Tuesday, November 11, 2008

Can Newspapers Make Money Online?

The debate on the table is how newspapers can make money as more and more readers move to online sources to get their news. So far, no one has been able to find the answer to this question. And it's costing the industry, not just financially but in journalistic quality and experience.

If you are still employed in the industry or have recently left it, you probably have been personally touched by the announcements of layoffs at newspaper companies, whether it's my former employer, Gannett, or McClatchy or even family-owned companies like Sun Coast Media Group. So far this year, I know a veteran reporter, a photo editor, an administrative assistant, an assistant sports editor and several other newsroom employees who have been laid off from their jobs. From reporters to assistant metro editors to executive editors, everyone I've talked with lately is concerned about whether their jobs will be around in a year, much less beyond.

And the truth is, very few people -- if any -- are truly safe. Today, I received an e-mail from a former colleague who said 80 people will be laid off at her newspaper. And if you take the volunteer buyout, you'll get three months severance pay. Given the economy and the time of year, whether you volunteer or not, you will be lucky to find a job at all.

Recently, Poynter.org began a discussion about how newspapers can make money online. Here are a few suggestions from a former newspaper editor now working for an Internet start-up company:

1. Take a lesson from bankaholic.
Start a blog. Focus on a specific topic. Keep blogging. And before you know it, a bigger fish will come along and bite. Recently bankrate.com purchased bankaholic for "$12.4 million... with up to an additional $2.5 million earn-out payment available for the attainment of certain performance metrics in the next 12 months."

For the writers still left in the room after the next round of layoffs, this might be a personal project -- if you're not doing it already. For the newspapers searching for ways to make money, I would think a few jobs could be saved if you could find a buyer for niche blogs like this one.

2. Connect the dots with coupons.
Earlier this year, Media General purchased a coupon site called dealtaker.com for "double digits." According to the company's press release in March, the site had 500,000 unique hits a month.

It would be interesting if, beyond continuing to maintain the site separately, the company connected the coupons to its news properties as a way of improving traffic and profits to dealtaker -- which isn't the most user-friendly site by far.

Interestingly, DealTaker.com recently started a site for shoppers searching for Black Friday deals -- deals readers used to come to newspapers to find. It's a solid content partnership, for certain, but to bolster my argument, here's a quote from Steven Boal, CEO of Coupons, Inc. "Newspapers deliver almost 90 percent of the 384 billion coupons distributed each year," Boal said in a Mediapost article in 2007. "As consumers shift their media consumption online, newspapers' sites are the natural place for them to turn for savings." Of course the quote came from a story about newspapers selling an online coupon site to Coupons Inc., a move that made me scratch my head.

3. Find a niche and own it.
Every market I've ever been in has a niche -- one thing it covers like nothing else. Consider the niches in your market and look for a new web idea that appeals to readers beyond your local boundaries. The idea is to use content you already produce in a different way to add to the revenue stream.

What exactly do I mean? Let's take the Baltimore Sun, for example. Its sports folks cover The Preakness like no one else in the United States. Yes, I know -- the race already has a site. But even I can figure out it's in need of a good editor, sport or otherwise. Beyond providing better stories, video and photos, there's something else a niche web site can offer to a user: hotel, restaurant and other related travel information that someone coming to the event will want to know.

What does this kind of niche web site give a newspaper company struggling to survive? A national base for advertisers to reach a particular demographic -- not to mention traffic that you can connect to your news site. And, if you're particularly enterprising, you can even sell event-based coupons that can run online leading up to the event. Or you can repackage some of the content into a print-based souvenir magazine to add to your revenue.

When it's all said and done, you may do more than improve your profits, you may save a few journalism jobs along the way.

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