2012-11-21

TAMPERE - A study into online journalistic start-ups and their business models conducted as a joint project of three universities was published recently. By looking at 69 case studies, it analyses the online journalism landscape in nine countries and gives recommendations to media entrepreneurs on how to build a sustainable online platform.

The SuBMoJour study (Sustainable Business Models in Journalism) is a project of the universities of Tampere (Finland) and Waseda (Japan) and the USC Annenberg School for Communication and Journalism (US). The study, through analysis of 69 case studies, distinguishes between two categories of start-ups: those with a business model based on storytelling, which focus on making money by producing new content, and those with service-oriented business models such as citizen journalism platforms or news aggregators that sell technology, information or training.

What most start-ups have in common is that they have a business model built on a diversified revenue stream, based on traditional advertising income combined with one or more of the following revenue sources:

  • Sponsorship and philanthropy (ProPublica)
  • Microfunding (Spot.us) and micropayments
  • Collaboration between mainstream media and citizen journalists, where the big media uses its channels to promote amateur content and creates a win-win situation for both parties.
  • Family ownership and trusts (The New York Times, BBC)
  • Narrowing the focus with niche and passion content, offering hard-to-find material that has high value to specific groups
  • Partnerships – adding value and sharing costs between parties, such as a newspaper, university and a foundation that share a common goal.
  • E-commerce and engagement; memberships
  • Digital deliverance, electronic paper and e-readers

Most start-ups proved not to challenge ‘traditional’ media but rather to supplement them by serving smaller niche audiences or by selling niche content to other, bigger media outlets. The structural change that the media ecosystem has undergone in the last decennium has thus opened up a range of opportunities for start-ups.

The study concludes with some recommendations for media entrepreneurs wanting to start their own online outlet. The first is to work with a small team and do as many things as possible in-house. Secondly, people with entrepreneurial ambitions, especially journalists and other newsroom workers, should realise that they need to increase their skill set: study up on business management, marketing and sales. A third piece of advice is to start thinking about the money from the very start of the new activities and not postpone it as a problem that will resolve itself later. Furthermore, the study emphasises the importance of building up an affinity with advertisers and maintain good ties with them. At the same time, support is more than financial and entrepreneurs should communicate that to their customers or readers. Finally, all the start-ups included in the study seem to have found a niche. That makes it advisable for newcomers to do so, too.

The full study can be found here.

Author: Rafael Njotea

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