New business models - new sources of revenues

Webinar by Tatiana Repkova
Founder
© Tatiana Repkova 2001-2014
New business models – new sources of revenue

Content
•Business model – definition:
How to make money?
•Old model (mass media era):
- Circulation/ readership/ viewership/
listenership spiral
- The erosion of every part of the revenue sources
•New business models (social media era):
How to make money – real-life examples and
experience

Business model = the manner by which a company tries to capture value from its business.

Business models specifies how the company will convert inputs (capital, raw materials and labor) into outputs (total value of the goods), profits
and delivers it to its investors.

In other words:

How do you plan to make money?
In other words:

Calculation:

1. Revenue  Costs → (-) Loss
Calculation:

2. Revenue = Costs → 0
Calculation:

2. Revenue = Costs → 0
3. Revenue  Costs → (+) Profit
Calculation:

Old model (mass media era - print)
NEW TIMES: Making a Professional Newspaper in an Emerging Democracy, page 46

Old model (mass media era - print)

Old model (mass media era – all media)
Readers, Viewers, Listeners
Readers, Viewers, Listeners
Print, Broadcast

New models (social media era)
+ Other revenues
Print, Digital, Online, Broadcast
Readers, Viewers, Listeners, Users
Readers, Viewers, Listeners, Users

Revenue sources
Revenue sources
1. Advertising (print/digital/broadcast)
2. Circulation (print) + users (digital)
3. Editorial content (print/digital/broadcast)
4. Other products/services + brand
5. Other sources
1. Advertising
2. Circulation
3. Editorial content
# ad pages / ad time sold
# copies sold or distributed
copyright – licensing/syndication
Old/traditional media business model
(circulation /readership / viewership / listenership spiral)
New business models (emerging within the digital economy framework)

New business models:
Revenue sources
Real-life examples
and experience

1. Advertising
Advertising: Creating a new readers market
Trome, a popular tabloid newspaper in Peru
www.inma.org
Trome has connected an emerging lower middle class with a brand that speaks its language. The content is tame, local, family-oriented, and conservative – maybe even safe, as many local community newspapers can be.
The newly created reader market is of enough scale to break the unwritten rule that advertisers don’t want
C and D demographic audiences.

1. Advertising
Advertising: Collaboration of regional and local media
800 UK local newspaper websites combine to launch
1XL national ads platform
www.pressgazette.co.uk
•A collaboration between three of the top four local newspaper publishers
•A combined reach of 17.5 million monthly unique website users
•Online display advertising now worth over £2 billion per annum, a market hitherto dominated by the likes of Google and Facebook

1. Advertising
Native advertising - branded/sponsored content
Video profiles of local businesses and sponsored content
New revenue stream at Register-Guard (US) in partnership with students
www.inma.org

1. Advertising
In-image advertising
•The Washington Times started placing ads over images in November 2012
•It runs about 100,000 images per month with ads, which is a small portion of its total images
•Only on entertainment photos, like this photo of the Super Bowl
www.digiday.com

1. Advertising
www.niemanlab.org
Ghafla, the most popular entertainment news site in Kenya
> 1.2 million monthly unique visitors 4 years since it launched
Revenues from sponsored content and daily deals
The founder Sam Majani says he’s making 13 times what he spends on operations for a profit of over 90%.

Online video
1. Advertising
www.journalism.co.uk
>50 titles (The Week, Men's Fitness , Auto Express)
UK magazine publisher Dennis:
•150m YouTube views/year
•£2 million a year from:
-YouTube
-ads displayed around videos placed on any of the 20 Dennis sites
-providing creative video solutions for brands (car reviews, health & fitness, …)

Marketing services
1. Advertising
www.abmassociation.com
www.poynter.org
•NewBay's Joe Braue: At least 10% of publishing revenue should come from marketing services
•Nontraditional sources of revenue rise at McClatchy (US): Digital advertising and direct marketing account for 40%

Creative agencies established by:
1. Advertising

Washington Post Media
launches independent polling group “Capital Insight”
to work for outside clients
1. Advertising
http://jimromenesko.com

The Guardian to act as platform
for renowned arts organisations and their content
1. Advertising
http://onlinejournalismblog.com
Partnerships with some of the most prestigious UK arts institutions
•Glyndebourne
•The Royal Opera House
•The Young Vic
•Art Angel
•The Roundhouse To give audiences access to the best cultural performances, shows and events

Hyperlocal newspapers: Low-cost model
www.editorsweblog.org
Four community-based weekly newspapers in Egypt that allow their readers to be part of the editorial process
•El Nagaawiya – in an industrial town in Upper Egypt
•Dishna El Youm – in a rural town in the south
•El Asema 2 - in Alexandria
•Welab El Balad – in a university town
Published by Welab El Balad, a for-profit company, which currently also makes money through specialized training for journalists:
•five days of training per month
•mentoring on a weekly basis

Attracting more readers by repelling rain
www.inma.org
Diario Extra in Guayaquil, Ecuador, found that street sales declined during rainy season
Printing a special edition with a plastic waterproof coating on the front and back pages during rainy season
The Umbrella Newspaper

PM/evening newspapers - switching to morning editions
•Newcastle daily the Evening Chronicle has now become simply ‘The Chronicle’ after switch to morning printing
•The Dublin Evening Herald to change title and be sold in the mornings
•The Belfast Telegraph is to scrap its evening edition and become a morning-only title
•Bristol Evening Post drops 'Evening' from its name and Saturday edition
www.holdthefrontpage.co.uk www.guardian.co.uk www.pressgazette.co.uk

iPad replaces evening paper
PM/evening newspapers - switching to morning editions
www.redactor.in.ua www.niemanlab.org
Revenge of the afternoon newspaper: O Globo (Brazil) sees engagement skyrocket with a magazine-like iPad app

Daily to weekly / weekly to daily / periodicity switches - cutting editions
•Most UK regional dailies will go weekly within the next ten years - Steve Dyson, a former regional editor
•Printed newspapers in the United States and Canada cease publishing daily (2012)
www.holdthefrontpage.co.uk

«Future newspaper is a weekend newspaper, a newspaper of the day off.» Mario García
«Changing frequency of newspaper publication is not a sign of the apocalypse.»
Robert G. Picard
www.mediamanagement.org

The Bristol Post which scrapped its Saturday edition is claiming a 25% sales rise for its extended Friday edition (2012)
www.holdthefrontpage.co.uk www.pressgazette.co.uk
Johnston Press: 5 dailies converted to weeklies have seen a 77% sales increase compared with their average daily sales

Print to online switches Online/virtual/paperless-only editions
Reducing print circulation
Print and online - websites raising/reducing print circulation – media cannibalization?

Local news site in South Wales launches print edition
Free newspaper: bi-weekly, full-color tabloid, 16 pages, circulation 10,000 copies
www.caerphillyobserver.co.uk Average 50,000 page views and 20,000 unique visitors per month
From online version to print –
reverse publishing

Radio station "Echo of Petersburg“, Saint Petersburg, Russia launched a print version
reverse publishing

‘LiveJournal’ in Russia wants to publish blogs in book format
reverse publishing

Female French resource Doctossimo.fr (9 million views)
has launched a print version
reverse publishing

‘Blogger News’, Russia:
Offline magazine
for bloggers
reverse publishing

Selling online/digital content & payment channels: To charge, or not to charge?
Increasing price of single copies/subscription
Subscription-only models

Expanding/shrinking geographical area
Latest geo-location trends
1)Hyperlocal Location-based services / geo-location / geo-tagging – reaching/building communities/neighborhood
2) Global/International Cross-border distribution / transmission in major languages: English, Spanish, German, … National markets not big enough for sustainable business models
•The New York Times - The IHT – The International NYT
•Huffington Post – editions in a dozen countries
•The Guardian – US market
•Daily Mail – Mail Online app, the largest online daily worldwide
•Financial Times – global print edition, focus on online/digital
•Axel Springer - 3 pillars of strategy: Market leadership. Internationalisation. Digitalisation.
•WSJ. Magazine, included in The WSJ 12 times a year, launching a Latin American edition

 Niche publishing
Long tail = the retailing strategy:
•Selling a large number of unique items with relatively small quantities sold of each – usually in addition to selling fewer popular items in large quantities;
•Extending the reach of marketing to the low-frequency, low-intensity consumer in a cost-effective way Definition: Wikipedia

Copyright - Licensing/Syndication – News Aggregators
3. Editorial content (print/digital)
«The world of media licensing is still operating as if digital was never invented. » Thomas Baekdal, media professional, Denmark
www.baekdal.com
«What people need to understand is that the digital world doesn't revolve around the format.»
•We don't have a single channel.
•We don't have circulation figures.
•We don't have a limited publication cycle.
•What we publish doesn't end after one month.
•And we are certainly not defined by a country border.

Copyright – Franchising
www.protecmedia.com
Marca in Colombia: The first franchise of a sports newspaper in the world
•Marca, the most-read sports newspaper in Spain and one of the most prestigious in the Spanish language
•The initial circulation of Marca Colombia was 60,000 copies (May 2013)
•Distributed throughout the main cities in the country, such as Bogota, Medellin, Cali and Cartagena

How a local newspaper made a big profit:
Publishing a police chronicle
Media/news/newspaper archives Books
The book « We Don’t Make This Stuff Up: The Very Best of the Bozeman Daily Chronicle Police Reports» became a local bestseller in a small town in Montana, USA.
Published in 2011
Republished 3 times
Sold 11,000 copies /$10 a piece
Bozeman Population: 39,000
ijnet.org

The South China Morning Post
curates content into profitable cookbook
Media/news/newspaper archives Books
A cookbook featuring recipes from its food editor and Hong Kong's top 20 chefs.
•Generating additional revenue
•Boosting subscriptions
•Enhancing the brand
www.inma.org

La Vanguardia appears to be the first Spanish newspaper to launching an ebook publishing program (2011)
The first books were free, in:
· Amazon Kindle . ePub . mobi . pdf
Media/news/newspaper archives Ebooks
Spanish newspaper La Vanguardia: Ebook publishing program
http://moconews.net

Minneapolis Star Tribune publishes serialized novel
in newspaper, turns it into an e-book
Media/news/newspaper archives Ebooks
•The e-book has received much more attention than the free version on the Star Tribune’s website.
•Longform journalism “doesn’t read very well on a traditional website. You end up scrolling a long, long way,” said Kate Parry, assistant managing editor for special projects and features, Star Tribune.
The cover for “Giving up the ghost.” (Painting: Eddie Thomas/Star Tribune, Cover design: Mike Rice/Star Tribune)
www.poynter.org

•Esingles: longer than most magazine articles, shorter than most books
•Between 5,000 and 30,000 words
•They don’t cannibalize other formats (nearly impossible to find a magazine that will run a 10,000-word story)
•Usually nonfiction
•A true digital-native format
•The value to the consumer: quality content, short reading
•Sold as an inexpensive ebook
•Usual price: $0.99 to $2, or £0.70 to £2
Media/news/newspaper archives Esingles
http://econsultancy.com http://paidcontent.org
Esingles = short ebooks
Some of the titles published by Byliner, an esingles startup in California

Media/news/newspaper archives Esingles
http://econsultancy.com http://paidcontent.org
New York Times’ “Snow Fall” esingle
at digital bookstores for $2.99
“Snow Fall: The Avalanche at Tunnel Creek”
A longform multimedia story at www.nytimes.com
“Snow Fall”
a NYT’s esingle sold by Byliner

Boston Magazine sells over 6,000 cover posters of May 2013
Media/news/newspaper archives Posters
“This would make a great poster,” someone wrote on Boston Magazine’s Facebook wall in April 2013.
The poster cost $20, of which $4.75 goes to printing costs and shipping.
The remaining $15.25 goes to the One Fund Boston, which helps people affected by the April 15, 2013 bombings.
http://jimromenesko.com

Supplements/guides/lists/calendars
Atracting advertisers by guides and lists
•A number of college newspapers in the US have had success by adding housing, restaurant, and bar guides to their websites.
•The Daily Tar Heel at the University of North Carolina- Chapel Hill spent money in 2009 to develop an online housing guide, Heelshousing.com
www.pbs.org
Online housing guide
Heelshousing.com

The Portland Mercury's Cocktail Compass barfinder app is helping the alternative weekly (US) to generate new revenue streams.
Supplements/guides/lists/calendars
Atracting advertisers by guides and lists
William Reed Business Media- owned Restaurant Magazine (UK) runs the 50 best restaurants in the world list.
www.themediabriefing.com
www.netnewscheck.com

Changing editorial content
De Correspondent, Netherlands:
Not “news” but “new”
How we turned a world record in journalism crowd-funding into an actual publication: About De Correspondent
http://medium.com/de-correspondent

Covering a single subject
For example, education
Can you cover a single subject, like education,
and be editorially independent?
Yes, you can
www.niemanlab.org

Specific types of content
•NYT plans to improve its service of crossword puzzles, as well as to develop a few more puzzles
•NYT crossword puzzles attract about 60,000 people daily
•Distributed by subscription for US$7 a month
•The newspaper earns an additional US$3 million per year
www.hopesandfears.com

Add-ons
For example, books, DVDs, data …
www.theguardian.com
Investigative journalism website Exaronews (UK), has abandoned its paywall.
Focus on “add-on data services” (e.g. an insolvency service tracking businesses in the country)

Ecommerce/social commerce by media - readers/audience clubs
DMG Media, DMGT's consumer media division, makes £5 million in direct cruise sales alone (it's unclear whether that's gross or net figure, minus affiliate fees).
Ecommerce still represents about 5% of all retail commerce so there's room for opportunity and growth. (USA, 2012)
www.mediapost.com

The Guardian’s shop
www.mediabusiness.com.ua

Wine clubs
www.editorandpublisher.com
It is an ethical nightmare and a potential legal mess. Still, some of the most influential newspapers in the US are wine propagandists:
•The Chicago Tribune
•The Dallas Morning News
•San Francisco Chronicle
•Los Angeles Times
•USA Today
•The Wall Street Journal
•The New York Times

Events
•Banquets, bridal fairs, kids expos, “She, An Expo for Women”
•Big-name celebrity guests, which pays off with high attendance and sponsorship amounts
•Revenue exceeds $1 million annually
• “Go Cooking” events: “gastroentertainment”
•Bringing 150 to 200 people to the kitchen each month
•Rock Erie, a music festival
www.naa.org
Examples from 3 newspapers in the US and Canada:

Designate an event planner.
Seek out sponsors to make money.
Networking is a key attraction for attendees.
Build support in the newsroom.
Provide memorable experiences.
Events
•Start with what you know. Build events around a coverage area or theme that is part of the fabric of your community and a competency of your staff.
•Have your best journalists host events.
•How to build audience and revenue using events:
Lessons learned
www.naa.org
http://ebyline.biz
www.kbridge.org

Event-specific products
•During the 2010 World Cup series, the Spanish language weekly El Mundo (USA) created interactive print origami soccer 'jerseys' to connect the local Hispanic community with advertisers.
•Located in Kirkland, Wash., El Mundo is published every Thursday with a free circulation of 20,000.
www.editorandpublisher.com
Connecting community with advertisers

Education
•TimesTutorials.co.uk - education subscription service to teach the UK National Curriculum for five- to 16-year-olds
•Subscriptions £12/ month or £96/year, or £8/month for just one subject
•Heavy cross-promotion for Times subscribers, via the Times+ membership perks scheme: a full year's access for £60
•Personalised worksheets and progress reports so parents can monitor their kid’s maths and science skills from afar
•Optimised for mobile and tablet devices
www.netnewscheck.com
chronicle.com/blogs
•NYT has suspended online-education program as colleges are putting their own courses on the Web.
Media companies should explore the opportunities provided by open online courses.
The strategy is not a new one.

Conde Nast, which publishes Wired, Vogue, Vanity Fair … has opened a fashion and design college in New York, drawing on the title's expertise and contacts.
Education
Launching education facilities
The Times of India Group enters into the education sector, with the launch of the Times Centre for Learning (TimesPro).
www.afaqs.com

From digital recipes to real-life cooking courses at Styria Media Group: Ichkoche.at - a cooking portal
Education
www.inma.org

Education
Weekend workshops
A small Vancouver news site is offering 7 weekend courses from $195 to $395
Topics:
•photography
•memoir writing
•document sleuthing
•how to run low-budget
political campaigns
www.niemanlab.org

Consulting
www.newspapersoc.org.uk
The Midland News Association has launched Star Employment Services, the first recruitment agency of its kind to be set up by a regional publisher.
Wired UK helps businesses and brands put on events.

Licensing media technology
Forbes Media signed its first technology agreement with ALM, the leading provider of news and information for the legal and real estate industries “By partnering with Forbes to license its innovative Falcon content management platform, we are confident that the upcoming Law.com Contributor Network will be a groundbreaking digital platform.” Jeff Litvack, chief digital officer of ALM
•Specialist UK consumer magazine publisher Future developed its Folio platform to convert print publications for the launch of Apple's Newsstand in 2011
•Used by 15 clients to deliver a total of 50 titles (Feb. 2013)
cms.sys-con.com

(State/government support – subsidies)
5. Other sources

Fundraising/crowdfunding
5. Other sources
Different levels of experience with fundraising
in Latin America:
•CIPER (Chile)
•El Faro (El Salvador)
•IDL-Reporteros (Peru)
•Animal Político (Mexico)
•Agência Pública (Brazil)
•Confidencial (Nicaragua)
•El Puercoespín (Argentina)
•La Silla Vacía (Colombia) – see next slide
•Plaza Pública (Guatemala)
•The Clinic (Chile)
www.niemanlab.org

Membership model
5. Other sources
‘Super Amigos’
Not just a product but access, privileges, opportunities
LaSillaVacia, a Colombian website focused on investigative journalism about power and politics, has a membership group of 550 ‘Super Amigos’ that in 2013 contributed US $32,000.
Their appeal is to people who want to support independent journalism. That is almost enough money to finance their operations for a month.
“We answer every comment. That gives you a different relationship with your audience.” Juanita Leon, founder
http://ijnet.org

Sponsorship
5. Other sources
Create community, don't just publish news:
Sponsorships, not ads
BetaZeta, a digital media outlet in Chile (10 million users monthly), is turning away from traditional advertising toward sponsorships, which now make up 40% of its revenues.
“The advertising business model is dead for everybody. For television, for magazines, for radio, for everybody.” Leo Prieto, co-founder
http://ijnet.org

Sponsorship
5. Other sources
A Mexican blogger created a business with political satire
Chumel Torres is a video blogger whose satiric take on politics and journalism has managed to attract 483,000 subscribers to his YouTube channel in just one year.
As of November 24, 2014, the number of subscribers has almost doubled to reach 889,995.
He has made a business out of the sponsors he attracts to his weekly program, El Pulso de la República (The Pulse of the Republic).
http://ijnet.org

Surveywall
5. Other sources
Google launched a survey service; websites can earn cash reward for carrying out consumer surveys.
Even paywall pioneer FT.com is using Google’s surveywall to gain extra revenue.
The Texas Tribune and Adweek are using Google microsurveys as an additional revenue stream.

Diversification
5. Other sources
DMGT's moves to higher margin digital:
•healthy homes and jobs classifieds businesses
•Mail Online, which didn't exist in 2007, now makes £45 million a year
Future Publishing (magazines):
-2007: the only online revenue = advertising
-2012: digital revenues = £20 million, incl. £5 million in sales from Apple's Newsstand in the 12 months after it launched on the online kiosk in October 2011
How leading UK publishers have adapted over 5 years of disruption

Diversification
5. Other sources
Boston.com's new revenue stream: online radio
Opportunities for developing low risk, low budget revenue streams: see previous slides
www.emediavitals.com www.inpublishing.co.uk
Diversifying on a shoestring

New business - new mission
5. Other sources
“Our strategy is to be a major international provider of media content, renowned for distinctive products that deliver information, education and entertainment in ways that people want them.”
Pearson PLC, 2000
The leading media and education company
“Our mission is to improve teaching and life- long learning. We help students, families, educators and professionals use assessment, information, research and innovation to promote learning and personal development, advance academic achievement, improve instructional productivity, and transform educational communities.”
Pearson PLC, 2013

Summing up:
“If you’re not prepared, you’re left behind.” Raju Narisetti, Senior Vice President, Strategy, News Corp., in his article ‘Top 9 challenges facing journalism’
“The main thing is the content, the rest is secondary.” Media analyst Ken Doctor about the future of media in the digital age
http://lenta.ru www.pbs.org

Таtiana Repkova
Founder
mediamanagersclub.org
trepkova@mediamanagersclub.org
Skype tatianarepkova
Twitter @trepkova
Thank you for attention!
You are invited to join our Skype discussion/brainstorming about new business models and new sources of revenues: Wednesday, December 10, 2014 from 3 to 4 p.m. UTC/GMT+1 How to join?
1)Please add me to your Skype contacts and I will call you then.
2)If you cannot join us by Skype, send me your questions, ideas, thoughts, tips, recommendations by email until December 9, 2014.
3)You will get a summary of the Skype discussion by email.
4)Feel free to share this presentation with your colleagues and friends.

Join our ongoing discussion
about media sustainability:
http://www.wsis-community.org/pg/groups/3098727/global-community- for-media-sustainability-gcms/

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