In an era when most news outlets can no longer rely on advertising, they have to be creative about finding revenue streams. This is the second of two posts from James Breiner on alternative ways to make money. (See the first post here.)
On of the most innovative media in this area is MiVoz (My Voice) of Chile, a chain of 16 local news websites with dozens of clients. It generates more than US $2 million a year and is driven by content generated from some 10,000 citizen reporters.
At the Sixth Iberoamerican Colloquium on Digital Journalism, MiVoz co-founder Paula Rojo broke down the revenue sources:
- 16 percent regional advertising
- 26 percent national advertising
- 21 percent community outreach consultant projects (computer training)
- 37 percent social media consultancy and training programs.
The 37 percent from media consultancy involves creating interactive media for third parties. The 21 percent of their revenue that is coming from "community outreach" involves getting sponsors to pay for training people in how to use digital media to report on their communities.
The publisher and co-founder, Jorge Dominguez, began his career as a social activist for organizations such as "Wake up, Chile" (Atina Chile). On a visit to South Korea in 2003, he learned about the citizen journalism site OhMyNews, which had a global reach and some 200,000 contributors. The model inspired him to start Mi Voz, using citizen contributors to provide hyperlocal news.
LaSillaVacia, mentioned above under memberships, is also using this technique by offering consulting on how to launch a sustainable digital news operation.
Publisher Juanita Leon and Creative Editor Olga Lucia Lozano had originally tried doing something similar to MiVoz. They decided, however, that doing consulting for brands distracted them too much from their mission of covering politics and power.
Now they travel and give seminars on how to do a media startup and they sell a book based on their startup lessons for about US $10. They know what they are talking about. They have survived for five years. The seminars and book generate revenue and fit with their mission of encouraging independent media voices.
Direct sale of products
Many web publishers are realizing that they can offer products themselves rather than just being an advertising vehicle. For websites focused on local news, local artisanal products would seem like a natural.
El Faro, an investigative journalism website in El Salvador, has produced several books based on its investigations, and it offers them for sale on its website, along with other books, music, and artistic products.
Vox Media's community for sports fanatics, SBNation, offers ticket sales and exchange services.
The Telegraph in England has an online store that sells almost anything you would find in a department store: clothing, household products, gardening, jewelry, etc.
A website about the business of fashion in Spain, Modaes.es, maintains an online store that offers printed research, back issues and event programs for US $14 to US $50.
Online payment services such as PayPal, Google Wallet, and Amazon can simplify the process of accepting payment by credit card.
Even though the community you build is online, its members still crave face-to-face contact. People want to connect and meet others who share the same interests and values. Sponsors who share those values and want to connect with that community are willing to pay for the right to be visible at such events.
When the events are aligned with the mission of your publication, they help reinforce your brand as a leader in the community.
At a minimum, you could hold brand-building events with a goal of just breaking even. Invite your online community to a happy hour or coffee, get the bar or cafe to offer discounted drinks or free food, and use the event to get close to your readers.
You can keep costs down by trading for some of the food and venue costs.
The nonprofit Texas Tribune is a great example of event marketing. It generated $1.2 million in 2013 from events and conferences.
There are at least four ways to make money from events:
- booths (display)
- product sales (publications, subscriptions, branded merchandise)
As publisher of the Baltimore Business Journal, I found many clients preferred a relationship with a trusted, credible brand rather than simply buying advertising space, and they were willing to pay a premium for it.
Businesses that wanted to become part of the community paid $5,000 to $25,000 to sponsor a single event such as Best Places to Work, Women Business Leaders, or 40 Under 40, an event honoring up-and-coming business people.
Sponsors received a banner and recognition in the printed program as well as mention in advertisements for the event. Ticket sales generated revenue. At some events we sold display booths or tables. Profit margins can be high if you keep costs down.
This post is an excerpt from the original which appeared on the blog News Entrepreneurs. It is published on IJNet with the author's permission.
James Breiner is a consultant in online journalism and leadership. He is a former co-director of the Global Business Journalism Program at Tsinghua University and a former ICFJ Knight International Journalism Fellow who launched and directed the Center for Digital Journalism at the University of Guadalajara. He is bilingual in Spanish and English. You can follow him on Twitter here.
Image CC-licensed on Flickr via Graham Holliday