Tow-Knight Center

Tow-Knight-Startups-400Two-thirds of new local online news sites make $100,000 or less a year, with more than half generating $50,000 or less, according to a survey released Monday of 94 sites nationwide.

Eighty publishers representing 94 sites responded to a survey by Michele’s List, a database produced with the Tow-Knight Center of Entrepreneurial Journalism at the City University of New York Graduate School of Journalism.

In sum, the reality seems pretty straightforward: most are generating more revenue than they have been previously but are "quite small both in revenue and reach and remain highly dependent on local display advertising."

The survey of a rising but fragile media niche was conducted between Feb. 28 and April 29.

"Often founded by journalists who have no business or sales experience, these ventures struggle to develop revenue and establish a stable business."

The preamble to the results underscores how "most of the sites are tiny and they are potentially vulnerable because they rely heavily on a single revenue source---advertising" while also depending heavily on volunteers for content.

The responding sites are in 26 states, with the most in New Jersey (13) and Massachusetts (10). Among the conclusions:

  • Just 9 percent earn $500,000 or more. Meanwhile, about 70 percent said they generated more revenue last year than in 2013.
  • More recently established sites (five years or younger) report significantly less revenue than older ones. Nearly 80 percent of those established in the past five years indicate their total revenue is $50,000 or less.
  • Their advertising offerings are rather narrow. Nearly 30 percent said they sell only traditional web display advertising.
  • Slightly more than 36 percent indicated they have full-time paid staff as content contributors. The rest rely on freelance or part-time paid staff. On the business-marketing end, 46 percent indicated they have full-time aid staff.
  • Other conclusions include the very limited reach of most sites, with a third having fewer than 50,000 unique visitors each month, with just two reporting 500,000 or more uniques a month.

Of those who responded, 81 percent of the sites are for-profit. And unlike in previous years of the survey, "when organizations reported long delays in getting nonprofit status from the IRS, no one said they were awaiting that status in this survey."

The survey was both interesting and a reminder of overarching realities for one veteran of the online local news universe.

"The experience of small news sites is the same as bigger ones: Getting eyeballs on new news brand is hard," says Mike Fourcher, founder of Chicago’s, a local political intelligence service.

After seeing the report, the hyperlocal news veteran said, "Living off of advertising is harder. Trying to do both of those things in a saturated marketplace is next to impossible."