Kevin spotted a great Tweet yesterday from Peter Corbett:
And I’m afraid I just couldn’t contain the geologist within (click to see full size):
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From the category archives:
Business
In April last year I wrote about a start-up called Kachingle for The Guardian. I explained Kachingle thusly:
After registering with Kachingle, users decide on a maximum monthly donation, currently set at $5 (£3.50). When they see something they like, they simply click on the Kachingle “medallion” to initiate a donation. Kachingle tracks their reading habits, tots up how many times they visit each favoured site and divvies up the money proportionally at the end of the month.
It’s equally simple for site owners, who just need a PayPal account and a snippet of code to display the Kachingle medallion. The revenue split gives content providers 80% of the donations, with the rest covering Kachingle’s costs and PayPal fees.
I’ve been quietly keeping an eye on Kachingle to see when they would launch and was excited to get an email from Bill Lazar, Kachingle’s Marketing Engineer, last week saying that they were ready for beta testers to come on board. They will be launching properly in early February.
I think Kachingle is a really interesting idea, and I’m very excited to have the opportunity to test it out. That’s the medallion, up there in the top of the right-hand sidebar. All you need to sign up with Kachingle is a PayPal account and a spare $5 a month (although you can spend more if you want to). That works out at £3.07 per month, which even in a recession I think I can spare!
Kachingle sits very nicely with my recent decision to buy as many hand-crafted present for Christmas as I could. In an economic downturn it is more important than ever to support small businesses and I really like the fact that the vast majority of the money I spend on sites like Folksy go to the person who made the item I’ve bought.
But Kachingle is not just a way that I might earn a little spare change, it also gives me a way to support others. I’m hoping that over the course of the next few months, bloggers I enjoy will be able to join up and let me show them my appreciation.
If you want to sign up as a Kachingler or as a Site Owner, get in touch with Kachingle’s beta programme. And, of course, let me know what you think in the comments!
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A common joke amongst journalists is that all we need is two examples to proclaim it a trend, but we’ve got much more than that when it comes to rush to build local media empires in the US. In June, AOL bought two local services, Patch, which provides news to small towns and communities, and also Going, which provides a local events listing platform. MSNBC.com bought Adrian Holovaty’s hyperlocal aggregator Everyblock in August. In September, local news network Examiner.com owned by billionaire Philip Anschutz’s Clarity Media Group bought citizen journalism site NowPublic. Now, we have another major move in hyperlocal with CNN and others investing $7m in aggregator Outside.in. CNN will not only invest in the site, but it will also feature feeds from Outside.in.
Outside.in founder Steven Berlin Johnson called the investment and content deal:
a vote of confidence in the platform we’ve built at outside.in, but perhaps more important it’s an endorsement of hyperlocal and the ecosystem model of news that many of us have been championing for years now.
Fred Wilson, a venture capitalist and the principal of Union Square Ventures, is an investor in Outside.in, and he makes the passionate case for people covering their own communities.
My unwavering belief is that we will cover ourselves when it comes to local news. We are at the PTA meetings, the little league games, and the rallies to save our local institutions, so who better to cover them than us? This is what hyperlocal blogging is all about and it is slowly but surely it is gaining steam.
CNN’s partnership with Outside.in can be seen as a simple response to a competitor, but with all of the deals in this space, I guarantee that 2010 will see additional deals and development. Add to this location based services and mobile, and you’ve got somethig very interesting happening.
The promise of ‘pro-am’
As Fred says, people will cover their own communities, and we have seen some interesting hyperlocal projects including the pro-am projects of MyMissourian in Columbia Missouri and BlufftonToday in South Carolina or hyperlocal projects here in London like William Perrin’s Talk About Local. I personally like pro-am models where professional journalists cover the official life of the community – council meetings, crime, sports, schools and other local issues – while the site provides a platform for the community to cover itself and the full range of lived experience there. As Clyde Bentley, who set up MyMissourian, found out, readers didn’t want to write about politics as much as they wanted to write about religion, pets and the weather. Here are the lessons he learned from MyMissourian:
- Use citizen journalism to supplement not replace.
- UGC isn’t free.
- Online attracts the eager, but print serves the masses.
- Give people what they want, when they want it and how they want it.
- Get rid of preconceptions of what journalism is.
- Every day people are better ‘journalists’ than you think.
Lessons learned from failure and success
Despite all of this energy and experience, hyperlocal has still seen more high profile failures than successes such as Backfence and the Loudoun Extra project by the Washington Post. Even in those failures, there are lessons to be learned. Mark Potts who was behind Backfence said that one frequent mistake of hyperlocal projects is that they aren’t local enough.
He believes the key is to focus on a community of around 50,000 people. Covering a bigger area makes it harder to keep people interested. “You care less the farther it gets from home.”
The difficulty for Loudoun Extra was integration with WashingtonPost.com and a lack of community outreach, according to Rob Curley who headed up the project.
That doesn’t mean that we don’t have success stories, but again, the secret to success seems to be a laser light focus on niche topics and keeping the hyper in hyperlocal. Crain’s New York just profiled Manhattan Media, which has seen revenue grow fivefold since 2005 and even more surprising is that ad revenue has continued to grow in the midst of the Great Recession. It’s a multi-platform, multi-revenue stream model with newspapers and websites, and their events business now contributes 20% of their revenue.
The lessons I take away is that newspapers trying to be all things to all people with no sense of place or focus are suffering mightily during the recession. Focus is key both in terms of topic and geography, and seeing as this is about engaging not only a virtual but very real world community, I’ll add my basic advice about blogging and social media: Be passionate and be real.
Whether we see a strong recovery in 2010 or not, local will be one growth area, and journalists looking for new opportunities should watch this space for ‘help wanted’ signs.
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If you have any hope of solving a problem, you better have a clear sense of what the problem is and what causes it. Listening to the paid content debates in the newspaper industry, the debate has become polarised and filled with assumptions and assertions rather than clear-headed thinking informed by research and data.
One assertion that I’d like to challenge right up front is the oft repeated claim that no one makes money with digital content. In the late 90s, I often heard editors say, “The internet is great, but no one has figured out how to make money with it.” The dot.com crash only reinforced this view. However, internet use continued to grow through the crash. Advertising shifted online, especially after Google introduced its search-based advertising model. Within a year or two after the crash, many large news sites like the New York Times and the Washington Post were making money. A 2008 study in the US by Borrell Associates found almost all of 3,100 news websites surveyed were profitable.
The Great Recession has hit both the print and digital businesses of the newspaper industry with a vengeance putting tremendous pressure on newspapers. As I’ve said, the economic crisis has reopened divisive debates between the print and digital sides of the newspaper business. To get through this crisis and rebuild sustainable businesses that support professional journalism, we’ve got to get real about the economic reality we face, not just in the depths of this recession but after it ends.
Steve Yelvington has more experience with digital journalism than many people have in journalism full stop. He fights bluster with data and even a graph. Most news websites exhibit a long tail with a hump, he writes.
Most of those visitors come once or twice, probably following a link
from a search engine or another website. They’re looking for something
very specific. They find it (or not) and leave.Then the number drops like a rock. Hardly anybody comes five times in a month.
But over on the right side you have an interesting little lump.
That lump is your loyalists. You’re going to have a hard time getting people to pay who come via a search engine, look at a page and leave. However, your loyalists see value in what you do and might be willing to pay. Working to convert more users to loyalists and giving your loyalists some way to pay for the content they value might be a revenue model that begins to add a revenue stream in addition to business cycle sensitive advertising.
Steve argues for a sophisticated model that leaves visitors who only look at one or two pages “unmolested” but asks those who view several pages to register with the site. News group McClatchy used this model, and the FT uses this model as well.
Determining how many pages people should see before registering and paying and what to charge are unknowns, but with a flexible system with graduated fees and clear benefits, this is a much more sophisticated model than some of the absolutist, binary solutions being thrown around.
Rewarding and building loyalty
I think that loyal readers should be rewarded, and I believe that they will reward publications they value with not only their traffic but also their monetary support. I think that newspapers could do much more to convert some passing traffic to more loyal readers, but it’s going to take better design and more engagement from journalists, which I know will be difficult with slimmer staffs. Not all journalists want to engage with readers, but I think that those who do and do it well should be encouraged and supported.
To successful deal with the problems that we’re facing during the recession and will be facing once growth returns, we need more data, more research, more experimentation and more sophistication in our discussions about business models. There is no silver bullet, no one solution that will save journalism. We’re going to have to try a number of things and a number of ways to earn money to support professional journalism. However, one of the first steps we need to take is to get past these lazy assertions and out-dated assumptions about the business. Lots of the conventional wisdom is based in the print-digital culture wars in newspaper newsrooms, and it’s in desperate need of updating.
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