Tom Davidson

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.)

I had a quick conversation the other day with someone interested in using my colleagues at GrowthSpur  to help launch his news web site. As usual, I encouraged him to charge ahead – but urged him to pick a niche, not launch a general news web site.

This goes against years of training and experience most of us have as traditional journalists: Bigger is better, right? Cover more things, get a bigger audience?

It’s hard sometimes to pull ourselves away from topics we know too well. So to understand why niche sites work so well, let’s look instead at the same issue in another industry – retailing.

Sears' logo, circa 1970

In the middle of 20^th Century, Sears was the dominant store in America. It offered most things to most people, conveniently located at almost every mall in America. Their shirts weren’t the greatest, but they had a plentiful selection. Downstairs, the hardware department had most of the tools you’d need; out in the garage, you could get a new Die-Hard and fresh tires.

Today, Sears is a mere shadow of itself – and it wasn’t dethroned by Montgomery Ward or others who tried to do the same thing, just better. (more…)

I started reading a new blog today – one launched by a handful of writers to continue the work they were doing at a now-defunct trade magazine.

I commend them. They’re gamely carrying on in the face of the implosion of their publication, and they’re doing it without getting paid.

But I’m not linking to them here because I don’t want to embarrass them. The new site is, well, a bit of a mess.  has issues. (more…)