We have seen a mix of traditional and innovative approaches to sustainable revenue. Nearly half of the founding publishers in our study launched their operations by self-funding all or part of their initial costs. Five publishers had the help of foundation grants; four others were parented by think tanks or given support from a local news outlet, generally in the form of office space and goods in kind. Those who relied on foundation support voiced a need to shift away from grant dependency. In a two-year business plan migration, InsideClimate News plans to move from a heavily foundation-subsidized model to a diversified revenue stream that includes corporate sponsorships and an individual donor network. Elizabeth Green at Education News Network (Chalkbeat) hopes for a similar migration, with foundation support acting as the kickstarter toward sustainable revenue. She explained the dynamic: We think that the best way to get the startup capital to do this is from philanthropy. But over time, we really believe that we can grow substantially on [our] earned revenue. There’s actually effectively an industry around educational change. So, there’s actually quite a lot of opportunity for earned revenue as well as philanthropy, philanthropic investment.
Traditional Advertising vs. Sponsorship Many respondents felt that their baseline traffic volume was insufficient to generate a meaningful revenue stream from traditional advertising. The alternative approach of direct sponsorship seems more financially feasible; single-subject publishers can deliver a targeted audience of key influencers within their niche and leverage a rising trend of content marketing within the advertising realm. But that approach raises an ethical question that publishers within our study have yet to resolve: how to build a direct sponsorship model that does not create a conflict of interest. The wrong sponsor or the perception of an overly cozy relationship risks polluting the brand and its perception of neutrality. For that reason the founders of StartUp Beat and FactCheck.org have ruled out sponsored content completely. All of these things that we do to maintain our integrity…kind of put a crimp in the business model,” said Eugene Kiely, Director of FactCheck.org, which does not take sponsorship and discloses all donations above $1,000. News Outlets Experimenting with Live Events A number of respondents said they are considering or currently engaging live events as an alternate revenue stream. TechPresident was founded with a legacy of live events run by its parent entity, the Personal Democracy Forum. Co-Founder Micah Sifry sees events as a way to build on the particular advantage of single-subject websites that serve “a community convening role.” Archinect’s original revenue model leaned heavily on live events. Similarly, The Urban Thinker plans to hold salons and content-driven events as part of its business model, bridging sponsors with its target audience. Kelly Virella explained how she sees a level playing field for startup publishers within that domain:
The nice thing about doing events is that we can have events that are as large as any other large magazine can have. And so, in that sense, we can compete, as long as we’re bringing together people that sponsors would want to connect with. StartUp Beat has explicitly avoided live events, concerned that event sponsorship will yield a potential conflict of interest. Others see live events as consistent with their mission, even enhancing their capacity to deliver on it. Craig Newman at Homicide Watch Chicago is considering that route, sponsoring open discussions with community and business leaders to “foster a more rapid and regular discussion” on violent crime. That was a shared view at Politic365. Founder Kristal High Taylor hosts quarterly events with elected officials to deliver on its mandate of addressing “an underrepresentation of minorities in the national conversation.” Marketplaces, Paywalls and User Donations Merchandizing and marketplace functions have taken root at some publications. Education News Network (Chalkbeat) runs a job board, fueled by the high competition for teaching talent. North Korea News sells branded merchandise on its website. StartUp Beat has considered running a marketplace for buyers and sellers within its niche community, taking a commission from sales. Some publishers see paywalls and subscription models as antithetical to their mission, contrary to the cause of spreading news and information from their chosen field. One publisher in the study has established a subscription- only service; IA Reporter produces its single-subject publication as a professional-grade product, marketed to legal professionals who want detailed reporting on cross-border arbitration. In this case, the content itself makes the economics possible, given the high-stakes commercial value in understanding and anticipating developments in the legal domain.
North Korea News runs a tiered-pricing, or “free-mium,” model: 5 free articles per month for casual users, unlimited access for $15 per month, and premium, professional-grade content for $100 per month. In the context of this publication, the high-end consumer product consists of detailed reporting on North Korean state media and senior military leaders. Chad O’Carroll said it was a tumultuous shift from running free content to landing on a sustainable subscription model. Uptake was very slow at the start…a lot of people had gotten used to this free and available service, so they were shocked when we put up the paywall. The high pricing scared a lot of people off. Now we realized that we need at least two people doing sales and screen-sharing demonstrations. It’s making a real difference [and paying for itself]. Still, he said that predictable and sustainable revenue remains elusive. It’s very difficult. It’s hand to mouth, taking each month as it comes. The outgoings are high and incoming has been so erratic. Some months there’s $10,000 coming in, other months there’s $1,000 coming in. Now we’ve got this sales effort in business-to-business calls, then we’ll be able to better plan. Efforts to syndicate content in exchange for revenue have been limited, in part because publishers have preferred the visibility and distribution value in giving away their content for free. In an alternative approach, writers at SoccerDrugs (Fussball Doping) have taken on occasional paid assignments from mainstream outlets; freelance assignments from major newspapers effectively draw on the staff’s expertise and contribute to the organization’s budget. Repackaged content in the form of e-books is in its early days as a revenue experiment, though InsideClimate News has published two e-books and expects to publish at least two more by the end of the year.
Several publishers are currently soliciting community donations, while others are considering this move. FactCheck.org, which gets the majority of its funding from foundation grants, has succeeded in raising roughly $70,000 per year in user contributions.