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Submojour report is out

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Our research report is finally out!

Chasing Sustainability on the Net : International research on 69 journalistic pure players and their business models

This report outlines how online-based journalistic startups have created their economical locker in the evolving media ecology. The research introduces the ways that startups have found sustainability in the markets of ten countries. The work is based on 69 case studies from Europe, USA and Japan.

The case analysis shows that business models can be divided into two groups. The storytelling-oriented business models are still prevalent in our findings. These are the online journalistic outlets that produce original content – news and stories for audiences. But the other group, service-oriented business models, seems to be growing. This group consists of sites that don’t try to monetize the journalistic content as such but rather focus on carving out new functionality.

The project was able to identify several revenue sources: advertising, paying for content, affiliate marketing, donations, selling data or services, organizing events, freelancing and training or selling merchandise. Where it was hard to evidence entirely new revenue sources, it was however possible to find new ways in which revenue sources have been combined or reconfigured. The report also offers practical advice for those who are planning to start their own journalistic site.

Featured post

Submojour report is out

Click here for full PDF.

Our research report is finally out!

Chasing Sustainability on the Net : International research on 69 journalistic pure players and their business models

This report outlines how online-based journalistic startups have created their economical locker in the evolving media ecology. The research introduces the ways that startups have found sustainability in the markets of ten countries. The work is based on 69 case studies from Europe, USA and Japan.

The case analysis shows that business models can be divided into two groups. The storytelling-oriented business models are still prevalent in our findings. These are the online journalistic outlets that produce original content – news and stories for audiences. But the other group, service-oriented business models, seems to be growing. This group consists of sites that don’t try to monetize the journalistic content as such but rather focus on carving out new functionality.

The project was able to identify several revenue sources: advertising, paying for content, affiliate marketing, donations, selling data or services, organizing events, freelancing and training or selling merchandise. Where it was hard to evidence entirely new revenue sources, it was however possible to find new ways in which revenue sources have been combined or reconfigured. The report also offers practical advice for those who are planning to start their own journalistic site.

Sumojour Report: Table of Contents

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Chasing Sustainability on the Net
International research on 69 journalistic pure players and their business models

Table of Contents

Abstract

1. Introduction
Esa Sirkkunen, Clare Cook and Pekka Pekkala

2. Diversified media landscapes
2.1. Overview of media systems

Esa Sirkkunen

2.2. USA: Moderate success after a long crisis
Pekka Pekkala

2.3. Japan: Journo-based and journo-oriented
Mikihito Tanaka

2.4. UK: Big media friends
Johanna Vehkoo and Clare Cook

2.5. France: Tensions and diversity
Clare Cook

2.6. Italy: An unfinished transition
Nicola Bruno

2.7. Spain: Enthusiasm and fragility
Luchino Sívori

2.8. Finland: Legacy dominates
Esa Sirkkunen

3. Revenue sources
Clare Cook and Esa Sirkkunen

4. Sustaining journalistic entrepreneurship
Pekka Pekkala and Clare Cook

5. Conclusions
Clare Cook, Esa Sirkkunen and Pekka Pekkala

About the authors

Appendices
– List of cases in the SuBMoJour-database by country
– Questionnaire

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Submojour Report: Abstract

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The SuBMoJour study maps sustainable journalistic startups in nine countries. It includes an online database detailing the business models of these entrepreneurial sites (www.SuBMoJour.net) and an accompanying narrative analysis. The study supports research to date that online environments offer the necessary market characteristics for niche journalistic sites and content production. There is a rich and diverse set of media case studies in the database, all with their unique interpretation of serving communities or reportage. The study maps the business models of journalistic startups firstly within national settings, thus allowing for a comparison between countries, and secondly in terms of revenue models. It includes 69 case studies gathered by semi-structured interviews over 12 months by an international team of researchers.

In our findings the business models of the cases fall into two main categories: those which have storytelling-orientated business models and those which rely on a more service-orientated model.

The sites whose business model is based around storytelling are still prevalent in our findings. These sites focus on making money from producing original content, news and stories, for audiences. The difference to the mass media model is that in the online world the target audience is smaller. Online journalism relies heavily on niche audiences built around targeted themes such as hobbies, neighborhoods or psychographic tendencies. In this niche journalism there is a tight triangulation between journalistic content and advertised products. The other group, service-oriented business models, seems to be growing. This group consists of sites that don’t try to monetize the journalistic content as such. For ex- ample citizen journalism sites are more like platforms that curate and moderate citizen-oriented content, or news aggregators compile stories form other outlets. Some startups have specialized in selling technology, information, training or diversifying to redefine what it means to do news.

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Sumojour Report: 1. Introduction

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By Esa Sirkkunen, Clare Cook and Pekka Pekkala

The media landscape is changing. The stranglehold of mass media over production and dissemination is loosening, and media entrepreneurs are increasingly taking up their place in a fragmented media ecology. New global actors have emerged as the production, consumption and distribution patterns transform (Wunsh-Wincent 2010; Newman 2011). And this new era of entrepreneurialism is not just about Silicon Valley: media entrepreneurs around the world are harnessing new tools, ideas and platforms to flex their muscles and redefine what it means to do journalism.

Change is constant. The old way of making money is broken and most organisations are facing an unstable economic future, especially for those professional and legacy media in most of the Western countries. The rapid transition in media markets, which started to intensify in the USA after 2006, has more recently struck other countries. The fundamental stability of the industry as a lucrative business has been drawn into focus. Even countries like Finland and Japan with high newspaper density are facing a rapid shift in the media economy and production.

There are several common factors being faced everywhere. Firstly, the legacy media business model is struggling to adapt to an online and networked environment. As Picard (2010) states, it should be remembered that journalism has never been a viable product as such. It has always needed some other source of revenue than just the money collected directly from the readers. The mass media model that has been so successful and predominant for more than a century has based itself largely on two revenue sources: small fees collected from the mass audience and selling advertisements to subsidise the production costs. Now this model has been challenged from various sides by new media uses, products, devices and technologies. Media organisations have been, on the whole, slow to adapt to the new unique capabilities of a social and online space, failing to push new lines of business or grapple with the pace of change (Filloux 2012). Many are burdened with legacy operating costs and, faced with the worst recession of the post-war economy, have found it challenging to cope with the rapid business transformation needed to cope with new digital competition.

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Submojour Report: 2. / 2.1 Diversified media landscapes

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This chapter focuses on the geographical setting which frames the business models of journalistic startups within national settings thus allowing for a comparison between countries.

It begins with a short introduction to the different media systems operating in the countries of this study and the relevant literature relating to media structures. It then presents how legacy media in each country is adapting to the changing economical environment, delineating the journalistic startup scene in those areas unique in both geography and culture.

This aims to give the reader a sense of the trends emerging in online journalism in each country and to give short descriptions of the types of companies that we have brought into the database.

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Submojour Report: 2.2 USA: Moderate success after a long crisis

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Pekka Pekkala

  • There is no magic one-solution-fits-all formula to surviving. Advertising still the major source of income but new revenues from community support and consulting are emerging.
  • Frugality is key. Costs are kept down and newsroom growth is in sync with growing revenues, not with expected revenues.
  • There’s very little promise in citizen contributions if you’re running a small, niche web site. Contributions are sporadic and the one-man-publisher- editor model seems to create most of the stories by themselves.
  • Niche sites seem to enjoy strong community support, which can be backed up with financial support. People are willing to pay small sums to support the pub- lications, in a form of exclusive access or newsletter. People pay to be part of the community and support a publication they think is important and worthwhile.
  • Entrepreneurial thinking remains a problem. Traditional newsroom work doesn’t require any business intelligence and journalists start their entre- preneurial path from zero. It takes time for them to realize that they are probably the best people to run the business side of things as well as the editorial. A business mindset grows gradually. The skills are there but they need time to develop.
  • The case studies included are: TheBatavian.com, DavidsonNews.net, MedCityNews.com, Ars Technica, BargainBabe.com, Technically Philly, ArtsJournal.com, PatientPower.info, MedCityNews.com

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Submojour Report: 2.3 Japan: Journo-based and journo-oriented

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Mikihito Tanaka

  • Large news sites including legacy media websites are now mainly relying on incomes from advertisers, but by observing and following trends overseas, they are trialling several other business models to acquire sustainability. Currently many sites have moved towards a freemium model, but this is not without problems.
  • Many small and medium-sized news sites including alternative journalism sites are partly dependent on its news distribution to portal sites or legacy media. Because of Japan’s barely there donation culture, citizen and alterna- tive journalism sites are struggling to survive, although they are attempting to disperse risk by using several profit models at the same time.
  • By inventing new web architecture some subculture sites have been great successes. In these cases, more journalistic agendas were put in place after their success.
  • Apart from economical sustainability, Japanese online journalism culture is facing several challenges for its sustainability. For example, training, supplying and the livelihood of young journalists in online culture is a key problem.
  • Another relatively new topic in Japanese history is fixing the online public opinion sphere to bridge the gap between nationalism and globalism.
  • The case studies include: A Power Magazine, Nanapi, Rocket News, Webronza, Record China, Niwango, Our Planet TV, 47news, CB News, Gigazine, JB Press, Blogos, Sankei Digital, Natalie, Videonews.com.

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Submojour Report: 2.4 UK: Big media friends

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Johanna Vehkoo and Clare Cook

  • Many UK startups do not rely on advertising revenue. There are several who make their money from legacy media, showing that the relationship between startups and legacy media players is collaborative rather than competitive.
  • The B2B (business-to-business) approach is very visible in the business models of our UK case studies. These are startups whose clients are either the traditional media or other bigger companies. It seems that there is more money in curation, aggregation and selling technology than in the high set-cost business of journalistic content creation. The hyperlocal scene is vibrant receiving much attention but sustainability is a struggle.
  • Apart from the hyperlocals, it’s surprisingly difficult to find UK startups who produce their own content and sell it to a large or even niche audience.
  • As our project contains no case studies from Scotland or Wales, this report mainly considers England. We also briefly mention an Irish case study, Storyful.
  • The case studies include: Lichfield Community Media, Hackney Citizen, Scraperwiki, Storyful, Tweetminster, Demotix, Media Street Apps, Blottr Digital, Journalism.co.uk, Audioboo, Landscape Juice, Not on the Wires, Talk to the Press, Women’s Views On News, Alderleyedge.com.

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Submojour Report: 2.5 France: Tensions and diversity

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Clare Cook

  • The legacy structures in the French media present bureaucratic rigidity. This makes it harder for entrepreneurs and startups to achieve financial sustainability and growth.
  • Unlike the UK, the French media system has an underlying and sometimes antagonistic sense of ‘them and us’ between old and new media fuelled in part by central leadership.
  • There is experimentation building media products around citizen journalism. AgoraVox is one of the most prominent European examples of a citizen journalism site, and one of the premier platforms in France for citizen journalism.
  • There are major players far outpunching their weight by cashing in on their legacy influence and reach. Ironically, the industry is structured in such a way that these legacy players offer a lifeline to fledgling media entrepreneurs.
  • Startup journalist sites can cash in on a civic role with a rallying call: from the tagline of website and print-magazine Causer.fr ‘especially if you don’t agree’ to the ‘alternative news’ of Les Nouvelles News and the civically engaged BastaMag, online journalism has given a voice to a range of sites wanting to fight causes and be heard.
  • Several have taken the decision not to use advertising to finance their editorial initiatives, as in Italy.
  • The case studies include: Rue89, MediaPart, AgoraVox, Citizenside, Dijon- scope, ThisFrenchLife.

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