Jul 8, 2010

A few words from our panelists

I’ve said it before and I’ll say it again: I enjoy speaking with fellow hyperlocalists about the challenges we face. It’s my reason for getting up in the morning. That and emptying my bladder. Both are equally stimulating, the former on an intellectual level, the latter on a physical level.

So it was with brainy interest that I spoke recently with Terry (whose real name I’ve obfuscated for privacy’s sake). Terry’s fighting the good fight, running a nonprofit investigative-news site in her state capital. But grants are tough to score and corporate donations have the potential to taint her organization’s objectivity, she told me. On top of that, the nature of investigative news calls for long-form and serial writing, not exactly page-view generators.

Terry has considered hosting meet-and-greet events to generate revenue, charging cover fees (or “suggested donations” in nonprofit parlance) for participants to nosh with influential people. Unfortunately, the costs to organize, advertise and cater such events take a serious bite of whatever slim profit is possible, she worried.

My suggestion: Turn these events into a double-whammy volume business.

First, the volume part. Instead of holding cozy meet-and-greets in restaurants and charging higher fees to cover food costs, it might benefit Terry’s organization to host panel discussions in large spaces. A college or private company might be willing to donate use of a lecture hall or conference room, and a local caterer can donate light refreshments (though food always makes post-event cleanup a pain). On top of that, politicos and corporate spokespeople are usually willing to spout their agendas for free when given the opportunity to serve as panelists.

Such a setup allows Terry to suggest small, palatable donations at the door from a larger audience. It also reduces her overhead: So far in this scenario, Terry’s organization has spent zero dollars on space, food and speakers, and has gained a per-capita cover charge. Sweet, huh?

Here’s the double whammy. Terry can record such panel events for later broadcast on her organization’s website, for download as a free podcast, or as audio or video content for paid syndication. Delaying a broadcast gives value to attending panel discussions in real time, but it also allows those not in attendance to benefit from the information presented.

Most of all, delayed broadcasts can drive page views (read: advertising dollars) to a site, especially if a discussion topic or panelist sparks heightened interest between the live event and the recorded show. That kind of action also increases a program’s syndication value.

One event, two sources of revenue. BAM! BAM! A double whammy.

For-profit news organizations can duplicate this, though it might be harder to find donated space and food. Still, I predict a private college would be glad to host an event in exchange for sponsor status and the appearance of an esteemed professor on the panel.

I hope Terry and her organization can reap some revenue from producing these or similar events, as they would benefit the host and audience members alike. For more information on keeping investigative journalism afloat, check out American University’s iLab. Keep running the good race, Terry!

Photo courtesy of Flickr user Stacie Joy for CTTC.

Jun 16, 2010

The bitter pill of profit

I’m spending the rest of this week prepping the sickest PowerPoint presentation the National Association of Hispanic Journalists’ annual convention has ever seen. The show, going down in Denver next week, certainly won’t be for the faint of heart — lasers, a smoke machine and vuvuzelas will be used to drive my bulleted points home. Combine that with the mile-high altitude, and there’s bound to be at least one nosebleed in the audience.

For those who won’t be in attendance, here’s the abridged version of what I have to say: Entrepreneurial journalists must be entrepreneurs first, journalists second. Period.

That’s not to say that hyperlocalists and other journopreneurs must toss out the separation of church and state, that quality content and good reporting should fall victim to greed. I’m a big advocate for the “emotional value” of hyperlocal journalism. As I’ve written previously:

They [news consumers] assign value to it, they incorporate the information into their decision making, they allow it to influence their lives. That kind of quality far outweighs a website’s page views, a newspaper’s circulation or a broadcast outlet’s audience numbers.

But keeping a newsroom in that high gear requires money. Writers’ salaries must be paid. Equipment must be maintained. Transportation to and from news events must be covered. Even the most altruistic volunteer would find it difficult to run a news organization full time without an income to pay the rent or mortgage, or at least some compensation for expenses incurred.

The news business is just that — a business. It’s how big-box operations like AOL and Yahoo! News approach things, and hyperlocalists should do the same. Hyperlocalists are likely to leverage that emotional value to earn sponsors and donors, whereas the big boxes rely on volume to drive page views and advertising revenue.

But the goal — to generate profit or at least revenue — is the same, regardless of the news organization’s size or even its nonprofit status. (Yes, nonprofits need money too. They just reinvest it into their core missions, instead of distributing it to investors.)

It’s a bitter pill. Choke it down.

Photo courtesy of Flickr user Micah Taylor.

Jun 7, 2010

Beware of false profits.

Journoprenuers took a licking last week from two heavies in the media landscape: the federal government and Apple CEO Steve Jobs. Both made comments that would invest journalism’s future in its past, that is, institutional mainstream media that for years hasn’t been able to find its own ass with both hands and a flashlight.

First, the Federal Trade Commission (FTC) unleashed its draft policy recommendation “to support the reinvention of journalism.” While the document suggests the IRS recognize novel small-business structures for nonprofit tax breaks, it also pitches ideas that would keep small media outlets from doing their thang.

A tax on large broadcasters would relieve them of obligations to provide “public-interest programming,” like the kind a hyperlocalist would produce. A 2-percent tax on advertising sales would add a layer of meshugas to a small content producer’s books, as well as add an extra charge on local advertisers. Increased postal subsidies and a tax on accessing the mobile web would favor large print publications over hyperlocal newspapers and websites.

These proposed taxes would go towards establishing a national local-news fund, doling out university grants for investigative journalism, and tax breaks for hiring salaried journalists. Personally, I oppose government money in the media piggybank, and while a tax credit for hiring journalists is nice, hyperlocalists generally rely on freelance or volunteer contributors. The FTC document doesn’t do enough for small media.

And then there’s what Apple CEO Steve Jobs had to say at The Wall Street Journal’s D8 conference. The appointed messiah of media told conference participants, “I don’t want to see us descend to a nation of bloggers myself. I think we need editorial more than ever right now,” PaidContent.org reported Wednesday.

One might quip that Jobs’ disdain for blogs stems from the Gizmodo iPhone fiasco, but I think there’s another reason. While bloggers (and the online hyperlocalists who have that title hanging over their heads) create oodles of content, they probably don’t have the financial resources or tech savvy to distribute that content through an iPhone or iPad app. That’s money out of Jobs’ pocket and control out of his hands.

According to PaidContent, Jobs followed his swipe at bloggers with: “Anything that we can do to help The New York Times, The Washington Post and other news-gathering organizations find new ways of expression so they can afford to get paid so they can keep their news gathering and editorial operations intact, I’m all for it.”

Sadly, Jobs doesn’t recognize the original news gathering that hyperlocalists and bloggers do, and how some of those large media outlets base their “reporting” on a smaller outlet’s original stories. Again, I suspect this elitism stems from the lost potential of app sales: The iTunes store sells iPhone apps for The Times and The Post, as well as a Times app for the iPad.

Where is the love for hyperlocalists? When did innovation and imagination (the kind that Apple touts in its advertising) fall victim to monopolies? Instead of encouraging new voices and new investment, the FTC stifled them to preserve the industry’s collapsing status quo. And instead of lending Apple’s devices to new experiences with content, Jobs whittled them down to technological troughs for whatever iTunes’ gatekeepers deem worthy of consumption.

My advice to the FTC and Jobs: Beware of false profits.

Images courtesy of Flickr users 1Happysnapper (photography) and reelsinmotion.

Feb 8, 2010

Operators are standing by to take your call.

The idea of creating a nonprofit, hyperlocal news outlet never occurred to me when I threw my hat and publication into the entrepreneurial ring. Why build a business that doesn’t aspire to make money, I thought. In the end, my business failed to make a profit anyway.

Looking back, I should have given the nonprofit model more consideration. It would not have guaranteed my publication’s solvency, and it probably would have taken just as much work on the marketing and management end as a for-profit business. But it would have been one more option to raising revenue.

Contrary to my earlier belief, nonprofits are permitted to make money. The catch: That money must go towards funding the organization’s goals, not revenue sharing with employees or investors. Some nonprofit news organizations have done well for themselves. In 2009, the MinnPost publication in Minneapolis brought in $458,000 in donations, while the syndicated AlterNet press service raised $300,000 from reader donations plus $600,000 in grants.

Also contrary to another earlier belief, nonprofit publications are allowed to sell ads to supplement the donations they receive. Last year, the MinnPost raised $217,000 in ad revenue. AlterNet made half a million dollars in ad sales.

So can a hyperlocal news organization, one that reports on the community level, make that kind of money? My guess is no, but that doesn’t mean a hyperlocal nonprofit can’t have a healthy bank account. I’ve never performed any kind of fundraising, but I have a few ideas on how to kick start a nonprofit newsroom:

  • Hit up local homeowners associations, neighborhood civic associations, and co-op and condo boards for donations. As residents and property owners, they stand to benefit the most from hyperlocal coverage.
  • Try professional organizations with a strong presence in the neighborhood. For example, if there’s a hospital in the area, a local branch of the medical association might be interested in donating.
  • Ask a local business to contribute some percentage of one day’s receipts to the publication. It seems like a win-win when the local pizzeria donates $1 for every pie sold and still pulls $5 in profit from the sale.
  • Ask readers to donate money. The best time to hit people up for charitable donations is right before the New Year, when homeowners are looking for tax deductions. Reminder: Only incorporated nonprofits can receive tax-deductible donations.
  • Ask readers to donate time. Residents might not have expendable income to contribute, so give them the opportunity to volunteer for a “street team” that will promote the publication to new readers and potential sponsors.

I’m sure there are far more creative ideas for fundraising, so I encourage readers to share them in the Comments section below. Also, there may be distinct conflicts of interest between nonprofit news outlets and the organizations that sponsor them. I’ll explore that in a future post.

Photo courtesy of Flickr user Heather Durdil.