pointing at the moon, their models may just point to the future of journalism, the new models’ new models for news.

After years of one apocalyptic crisis after the next (with ad blockers being the most recent), the panelists seemed to feel that it was incumbent upon them to share the secrets of their success. So in the spirit of a source-available system, operating in the flesh, they gave their colleagues a glimpse of their code. And while their development strategies differed, they also overlapped in important ways, especially when it came to customer service and other time-honored tools of business. Like a finger pointing at the moon, their models may just point to the future of journalism, the new models’ new models for news. 

 

Members only?

Among the three models, membership seemed almost old-fashioned in the context of new media. Yet it may be that perception, that patina of tradition, that helps explain why newsrooms don’t develop it more. (When Brown asked the audience how many of them had customer loyalty programs, only a few raised their hands; Ryssdal commented, “that’s not very many!”)

Brown then laid out her case. “Do you have an audience who values what you do?” she asked the audience. That “rare breed” of person that values investigative journalism and is willing to pay for it? If the answer is yes, she counseled, then asking them to give money on a regular basis to support the public service a newsroom provides can be a very predictable revenue stream–and one with huge potential. 

“We had a guy who gave $50 the first year, $5,000 the next year, and became our top tech advisor the following year. So if you get to know these folks and you build a relationship with them … they can be very valuable.”

Now that VOSD’s membership program is established, the focus is keeping it vital, and that comes down to business 101: It’s all about the customer. Brown stressed the importance of giving readers plenty of ways and opportunities to sign up, of making sure they know who produced the content they’re reading, regardless of where or how they consume it, and to create an emotional connection by giving the newsroom a story and engaging members in its narrative.

We’re awesome at telling other people’s stories, but we never tell our own. It’s really hard to develop a relationship with readers when they don’t know who you are.”

“We’re awesome at telling other people’s stories, but we never tell our own,” Brown said. “It’s really hard to develop a relationship with readers when they don’t know who you are.”

The heart of the VOSD membership model is all about access and experience. The CEO sends members a monthly report that gives them a taste of what it’s like to run a newsroom, complete with snippets of VOSD’s struggles, previews of upcoming big investigations, and anything else that engages them in the newsroom’s narrative and helps members understand what it needs to survive.

VOSD also hosts monthly coffee sessions and offers experiential bus trips, like taking members to meet their elected officials, for example, or across the border into Mexico for an in-depth discussion of cross-border commerce.

Brown pulled up a slide that illustrated the back end of this program, a complex-looking ecosystem of software. She spends 50 percent of her time on membership alone and has a team of people devoted solely to its cause and keeping the database current. Her worst nightmare is talking to members “the wrong way,” she said–for instance, asking someone who gave $1,000 why she hasn’t given anything. “It’s very damaging,” Brown added. Still, with more than 1.3 million unique visitors to the site last year, 15,000 subscribers, and 2,000 members, Brown sees opportunity to go after “low-hanging fruit.”* Her goal is to get the rest of those 1.3 million visitors into the VOSD membership funnel and translate them into dollars.

 

Turn your events into dollars

As soon as Brown passed the mic, Smith leaned over and asked for a copy of her notes. He then drilled into the nuts and bolts of events, one of the cornerstones of Texas Tribune’s financial success. After speaking compellingly about the importance of these events to the people of Texas–hard-hitting and on the record, they function as a kind of public square, he said, giving the people of Texas a chance to hold their elected officials accountable–Smith gave some practical tips on how to make them profitable: Host events on college campuses, since most of the time it’s free to do so and colleges also think of themselves as public squares; align with local media; pay for nothing, trade for everything; and do the events yourself, never source them out.

There is absolutely nothing wrong with paying for serious journalism in a way that has the same integrity as serious journalism itself.”

Unlike VOSD, the Tribune’s events–they host one every week–are open to the public, not just its members, to maximize exposure and opportunity, and because many of the Tribune’s members first encounter the newspaper through its events. The Tribune also keeps a strict separation of church and state by recognizing sponsors but keeping them on the sidelines. According to Smith, it’s a matter of respecting why the Tribune’s audience comes in the first place–namely, for the issues, and not for a flak from Wal-Mart.

And yet, as Smith himself admitted, he is not afraid of revenue. He reminded his colleagues that they too are in the business of news. 

“This idea that business is bad is … bad. We have to repel it,” Smith said. He encouraged editorial and business to have have open conversations with each other about how to protect and grow their business without “violating” the integrity of what they do. “There is absolutely nothing wrong with paying for serious journalism in a way that has the same integrity as serious journalism itself,” he said.

As if to prove it, Smith said the Tribune had already netted $1.468 million in events alone this year, and it has three more months to go.

 

How to beat ad blockers

The third model of the night was that of Quartz, where, according to Robins, user experience and quality lie at the heart of the publisher’s successful ad campaigns, all of which are custom made for its clients. She called Quartz’s approach “high-touch,” and said her biggest nightmare would be to commodify it in favor of getting a high volume of low CPMs. Robins referenced a newly published piece by Bloomberg Business on fraud in programmatic, called “How Much of Your Audience is Fake?” as an example of the “huge cost of cheap advertising” and a counterpoint to Quartz’s approach. The future, she said, is about discoverable content, not interruptive content, and respecting the space of the user. The response on social media has been overwhelmingly positive.

And yet unlike the other models, Quartz’s “high-touch” approach to ads is harder to pull off for local, cash-strapped newspapers. One reporter raised his hand: He was based in Taiwan, on the editorial side of things. Would he have to move to New York? How should he get started? It all seemed overwhelming. Robbins smiled and suggested he get a team of four people with video expertise, a couple of salespeople, and set up shop in his most transactional market, where most of his users are reading and watching. And yet she didn’t oversimplify his task. “I wouldn’t recommend that ads be your only model,” she said, tipping her hat to Brown and Smith. Everyone agreed: A diversity of revenue streams was the best way forward.

*Correction: The original version of this sentence incorrectly described web traffic for Voice of San Diego. The site had 1.3 million unique visitors last year, not every month.

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Damaris Colhoun is CJR’s digital correspondent covering the media business. A reporter at large in New York, Colhoun has also written for The Believer, The New York Times, The Guardian, and Atlas Obscura. Find her on Twitter @damarisdeere.