Tom Davidson

My friends at the Online News Association put together a terrific program at the University of Alabama-Birmingham for entrepreneurial journalists and others interested in starting news and information sites. (Thanks to the Gannett Foundation for the necessary financial support.) 

I spoke a bit about emerging business models to support these kinds of sites (and – plug warning – the work of my partners at GrowthSpur).

You should search on Twitter for the #ONAUAB hash for some of the fascinating discussions that grew out of the sessions. Less fascinating, perhaps, was my presentation – but for those who asked for it, it’s here.

(Why, yes – I used Prezi. My friend Tim Windsor snarks that Prezi screams 2009 the same way a Yamaha DX7 synthesizer screams 1983. But, hey, I liked a-ha.)

Also: Here’s Robert Hernandez’s excellent presentation on how journalists can use social media tools (both to build audience, and to be better reporters).

And @DannySanchez’s informative riff on free tools doesn’t have a perfect online analog – but he writes about nearly all of those tools (and even more) on his blog, Journalistopia.com.

The Knight Digital Media Center’s entrepeneurial bootcamp at USC has been terrific. (Search #uscnewsbiz on Twitter to get a feel for how terrific.)

Here’s a bucket o’ links and resources I referred to in the discussion at the Knight Digital Media Center’s Entrepreneurial Boot Camp. (They may be useful, of course, to other journopreneurs.)

• First and foremost: As you think about revenue, don’t fixate on one source – no successful media outlet ever has. Look for several – specific ideas in this link .
• I freely admit that I’m a history geek (How many Virginians does it take to change a light bulb? Four – one to unscrew, three to give you the history of the old one all the way back to the landing of the first English colonists at Jamestown.) If you want to understand the context of today’s media revolution, here are some terrific (I’d say essential) readings.
• The number of independent news and information sites is exploding. To keep up – and to spot trends in sustainability – three sites are particularly helpful:

J-Lab at American University

The New Business Models for News project run by Jeff Jarvis at CUNY

The Collaboratory run by the Reynolds Journalism Institute at University of Missouri

• Several specific essays and blog posts have become intellectual watersheds of the independent-site phenomenon. I’d encourage you to read Jay Rosen’s “the people formerly known as the audience” piece – it reads like a manifesto. Similarly, Jeff Jarvis’  notion of “do what you do best, link to the rest” is critical. If you ever need to remind anyone of what’s at stake, Clay Shirky’s talk at Harvard in late 2009 is calmly frightening. Scared? Good. Now, for a glimmer of hope, read James Fallows’ piece on how Google just might not be the enemy Rupert et al think it to be.
• Enough of the intellectual stuff. Let’s get to work. And because we’re broke entrepreneurs, we’ve got to do it cheaply. Here’s some free and low-cost stuff.
• Finally, something to keep an eye on. It’s no exaggeration to say that Journal Register Company historically ran some of the worst newspapers in America – small-town dailies and weeklies with antiquated equipment, dispirited staffs, crushing debt and Dickensian management policies. New CEO John Paton is dragging it out of bankruptcy with a refreshing “question everything” style. JRC’s Ben Franklin Project set a goal of publishing an existing daily and weekly using nothing but free and open-source tools – and succeeded. It’s brilliant experimentation, worth stealing.

Also: Here’s the link Susan Mernit mentioned to Brad Feld’s VC site.

I’ve been preparing a presentation to the terrific News Entrepreneur Boot Camp at the Knight Digital Media Center next week. I’m part of a panel of folks who have transitioned from the newsroom to business-side roles.

As part of the prep work, I’ve re-read a hefty stack of posts about emerging revenue models for news – advertising-supported for-profits, L3Cs, non-profit structures, even the wishful-thinking paid-content model.

Running through many of the pieces was an irksome thread: A focus on single solutions. Most framed the discussion in terms of “what’s the source of revenue,” as if there were a magic bullet that can solve every operation’s money woes.

There isn’t, of course. What’s more important, though, is there never has been. In times like these, naiveté isn’t charming – and for entrepreneurial journalists, it can be downright dangerous.

No successful news media organization has ever relied solely on a single source of revenue. In fact, the most successful industry segments – newspapers, magazines and broadcast stations – have long had many revenue sources, almost too many to list.

There’s more elaboration – and a rough list of the different sources — in this deck.

Key takeaways:

-  Don’t think too broadly. Even something as seemingly straightforward as “advertising” isn’t a single source of revenue. There are myriad advertising products – each with distinct strengths and weaknesses, sets of customers and sales models.

- As you plan the revenue models for your own proto-business (that’s what start-up journalism sites are, folks), copy the best of traditional organizations. Find multiple streams of revenue.

(Lest this come off as too scolding: I think it’s fantastic to see journalists actually interested in this sort of question. For decades, most of us acted as if the money that powered our organizations was created by magic. Worse, some assumed that it was the result of their brilliant journalism. For a welcome example of incisive, if tardy, analysis, see James Fallows’ terrific Atlantic piece on Google and the news industry.)

Most of what I hate about the newspaper industry was encapsulated in a single session at the American Society of News (not Newspapers! Really!) Editors meeting in D.C. a few days ago. An otherwise smart agenda took the inevitable detour down the rabbit hole with yet another discussion of pay walls.

Walter Hussman, publisher of the Arkansas Democrat-Gazette in Little Rock, flogged his usual paywall-as-a-defense argument: In a world where online users are worth less than print readers, he seems to say don’t bother with the former. “Why would I want to be platform agnostic when I can get (ad rates of) $40 (per thousand print readers) instead of $4?”

 I was reminded of two recent, similar quotes:

•  An analysis ascribed to Washington Post president Steven Hills in a devastating New Republic piece on the paper’s woes: Post print readers are worth $500 a year in revenue; online readers are worth only $6.
• Rupert Murdoch’s assertion that users will cough up for online content: “When they’ve got nowhere else to go they’ll start paying.”  

Hussman and Hills are both falling for the same “defense first!” mentality that has crippled innovation at newspapers. They’re implicitly assume print readership will stay the same forever (it isn’t ), and that print ad revenues will maintain, too (they aren’t).

Rupert is making an even bigger mistake. He assumes “nowhere else to go,” conveniently forgetting that his media empire was built on expensive printing plants and government broadcast licenses, each of which makes competition economically unfeasible.

Clearly, Rupe hasn’t noticed that those monopolies are gone (or maybe he’s blustering). Local television stations are emerging as real competitors  to newspaper sites in many markets. Some, like Allbritton Communications in Washington, are building separate sites to target niches and general news. And there are plenty of independent  local  sites, with new ones springing up all the time. On their own, they may not seem formidable. But enough of them in a community could ruin a local newspaper publisher’s day. No wonder potential entrepreneurs are licking their chops.

 (The ease of publishing via free services like WordPress  and Blogger are a key reason that “information wants to be free.” More on that, including some semi-geeky economic theory, another day.)

 If competition makes paywalls nothing more than defense (and the numbers sure seem to make that case), then what’s a better answer? What gets at Hussman and Hills’ arguments that print readers are worth more?

Let’s take this out of the emotional world of change for a second, and into the dispassionate world of math. Everyone remember the commutative and associative properties from third grade?

If your print readers are worth 10 times your online users, then work to get 10 times the number of online users. You’ll make the same amount of money. (Actually, you’ll end up with more – production costs are lower on digital platforms. No paper, no trucks.)

Daunting? Sure. Simply regurgitating your print product in digital formats won’t grow your audience ten times. No single product will, either.

But a network of niche products is part of the answer.

So is good app for the iPad (and don’t forget the waves of similar devices that are sure to follow).

It also means forcing the business side of the house to think clearly and execute.  And it means engaging in biz-side thinking ourselves.

If our goal is to grow our audiences again – not merely milk the ones we have – we have to engage consumers. We have to give them what they want, when, where and how they want it.

Yes, it’s not easy. Innovation never is.

But doing nothing – or hiding behind a paywall – merely guarantees a slow, lingering death for newspapers. That’s unfair to shareholders, to employees – and ultimately to the communities we serve.

Matt Mullenweg is at it again.

He’s the creator of WordPress, one of the free tools that’s reinventing the world of media and the very definition of what it means to be a “journalist.”

How does Mullenweg justify giving away the results of years of work? Then working more untold hours on upgrades (helllll-ooooo Version 3!)? Then giving it away, too?

Simple: He builds complementary businesses that play in the WordPress eco-system.

You can set up your blog at WordPress.com for free. Want extra features – like truly massive amounts of storage for video, or a custom domain name? Pay a few bucks a year.

His company, Automattic, does other things, too. It provides hosting services for high-volume blogs. It builds paid add-ons for sites, like poll/ratings widgets. His latest is a service that makes it easy to create backups for WordPress sites – especially people who run large blog networks – for less than $20 a month.

None of these fees are large themselves, but they add up.

There’s a lesson there for journopreneurs:  Don’t get embroiled in the endless, economically unviable wishful thinking about paid content on the web. Relent and give the content away – then figure out how to make money elsewhere in the ecosystem.

That could be slick, intuitive and innovative delivery mechanisms – especially on tablets and mobile devices.

It could be building real communities around topic pages, comments and local blog networks, and serving as a sales-and-servicing agent for them. Or banding that community together for group-buying experiences.

Or – and this is the fun, scary part – it could be an idea that no one has figured out yet. One of just might.

(This is why one of my icons at Gravatar – another of Mullenweb’s companies – is a mad scientist. A small prize, and an AARP card, to the commenter who first identifies him. ;-) ).

Over at the GrowthSpur blog, Mark Potts and I have posted about a bunch of free tools we like that are highly useful for entrepreneurial journalists.

(Oh – and that jokey lead about hardware stores? Not a joke. I’m so bad that the Fabulous Sue Corbett (trademark pending) jabbed me in a one-act play about Noah’s Ark she wrote for a youth group.

Scene: Noah’s sons talking after God commands their father to build an ark:

Son 1:  You know what this means?

Son 2: Dad has to make a trip to the hardware store.

Offered with no comment, and minimal context: The writer, Eileen Spiegler, is a longtime colleague, and a gifted copy editor.

From her online musings on a random Wednesday:

“Sometimes I wish the newspaper was as interesting as my Twitter stream.”

Discuss, please.

OK, I know that I rant about Moore’s Law continually. It’s the key driver of the digital age. It’s why things that seem incomprehensible get invented, and it’s why things that flopped spectacularly just a few years ago are common and successful today.

But many people – traditional journalists especially – struggle to get Moore’s Law. “Half as expensive per unit of computing power every 24 months … wha?!?”

This analogy struck me today (and, thanks, Florida, for blowing my bracket on the very first afternoon): The NCAA tournament is an example of a Moore’s Law function in action. How do you get from 64 teams to the Sweet Sixteen in just four days? Simple: The number of teams drops by half every round.

The tournament grinds down 64 teams to the final four in just eight game days.

Moore’s Law grinds down a $500,000 server to under $10,000 in a decade.

Don’t let the math equations freak you. Just know that whatever kind of entrepreneurial journalism you want to try, the hardware is cheap. And it will only get cheaper. (The software, too.)

Fear the Turtle.

Eleven years ago, I caught the break of my life: I got a one-year Knight Fellowship at Stanford. (I still find it so shocking that I rarely mention it. Friends say it usually takes at least 18 seconds before I bring it up in conversation.)

I’m unabashed about how grateful I am to the program – whatever I’ve achieved in the past 10 years of my career is due solely to what I learned on that fellowship.  Jim Bettinger and Dawn Garcia are to be commended for dramatically shifting the program’s focus to address the radical changes facing our industry.

Until two years ago, the program operated much like the Nieman Fellowships at Harvard, or the Knight-Wallace program at Michigan: Pitch us an idea that will make you a better journalist. It might be Internet economics (my topic); it might be studying the narrative form of American musical theater.

Stanford has unique qualities, however – it’s a world-class university in the heart of Silicon Valley, a place that has consistently spawned great companies.  Now the Knight program asks applicants to submit ideas that “focus on innovation, entrepreneurship and leadership to foster high quality journalism during a time of profound transformation.”

For several years, I’ve gotten to peek at the stack of ideas as one of several former fellows who help the program staff screen applications (nearly 150 U.S. applications for the 2010-11 class). We completed that initial screening last week. There’s still a lengthy process of interviews and review by the program committee before next year’s fellows are announced in April.

Still, there are several useful lessons in this year’s stack, applicable not only to future Knights, but to anyone who aspires to entrepreneurial journalism. (All opinions are my own, of course, not those of the program.):

What was great:

•  A “just do it” attitude: Personally, I loved the people whose proposals (and, usually, their current work) showed a bias to action. They launch stuff knowing it isn’t perfect, then adjust based on the audience reaction. That’s a far cry from the attitude most of us developed in the days of monopoly outlets. (I remember an editor screaming at us we should never experiment on our readers. Sounds reasonable – but in practice, it meants we never tried anything new.) A thousand start-ups are experimenting out there – and an axiom of the startup world is that with enough experiments, someone will figure out what works.
• Awareness of the trends in technology. You don’t need to be a technologist to get a fellowship – but it sure helps to know broad trends in technology, especially as they affect journalism.  The best applicants understood that cheap tech gives anyone the ability to publish; and that it’s getting easier by the day to organize and display vast pools of raw data.
• It’s not just about the World Wide Web anymore. (Doesn’t the very phrase “World Wide Web” sound archaic?) Several applicants noted that publishers need to deliver information when, where and how consumers want it – and increasingly, that means mobile devices. The best name-checked the iPad specifically.
• Recognition that Stanford is a candy store of knowledge. The best went out of their way to discover the particular professors, classes and research going on at Stanford related to the applicant’s idea. (Hint: If you’re thinking of applying for a fellowship anywhere in the future, write that one down.)

What wasn’t so great:

• Applicants who focused their proposals on “saving newspapers as we know them,” rather than saving journalism. There’s a difference.
• Those who acted as if the fellowship is a lifetime achievement award: “I’ve done this and this and this – so someone somewhere owes me a sabbatical.”
• A corollary: “I need a year off to learn all this new, foreign digital stuff.” Stanford is a marvelous place to learn about the interplay of technology and storytelling – but basic knowledge can be acquired anywhere. Start with the people on the digital side of your current or former shop.  And don’t make the mistake of implying that they’re not journalists because they sometimes hold different opinions than you. (Someone did that in a fellowship application a year ago. Guess what? They didn’t get a fellowship.)
• “At the end of the year, I’ll have produced a report.” To steal a line from my former colleague Chris Krewson: The future of journalism isn’t going to be invented at a conference. Studies are helpful, of course – but only when they lead to actual publications that can be tested in the marketplace.

Best of luck to the Knight class of 2011. I’m insanely jealous of you all.

Publlishing hyperlocal information? Getting some grant money for it now from a local foundation? Or running a local foundation that’s interested in doing more to improve the flow of information, especially as traditional media suffer 1,000 cuts?

Here’s a chance to double down – and also gain access to significant training, guidance and knowledge.

The Knight Foundation, which is probably doing more to help journalism through this tumultuous period than any traditional media company, is coming up on the deadline for another round of its Knight Community Information Challenge. Note that this program is separate from the Knight News Challenge, which is about funding innovative ideas.

The FAQs are make clear the requirements. An added benefit (besides the dough): Registration is still open for the introductory Media Learning Seminar in Miami March 1-2. (If you go, and have never seen Amy Webb do her thing: Try not to let your jaw hurt anyone on its way to the floor.)

Moreover, there’s a chance to get answers to any questions you have about the program. The fine folks at the Knight Digital Media Center at USC and Cal-Berkeley are hosting a web-based Q&A on Feb. 26.

Journopreneurs: This can be a terrific start to your hyperlocal site – if you can partner quickly with a community foundation willing to match any Knight Foundation funds. But before you get all giddy, think about sustainability! If you get this money, what are you going to do make sure you can generate real money at the end of the grant? (Hint: “Apply for another grant” is not an acceptable answer.)