Business Journalism

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Parse.ly kicks its digital analytics toolkit up a gear

Parse.ly, one of the major players in the growing business of sophisticated measurement of digital audiences, is out with a new suite of services this morning.

“The conversation around what success means and how we measure it” continues to develop, CEO Sachin Kamdar told me in a phone interview. Eleven new Parse.ly metrics, like “breakout of traffic recirculation” aim to give publishers a range of tools they can match with differing objectives, he said.

The Parse.ly rollout is way more advanced than the general overview of analytics trends I provided in a post earlier this month — but consistent with it.

The concept, according to the company, is to unify insights on growth (as still measured by uniques and page views), engagement (as typically demonstrated by time spent) and the newer concern with loyalty (described by several as “time well spent” in my earlier piece).

In an essay on Medium January 9, responding to an earlier post by Medium and Twitter founder Evan Williams, Kamdar commented:

Just as we’ve heard an almost exhausting amount about “engagement” in 2014, I expect we’ll start to hear much more about actual value in the coming year. The VCs (venture capitalists) and meta-media are starting to look for blood in the water, and businesses won’t be able to defend a strategy that only has high engagement metrics to show for its troubles.

Kamdar told me the new service, already tested in beta with top clients, will supplant rather than supplement Parse.ly’s existing offerings within a matter of weeks.  Publishers will have flexibility in which features they order so the service could end up more or less expensive than its predecessor.

In a demo, Kamdar showed a sample breakout that would show reporter performance  over several weeks as measured by uniques and time spent per story.  One reporter might be bringing in more traffic, another engaging greater attention of the audience.

The company’s release describes multiple goals:

Beyond precise measurement of views, visitors, shares and time, the platform now includes breakouts of on-page attention, mobile devices and visitor retention. Publishers can use this data to identify high-quality long-form content, engaging images/videos, new traffic sources for distribution and audience interest segments that lead to loyalty.

Digital publishers use Parse.ly data throughout their organization, including: editorial teams that use Parse.ly’s reporting suite as a basis for weekly meetings with reporters; developers that create products to encourage on-site recirculation; analysts that use it to identify evergreen content; or, sales teams that create sponsored content reports for native advertising clients.

The release includes an endorsement from Conde Nast, among the most prominent of a client group including Fox News, Advance Digital, Reuters and Upworthy.  Coincidentally, Conde Nast, earlier this week, announced expansion of its native advertising/sponsored content efforts with editorial writers producing some of the pieces and expanded video capacity.

For a publisher focused on sponsored content, Kamdar told me, the metrics would let a publisher show a client how a campaign did over a period of weeks, which pieces performed best — and thus allow for adjustments and improvements.  His demo included such a dashboard for a Microsoft 3 series of sponsored content ads in November.

I’m not enough of a user of analytics to assess the merits of Parse.ly’s offering compared to those of competitors like Chartbeat or Google Analytics.  My editor Seth Liss uses all three and finds them helpful in different ways — so it is not necessarily an either-or decision for digital publishers.

Kamdar facetiously described Parse.ly as “an older company” among startups.  It was founded in 2009 as a news reader that could link a user to deeper content on a given subject.  But it morphed by 2012 into an emphasis on analytics. “The software (of the time) was not really built for publishers,” Kamdar said.  “They might be trying to adapt an Excel report for data that was really important to managing the business,” he said, and the tools were not well-matched to getting audience feedback.

The main purpose of the expanded service is to measure audience in more ways and finer detail, but Kamdar said there are various applications to other business challenges as well. “The ad industry is not going to change (from raw measures of traffic) as quickly as we might wish…,” he said, “but that’s not the only way to make money.”  The metrics could be applied to paid subscription strategies or pitching sponsored events to target audience segments, Kamdar added.

While trends start and stop unexpectedly, I would be very surprised if the interest in improved metrics (and the business opportunity) went anywhere but up over the course of the year. Read more

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Gannett

Corporate raider Carl Icahn sets his sights on Gannett

Gannett has yet to complete the split of the company in two, spinning off publishing from television and digital, but the prospect already has a famous corporate shark nibbling.

Carl Icahn, who controls 6.6 percent of Gannett stock asked in a letter Wednesday for two seats on the board.

He also expressed particular concern that each of the new companies be open to takeover bids and not adopt any of the defenses management can use to fend off unwelcome offers.

His letter to Gannett CEO Gracia Martore charges that the capital structure and plans for the publishing unit have been badly communicated to the market, resulting in an 8 percent decline in Gannett stock since plans to divide the company were announced in August.

Icahn further wrote:

We have spoken with many large Gannett shareholders since we first announced our position. Everyone seemed please by the company’s spin-off announcement, but many expressed dissatisfaction with the company’s governance profile and poor communication with the market.  We believe that many of these shareholders will be supportive of our proposals and our director nominees…

That claim indirectly addresses an important point.  A 6.6 percent share does not give Icahn much leverage to make demands on the company.  But if he can bring along other large institutional investors, his chances of success would increase.

According to Gannett’s latest filing (as reported by Yahoo Finance) the top 10 institutional investors control more than 40 percent of Gannett stock.  But top of the list is Vanguard, which most likely includes the stock in the huge portfolio of retirement funds it manages and has no beef with how the company is run.

Gannett responded first thing this morning with both a press release and a letter to employees.  Marge Magner, non-executive chair of the Gannett board, characterized Icahn’s maneuvers “as an overreaching campaign to advance his own agenda,” not necessarily in the interests of the rest of shareholders.

Martore’s letter to employees warned of more accusations to come:

We don’t know how Mr. Icahn will conduct himself, there is likely to be press coverage of his comments about Gannett in the weeks and months ahead. I urge you not to be distracted by whatever he chooses to say about our company. Gannett is in a very strong position, and the best thing we can all do is to stay focused on our business and our day-to-day responsibilities.

Shareholder activists have a mixed record in influencing board-level decisions at media companies.  When three longtime holders of large stakes in Knight Ridder lost confidence in management in 2006, they forced a sale even though they controlled less than a majority of shares.

Two speculative investors assembled more than 20 percent of New York Times Co. shares and tried to put the company in play, but they were rebuffed.

However, the Times had the protection of family control of the majority of voting shares.  Gannett does not.

Icahn also has the option of acquiring a larger stake if he feels his effort is gaining momentum.

He can be counted on to be persistent.  His most recent campaign was to persuade e-bay to spin off PayPal as a separate company.  E-bay directors resisted for nine months but agreed to the move in September (to be completed later this year).  Icahn’s share in the company was less than 1 percent when he began demanding changes.

Gannett stock was up 2.25 percent for the day at the close of trading.  But that should not be read as market excitement about Icahn’s move.  It was a strong day for the market  generally, and shares of the New York Times Co and McClatchy were up by a much larger percentage.

 

 

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Reuters loses Tribune but is not quitting yet

General view of a Reuters building at Canary Wharf in London, Tuesday, May 15, 2007. (AP Photo/Sang Tan)

General view of a Reuters building at Canary Wharf in London, Tuesday, May 15, 2007. (AP Photo/Sang Tan)

Reuters attempts to build a competitive wire service to the Associated Press suffered a major setback over the holidays when the Chicago Tribune and six sister papers ended a two-year relationship and switched back to the AP.

That was a double sting. Besides being Reuters’ biggest and most prominent client, Chicago Tribune editor Gerould Kern had spent several years helping build out the substitute service before it formally launched (as I recounted in a detailed story last summer),

But Steven Schwartz, global managing director of the Reuters news agency, told me in an e-mail interview that he is not throwing in the towel. He wrote:

We are grateful for all of the Tribune’s insight and input in the early days to help make the Reuters America service exceptionally strong and we expect they will be back as a customer sometime down the road.

Schwartz added that Reuters recently signed its 50th U.S. customer for the service and that 40 of those are daily newspapers.

Those numbers, however, indicate that Reuters has a long hill to climb to challenge AP, which claims 1,400 newspapers clients (also owners of the non-profit cooperative). So two years in, Reuters has less than a 3 percent market share.

The change, first reported by Jim Romenesko, has been confirmed but not formally announced to readers of the seven newspapers as final deal points are being settled. Chicago-based Romenesko noted a January 2 story in the Tribune with an AP credit line.

None of the parties is offering an explanation of the change.  Tribune Publishing corporate provided this anodyne comment:

The AP delivers premium content that our readers across all platforms expect. We made our recent news service choice based on a number of key criteria, including: meeting our readers’ content expectations, achieving the balance of cost and value, and a desire to secure one primary news service for all Tribune Publishing business units.

(The Los Angeles Times had stayed with AP when the seven other Tribune papers switched to Reuters at the beginning of 2013).

The reversal roughly coincides with Tribune Publishing’s spinoff as a separate company from Tribune’s TV and digital businesses.  It is probably a fair assumption that the reconsideration came from new corporate leadership.  Kern, while avoiding any criticism of AP, had told me in July that he and other editors were satisfied with Reuters.

AP is heavily invested in sports and election coverage, so another factor may have been that the 2014 mid-terms highlighted its strengths compared to more rudimentary Reuters coverage.

Reuters main attraction to potential clients is much lower prices at a time when regional newspapers continue to look for ways to control expenses. Most devote much less effort and space to national and international news than they used to.

But AP has countered with improvements to its state reports (which Reuters does not try to duplicate) and more flexibility in levels of service and prices offered.

Huff Post founder Arianna Huffington told staff in a year-end memo that she plans to drop AP when the contract expires at the end of 2015.  But that leaves the service a year to negotiate and many who give notice decide to stay in the end.

Reuters has some history of starting, stopping and reorganizing initiatives. It is planning a customizable Live TV video service in 2015, and I asked Schwartz whether that project might divert attention and resources from the national wire.  He said not:

Reuters America is but one of the many initiatives we have launched around the world in recent years as we continue to innovate and adapt to the changing economics of news and shifting needs of our global media customer base. Whether it is providing a market alternative as we have with Reuters America, expanding our bespoke TV programming efforts around the world or investing in state of the art multimedia news delivery Reuters will continue to innovate and help its media customers engage their audiences wherever and whenever news breaks.

While I don’t doubt Schwartz’s commitment, priorities change, and Reuters’ national wire probably needs to pick up momentum quickly to be a survivor.  Clayton Christensen notwithstanding, disruptive, “good enough” challengers do not always prevail.  This could be a faceoff in which Goliath AP proves the winner.

 

 

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Advance claims digital ad growth will outpace print declines in 2015

Advance Publications’ much debated five-year-old strategy of discontinuing some days of daily print editions to devote added resources to digital is poised to achieve a critical crossover point in 2015: digital advertising gains will exceed print newspaper ad losses, the company claims.

In a bi-annual letter to employees today, Advance Local President Randy Siegel, writes:

Our local sales and marketing teams have leveraged their entrepreneurial abilities and expansive digital knowledge to prove they can grow digital ad revenue faster than we’re losing print ad revenue.  In 2015, our local leadership teams plan to generate higher total ad revenue in every one of our markets, reversing a longstanding trend of decline.

I asked Siegel by e-mail whether he was including national advertising in that calculation, and he said yes.  That would make for an even more noteworthy achievement since regional newspapers have typically been suffering deep losses in print national, in the range of 15 to 20 percent for the last several years.

The better digital sales and 2015 prospects mirror digital audience growth, said Siegel.  The Advance Local sites have averaged 55 percent traffic gains year-to-year as measured by comScore, he wrote. Two of the more recent conversions to the company’s digital emphasis — Cleveland.com and SILive.com (Staten Island) — more than doubled their audiences year-to-year in November, he added.

Since Advance is privately-held by the Newhouse family, it does not disclose revenue and earnings figures in dollars, as is required of publicly-traded counterparts like Gannett or The New York Times Co.  Generally the industry has been reporting progress year-to-year in plugging print ad shortfalls with digital ad growth, higher circulation revenues and other revenue streams like digital marketing services or events.

However based on results through three quarters, 2014 is expected to show total revenue at most companies and the entire industry down again — a significant negative to investors even at companies with a strong story of operating profit margins and innovation.

Other newspaper/digital companies may also be able to achieve revenue growth in 2015, though to my knowledge, Advance is first to make that promise.

There’s an important qualifier.  Siegel’s letter makes no mention of circulation revenue.  Advance’s main websites are all free — hence no digital subscriptions or print + digital revenue gains.

And with the lesser frequency of publication (or in some markets cuts in home delivery days), Advance doesn’t have the same leverage for print or bundled subscription price increases as most of the rest of the industry.  So it did not benefit from the successive 5 percent industry increases in circulation revenue recorded in 2012 and 2013 (2014 totals are not yet available).

On the other hand, Advance has been clear about its strategic goals since it began revamping and emphasizing websites while reducing print at Ann Arbor and other Michigan properties in 2009.  The bet was that digital ad revenues could grow from a small base, and that print declines were irreversible.

Advance has been proven right on both points.  And in theory, it now has leaner operations well-positioned for growth into the future. More expense cuts are coming, Siegel’s letter says:

It’s clear we’re on the right path to building sustainable, thriving media organizations. But this journey will take a little longer and be a little harder than we originally anticipated, which is why we continue to need to recalibrate our expenses

Read the full Siegel letter

The Advance way provoked a wave of protests from journalists and local readers when It cut frequency of the New Orleans Times Picayune and made NOLA.com its lead news product.  The Advocate, based in Baton-Rouge has launched a daily New Orleans edition, and an old-fashioned  newspaper war is in progress — with fresh shots being fired as the New Year begins.

The changes have now been introduced in all of Advance’s 25 markets.  None drew the same level of resistance as in New Orleans, but journalists and some citizens in Cleveland and Portland have complained of mass dismissals of print veterans with a few hired back and others replaced by younger staffers on the expanded websites.

NOLA.com and the others Advance sites post frequent news updates in a blog-like format through the day, rarely holding stories for the print paper.

Few companies have followed Advance’s lead to date, but many industry analysts think print frequency cutbacks may be coming, especially if the strategy is a demonstrable financial success Read more

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Capital flows like water to media companies (of a certain kind)

December has started with a bang-up ten days financially for some leading American media companies.

Vox announced it has raised another $46.5 million in a new round of venture capital bringing its total valuation to $385 million. CEO Jim Bankoff, in a internal memo he made public, announced ambitious expansion plans for 2015.

Outbrain, a content recommendation/native advertising company, indicated it is tentatively planing an initial public offering early next year, with a target valuation of $1 billion.  (Outbrain, like its biggest competitor Taboola, is Israeli in origin but has moved headquarters to New York and plans to be listed on NASDAQ).

Meanwhile expanding Buzzfeed’s growth continues and its investor valuation stands at $850 million.  Editor Ben Smith was lecturing in Australia late last week as the site announced it has hired a star from Wired to be its Silicon Valley bureau chief and is forming a health and science desk.

Shane Smith, founder and CEO of VICE. (John Minchillo/AP Images for PromaxBDA)

Shane Smith, founder and CEO of VICE. (John Minchillo/AP Images for PromaxBDA)

And in case you missed it, Vice attracted nearly $500 million in new venture capital funding in September and now is valued at $2.5 billion. Founder and CEO Shane Smith confirmed that he  wants to try again to buy and repurpose the broken-down HLN franchise from CNN/Time Warner. (CNN chief Jeff Zucker said HLN was not for sale — especially to Smith.

Vice also got a kiss of legitimacy December 1 when the Knight Foundation awarded it an Innovation Prize and partnered with the site and CUNY to create a $500,000 initiative to foster innovative story-telling internationally.

I could go on, but you get the drift.

None of these companies have the asset — or is it a liability — of a legacy operation.  Likewise Outbrain has come from nowhere to being a major player in the sponsored content boom in part because it has no need to modernize a traditional ad agency structure.

The capital markets’ infatuation with these newcomers takes place as tough times for legacy companies just keep on coming. The New York Times did a buyout deal  last week with 60-plus news staffers and will add some layoffs to reach a staff reduction goal of 100.  The same has been happening over the last few months at Poynter’s Tampa Bay Times.

A reporter for the Sacramento Business Journal called me recently asking whether McClatchy can survive as a family-controlled public company.  I think so — but it’s not an unreasonable question.

Venture capital valuations are somewhat different than the market capitalization of an existing public company.  When and if a VC-backed company goes public, it may or may not be worth as much as its investors hope.

With that qualifier, check out how the market capitalizations of some familiar legacy companies (as calculated by Yahoo Finance) compare to the figures mentioned at the top of this post:

*McClatchy — $337 million (considerably less than Vox).

*Tribune Publishing — $584 million (more than Vox, less than Buzzfeed).

*New York Times Co. — $1.93 billion (roughly twice Outbrain but not as big as Vice).

*Time Inc. — $2.55 billion (for now still a little more than Vice).

These numbers speak for themselves in terms of what investors favor in the media space. They also confirm the truism that short term revenue growth prospects matter much more to those placing bets with their capital than longevity or even profitability.

I would add two more short bits of commentary:

*Capitalism’s “creative destruction” dynamic works in part by accelerating the growth of promising new ventures while pulling investments out of fading older ones.  So you could say the money folks, as 2014 rolls to 2015, need no persuading that media transformation is in full gear.

*A small saving grace for newspaper companies as an investment is that a balanced portfolio (appealing also to many individual investors) includes profitable companies that pay a good dividend, even if share price may not move up quickly.  That’s the premise for the relaunch of GateHouse Media as New Media Investment Group, paying out about 5 percent on its current share price, and a likely strategy for other spinoff companies being formed like Gannett Publishing and Scripps’s Journal Media Group.

Unfortunately, as anyone from the boardroom to the back corner of the newsroom knows, it is not so easy to earn enough profits to pay a dividend while also making the needed big investments in new digital news products.  And the industry still has on its to-do list for next year (pardon if I’m repeating myself) achieving net revenue growth. Read more

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Magnifying glass on laptop

Why it’s time to stop romanticizing & begin measuring investigative journalism’s impact

Charles Lewis, one of the luminaries of nonprofit investigative journalism, sees a culture clash brewing as the sector continues to grow, covering what shrinking legacy media may miss and, more recently, innovating with powerful reporting techniques.

On the one hand, foundations big and small want metrics that demonstrate results analogous to assessments they apply to arts projects, social service initiatives and advocacy work.

On the other hand, Lewis wrote in a white paper last month, “veteran editors and reporters, particularly of the investigative ilk, have an inherent, almost visceral dislike of audience measurement and engagement strategies.” Instead they see themselves “as intrepid hunter-gatherers of information” who overcome a host of obstacles to produce important, even heroic, journalism.

The conflict might be academic were it not for the current state of play in nonprofit funding. Established nonprofit news sites need second and third rounds of support from foundations, and startups find foundations “feeling a bit overwhelmed and besieged by proliferating prospective grantees,” Lewis wrote.

In an e-mail interview, Lewis added, “Subjectivity is a serious occupational hazard for any grantor attempting to measure impact…Some foundations seem to be somewhat obsessed with these questions and issues, and others, not so much (especially smaller foundations with very few staff)”  But he expects the level of scrutiny to keep rising.

The white paper, which Lewis co-wrote with Hilary Niles, assesses the problems of measuring impact journalism and proposes the starting outlines of best practices. Written for the Investigative Reporting Workshop at American University, and underwritten by the McCormick Foundation, the paper is a lengthy but worthwhile read.  Caroline O’Donovan did an excellent job summarizing it in this Nieman Lab piece.

I’m not going to try to cover the entire scope, but here are a few themes:

Difficulties: If impact and outcomes are the true markers of an effective investigation, quantitative indicators of quality are likely to miss the mark. “Targeted reach” to decision makers may be more important than broad readership numbers. Sometimes remedial action on the problem spotlighted takes years rather than months. The investigative reporting process is more time-consuming and open-ended than advocacy work, which often assumes a desired outcome and marshals evidence to make the case.

Proxies: Audience is at least a starting point, with the qualifier that fluff may outdraw substance. Lewis and Niles recommend engagement as a more sophisticated measure of reach. Mentions, links and conversations are particularly susceptible to measurement in the digital space — and can indicate that the work in question didn’t fall with a thud in an empty forest.

Models: The authors point to several pilot projects with titles like “The Center for What Works” and “Spreading the Zing” that tackle the challenge of measuring social outcomes. Perhaps, Lewis and Niles argue, some of the framework and classification of desirable outcomes can be adapted by individual projects trying to make their case rather than reinvented from scratch.

Best practices: Lewis and Niles suggest that the Wisconsin Center for Investigative Journalism is well-along in documenting the “ripple effect” of its best work. As explained by the center’s Lauren Hasler in a 10-minute video, this consists of investing time and a little money into capturing data on the spread of a story and creating a narrative with evidence of what the investigation accomplished.

The authors give passing reference to what I think is a potential ace in the hole for the nonprofits: crowd-sourcing and crowd-funding. Though they yield input rather than outcome measures, both are direct evidence of an engaged audience, willing to contribute money for investigative work or do some of it for free. Crowd-sourcing and crowd-funding fit the digital era and the non-commercial idealism of nonprofit news organizations.

Also, while Lewis and Niles are focused on the nonprofit sector, I am curious whether the assessment challenge should be applied to investigative efforts at newspapers and other legacy media as well.

Some top metro papers like those in Seattle, Milwaukee and Tampa Bay determined several years ago that even as newsroom cuts become a necessity, investigative capacity should be maintained or even expanded. When Gannett was doing research as it introduced paywalls at its 80 community papers last year, it found that investigations were the top of list of “passion topics” readers were willing to pay for.

Impact gets identified and celebrated in the Pulitzers and other contests, but I am not so sure there is a reliable way to assess the volume and quality of the investigative work, if any, that your hometown paper still provides.

Not every published investigation is a gem. We have all been asked to read lengthy pieces that reflect efforts but did not come up with all that much. Also, there is a genre that rides along with law enforcement or government auditing work, creating an impression of impact but a bogus one. And my antennae are up for financial exposes that sometimes ignore basics of risk and fiduciary obligation.

Having done some, directed some and read several Russian novels worth of investigative projects, I think there is a common, sweet-spot design to the best of them. You need to identify and document a problem of some consequence (bigger than the typical TV I-team effort to help a guy get some shoddy construction fixed).

The problem should do more than leave the reader shaking his head and saying that’s unfortunate; it should be actionable. Good investigations mobilize a level of citizen awareness and often indignation. Then something happens as a result. That something can be governmental or non-governmental or both.

For instance, the recent Tampa Bay Times/Center for Investigative Reporting project identifying America’s Worst Charities is likely to result in tougher regulations in a number of states. But it should also motivate prospective donors to do a little due diligence on where the money goes before responding to a heart-tugging appeal.

Lewis said in the e-mail interview that newspapers are 50 years into evaluating the impact of investigative reporting, particularly when it changes “public laws or policies.” His framework might be less interesting to them except for “the intriguing issue” of collaborations between profits and non-profits like his joint creation of an investigative unit for the Washington Post with a Ford Foundation grant.  If those collaborative efforts grow, the for-profits will be pulled into the assessment discussion, he said.

The big impact of spectacular projects like the Boston Globe’s investigation into pedophile priests or The Washington Post’s investigation into shameful conditions at Walter Reed Hospital are self-evident. But a more modest everyday level of holding governments and other powerful institutions accountable is equally essential.

Lewis is a serial entrepreneur in launching investigative units and support organizations and some years ago won a MacArthur Foundation “genius” grant for his work. I think he is onto something again. Fleshing out the embryonic conversation about what works and why it matters is going to be essential to keep the resources to support investigative reporting flowing. Read more

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sustainability

How to navigate the challenges of sustaining a startup news site

It seemed like an opportunity too good to pass up, a chance for a young online startup to pounce on a news niche that has proven popular across the country but was virtually abandoned by one city’s legacy media.

All across the United States, community newspapers and local websites alike seek readers by covering high school sports. In theory that makes a lot of sense, partly because it’s not just the players who want to read about their games, but parents and friends as well. And in many areas without a professional sports franchise, even people without a connection to the schools avidly follow local teams.

But in San Francisco, three-year-old online startup San Fran Preps recently shut down after finding local sports to be popular but too economically difficult to cover there.

What went wrong? What are other news organizations doing that makes them sustainable when other outfits fail?

The way things were supposed to go

Jeremy Balan/Photo by Tom Prete

Three years ago, Jeremy Balan looked at San Francisco’s prep sports scene and realized it was an open field.

The San Francisco Examiner and the San Francisco Chronicle both once covered local sports, but that was many years ago. The modern-day Examiner’s sports coverage consists largely of wire copy and columns, with maybe a brief freelance piece if a local team made it to the playoffs. The Chronicle has a blog about high school sports, but it covers a broad geographical area and San Francisco stories are few. And there weren’t any blogs or online news outlets of note picking up the slack.

It was during a citywide high-school football semifinal game that Balan first noticed how empty the San Francisco prep sports niche really was. While at the game as an Examiner freelancer, Balan said in an interview with Poynter that he realized he was the only person covering it.

A student wrapping up his journalism degree at San Francisco State University, Balan thought he had hit on a great opportunity. If he could pull it off, he’d be able to put his journalism training to work covering sports he loved, and make a sufficiently decent living that he could afford to stay in San Francisco.

He needed money to do it, but Balan said he knew he was no ad salesman. He wanted to concentrate on the content, not sell ads or go to potential donors asking for money to support a product he hadn’t yet built. So he concentrated on covering games, building a crew of writers and photographers, and going beyond the fields and courts to report on larger issues affecting schools and athletes.

Balan said that in 2011, he began the process of incorporating San Fran Preps as a nonprofit organization and raised about $60,000, primarily from a handful of large donors including some parents of student athletes.

It was enough to pay his freelancers, and to pay himself for running the operation. And San Fran Preps was turning into a popular source for serious local sports news, with stories often generating dozens of comments from readers.

“It never was a blog,” Balan said. “It was like a local daily newspaper covering prep sports.”

Things were looking up.

What went wrong

Balan’s fundraising for the newly incorporated nonprofit San Fran Preps was enough to keep the site operating and growing for a year. His plan was to look for grants from major journalism organizations to supplement that funding, and to guard against a drop in donations.

But his applications to grantmakers didn’t get any traction. Equally as bad, local donations fell. By early 2013, it was clear that there wouldn’t be enough money coming in for Balan to keep operating San Fran Preps, and in February he pulled the plug and now plans to move back to Southern California.

When Balan talks about why things didn’t work out, frustration bubbles up in his voice: frustration with an environment in which people have become used to free content, and even publications that know how much it costs to produce quality news aren’t paying enough to actually do it.

“Everybody likes the ideas,” Balan said. “Everybody wants it for a freelance fee.”

But when Balan acknowledges that the challenge also was bigger than he thought it would be, he sounds more weary than frustrated.

“I could have tried harder. I didn’t hustle for the money (over the past year),” he said. “I did two full years of hustling to keep the website alive. I just wanted to be a reporter.”

What’s working for others

San Fran Preps had a niche with little competition, a passionate founder and official nonprofit status (which can sometimes be difficult to get). Many potential founders of independent online news organizations perceive the nonprofit route as the best path to sustainability. But is it?

Scott Lewis, chief executive officer of the nonprofit Voice of San Diego, has no doubt that it is. The reason comes down to a diversity of funding sources open to nonprofits.

“You need myriad sources of revenue,” Lewis said. “What we call ‘revenue promiscuity’ in our little world.”

The Voice of San Diego’s nonprofit operation is built on a membership model, but Lewis said the Voice also gets funding from foundations, corporate sponsorships, benefit events and a partnership with the local NBC affiliate.

The Tucson Sentinel‘s support comes from a different blend of sources, mostly local business sponsors with a handful of events and virtually no foundation grants. Editor and publisher Dylan Smith, who’s also chairman of the Local Independent Online News Publishers trade group, says the Sentinel’s nonprofit status frees the organization from having to deliver big returns for investors.

That doesn’t mean local online news publishers can’t pay the bills with their publications, though.

“The reason we went as a nonprofit is we figured nobody’s going to get rich running a local website any time soon,” Smith said. “We did think there would be a decent living in it.”

Still, some for-profit online news publishers believe the nonprofit structure brings too many hoops to jump through and requires publishers to focus on a mission that’s just too confining.

“A nonprofit has to have a really narrow mission in most cases,” said Tracy Record, editor and co-publisher of the long-running West Seattle Blog.

Record says that in her view, nonprofit funders like to support work in particular subjects that might not fit with the needs or interests of a local publication’s readers.

“Maybe that’s a great topic area, but that’s maybe not where your goal was,” she told me.

Beyond the matter of methodology is the question of whether some sites start out with the cards stacked against them, regardless of how they’re structured.

In the case of San Fran Preps, both Smith and Record question whether the level of community enthusiasm for local sports found in many smaller towns is present in a city such as San Francisco.

“The first thing I would say to anybody [starting a local news organization] is be sure you’re solving a problem or filling a need,” Record said.

Lessons learned

Record, Smith and Lewis have different views about what makes a sustainable online news organization. Here’s their advice for startups searching for sustainability.

Record

  • Make sure your publication fills a gap that’s important to other people, not just something that interests you.
  • When applying for funding from national grantmaking organizations, don’t just ask them to pay for local news. Show them they’ll be funding work that other publications can draw upon to improve their own coverage or operations.
  • Always operate within your means. Don’t hire people or buy things based on money you expect to raise later.

Lewis

  • Constantly promote your publication and explain its value to the community it serves.
  • It’s unlikely any publication can get by with only one kind of funding.
  • Be careful of limiting yourself when setting a fee or price for something, including subscriptions. If you ask people for a set amount, that’s all they’re likely to give you.

Smith

  • You don’t have to take a vow of poverty, but you probably won’t make a ton of money.
  • Find the structure and blend of funding sources that works for you. Grants and events may work in one place, and events and advertising in another.
  • If you think you’re going to be able to just do the journalism, think again. Solid business skills are vital. “It’s not just about writing the cool stories, it’s about keeping the books straight.”

Do you work for a startup news site? Share your advice/experience with us in the comments section.  Read more

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How Bloomberg’s photographers covered a tough year for business

Bloomberg
Photographing newsmakers can be a straightforward assignment, but photographers shooting business stories often face far more ambient instructions: Illustrate Facebook’s IPO, for instance, or Apple’s introduction of the iPhone 4s in China, all the while adhering to the tenets of photojournalism. Bloomberg’s year-end collection of its best photos include many attempts by photographers to thread that needle.

Scott Eells shot his photograph of a person under an umbrella passing by the corner of Wall and Broad streets in New York on May 9, when stocks had fallen sharply and Greece’s political troubles were threatening to drag on many country’s economies. Read more

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quartz

5 things journalists should know about Quartz, Atlantic Media’s business news startup

Agence France-Presse | The Economist | Nieman Lab | Ad Week | News ThingQuartz Tumblr
Atlantic Media is about to launch its much-buzzed-about global business news product called Quartz, as soon as this week or next.

It’s another digital news startup that gets a lot of pre-launch attention for its intention to do things differently — which makes it not only interesting but also a sort of lab experiment whose successes or failures will bear lessons for other news organizations.

Quartz is staffing up with “veterans from top media organizations around the world,” including Editor-in-Chief Kevin Delaney, Senior Editor Zach Seward from The Wall Street Journal and Global News Editor Gideon Lichfield from The Economist. Others come from backgrounds at Gawker, Huffington Post, Foreign Policy, GOOD magazine and France 24. (We wrote earlier about Atlantic Media’s hiring philosophy.)

Altogether Quartz will have a team of about 25 working mostly from the main office in New York City’s SoHo neighborhood (also home to Gawker). It will have some reporters in Washington, D.C., and Los Angeles, and plans to open offices in Europe and Asia.

Here are a handful of things worth knowing and watching as Quartz launches. Read more

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How journalists can develop business, entrepreneurial skills in the newsroom

Believe it or not, there are ways to make money in journalism. One of them is by crossing from the editorial to the business side of the industry.

While some journalists have launched their own news sites, others have found lucrative business-related opportunities within the newsroom.

Familiarizing yourself with the business side of journalism

When Evan Smith was editor-in-chief of Texas Monthly, he made it a point to learn about circulation, advertising, marketing and other business aspects of the publication. “I found it made me better at my job,” he said by phone. “It gave me a more well-rounded picture of the magazine as an entity.”

That came in handy when he co-founded The Texas Tribune and became both its editor-in-chief and CEO. “I wasn’t just another journalist who thought he could run a business,” he said. “I actually had some experience with the guts of the news business.”

Smith suggests that editors make a point of understanding what motivates colleagues in advertising and circulation, and take an active role in figuring out how to get their content in front of as many people as possible. “It does not make you less of a journalist to be more savvy about the business,” he said.

Smith says journalists interested in the business side of news should look to the Web, noting that it’s “the 21st century springboard to greatness.”

Longtime recruiter Joe Grimm, who now teaches at Michigan State University, often chats with journalists who have developed entrepreneurial skills to launch their own sites. “Journalists have opportunities every day to learn about the business operations of their companies,” he said via email. “It is smart to do this kind of reporting, even if one is not planning a move to the business side.”

Joining task forces within the newsroom

Rebecca Baldwin took advantage of business-related opportunities while working for the Tribune company. She started her journalism career as a copy editor at Florida’s now-defunct Palm Bay Post and eventually moved to the Chicago Tribune, where she edited the Arts & Entertainment and Style sections. She then began her climb to the top of the leadership ladder at Tribune Media Services’ TV news and listings site Zap2it.com.

While at the Tribune, Baldwin joined a newsroom task force aimed at revamping the legendary publication.

“That opened my eyes to what the other parts of the newspaper did,” she said over coffee in Chicago. The experience introduced her to the marketing, advertising and financial sides of the news business. It also guided her toward positions in product development and eventually to her current position as general manager and vice president of Zap2it.com. It also helped her shift her professional focus from content creation to product strategy.

Baldwin said joining the Tribune’s task force helped her make her career interests and potential clearer to the people who eventually hired her out of the newsroom. “The fact that I have the editorial background has made me the perfect solution to a lot of problems,” she said. “Being able to get inside an editorial person’s head has paid off for me time and time again.”

Moving from the newsroom to the boardroom has given her more job stability than many of her colleagues at the Tribune have enjoyed in recent years. It also has improved her work/life balance and her bottom line. “My salary and hours are much better than they were in editorial,” she said.

And it helped her get a Tribune-paid five-figure MBA from a top business school, a valuable perk she concedes is far more rare these days.

Taking advantage of opportunities in product development

Earlier this month, Forbes Media Chief Product Officer Lewis DVorkin wrote: “I often say I used to be a journalist.” He now describes himself as “a product guy.”

DVorkin’s first job was as a copy editor for the then combined AP-Dow Jones News Service. Now instead of editing copy, he focuses on shaping the Forbes consumer experiences. It’s a job with a paycheck sure to trump any newsroom copy editor’s, and one that offers DVorkin — who launched and sold the site True/Slat to Forbes — the luxury of straddling the business and editorial sides of the news.

To better understand the intersection of the business and editorial sides, Baldwin suggests journalists interested in the business side of the news look for opportunities in product development.

When she was director of product development for Tribune Interactive, part of her job was to help the Los Angeles Times figure out how to use an events database that had been created for a new online entertainment product, Metromix, to power the paper’s print listings.

“We were dealing with some pretty senior editors at the Times who were very concerned about every aspect of how the listings would appear,” Baldwin said. “Having been in that position at the Chicago Tribune, I knew exactly what their concerns were and was able to make them understand that we were committed to the quality they desired.”

Baldwin also suggests journalists become as intimately acquainted with their products as possible. Skills such being able to understand audience analytics and analyze a cash flow statement can be particularly handy.

“As news organizations come up with new stuff,” she said, “understanding your product better than anyone else can be a real benefit.” Read more

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