Over the past 2 decades, traditional journalism organizations have seen their market share hammered by startup digital alternatives that use technologies, business models, and channels that were unimaginable in print's heyday. The loss in print ad revenue, the growing appetite for real-time mobile news, and the challenge of engaging an always-on, perpetually distracted audience have exerted significant pressure on the viability of legacy new organizations. But an increasing number of publishers see the wisdom of applying the same startup mindset used by the newcomers as the key to fighting back. Could thinking and acting similar to a startup be the key to ensuring publishing longevity?
When considering the "startup mentality," some combination of the following attributes likely springs to mind: small, agile, risk-taking, disruptive, and a shoestring budget. That is likely not the same set of characteristics you'd use to describe news organizations that have been around since before television or radio was invented-and therein lies the challenge. Alan Mutter, a consultant specializing in corporate initiatives and new media ventures involving journalism and technology, says, "Legacy news organizations like The New York Times, CBS, and Time, Inc. haven't embraced transformational disruptive change. They keep nibbling around the edges."
In an effort to provide fresh approaches to creating sustainable business models, the online publishing trade association Digital Content Next (DCN), together with the Knight Foundation, in February announced plans to select 10 news organizations to receive free 2-year memberships with DCN. Jennifer Preston, the Knight Foundation's VP for journalism, says via email, "As news organizations continue to operate in a rapidly changing digital world, they need to respond to new information needs quickly and introduce fresh ideas to stay relevant." She adds, "Startup culture values experimentation and evolution. As news organizations continue to operate in a rapidly changing digital world, they need to respond to new information needs quickly and introduce fresh ideas to stay relevant."
Freedom to Experiment
Along with The Marshall Project, The Texas Tribune, and Voice of San Diego, one of the first four recipients of the DCN/Knight grant is Billy Penn, a mobile-first news platform dedicated to covering the important issues affecting Philadelphia's three M's: mobile-minded Millennials. Staffed by newspaper veterans, the site launched in October 2014.
Jim Brady, Billy Penn's founder and CEO, cites some particular startup elements that he feels have been important to the growth of the site, which saw 400,000 unique visitors in January 2016, an eleven-fold increase from January 2015. "There's the innovation that comes from working in a small team and fast decision making," Brady says. Regarding the latter, Brady mentions Billy Penn's decision to launch a public Slack channel about the May 2015 Amtrak crash in Philadelphia. "We talked about it in the morning, and it was live by noon. By the time that decision was made in most of the traditional new organizations I've worked for, the story would have been over."
But Brady says that the biggest advantage of being a startup news organization is freedom. "Not economic freedom, of course, but freedom to build a culture of innovation and risk-taking. You can take some shots in this early stage that would be challenging for a brand that's been around for 50 or 100 years. There's a freedom in not being known."
Preston concurs, saying, "The traditional journalism mindset is failure averse, which can limit creativity, innovation, and-ultimately-change. In addition, the new environment demands that journalists diversify and constantly update their skills, focusing on areas such as technology, entrepreneurship, and data mining."
But Preston sees reason for optimism: "We are seeing a shift now with newsroom leaders increasingly willing to embrace change and seeking out training, best practices, new organizational models, and tools to drive digital adoption. Also, newsroom leaders realize they have to partner, collaborate or hire leaders in other fields to build a strong journalism ecosystem."
Diversifying Revenue Streams
Achieving the economic freedom to which Brady refers is no small feat for any startup. "If you think of a coder working in his living room, they don't start in order to do great software and great data analysis," says Mutter. "They do it because, presumably, there are people who want to buy their product," and, over the longer term, their company. So all that freedom to experiment better include some bold forays into moving past reliance on deep-pocketed initial investors and grant money.
Preston agrees about the critical need for sustainable growth: "Developing nimble business models that evolve in response to environmental factors is important for news outlets as they navigate the transforming media landscape. New and diverse revenue streams are needed as old ones drop away."
Brady says Billy Penn saw the need for a diverse revenue stream from the beginning. It leaned into community-building events, including a party to recognize individuals on the publication's Who's Next list and an Ultimate Philly Sandwich Bracket live tasting event. "We didn't want to get into a page view game," says Brady. "We know that Millennials value experiences. So by hosting these events, we have a revenue stream that's not about advertising that buys us time as we build our audience and ad revenue." Right now, event tickets and sponsorships comprise about 85% of Billy Penn's revenue stream; Brady's expectation is that it will decline as ad revenues increase.
Along with its own event schedule, The Texas Tribune, founded 2009, has embraced the NPR model as a member-supported, digitally focused nonpartisan news organization. Readers are invited to donate at various levels, with perks such as having their name on the site and invitations to State of the State cocktail receptions. And Voice of San Diego, which turns 10 this year, takes a similar hybrid approach. Preston says, "For startups, it's grow or die. Voice of San Diego are pioneers in the digital news ecosystem because they created a nonprofit, member-supported local news outlet."
Will the startup mindset, applied both in new organizations and within established publishers, be enough to right the industry ship? The alternative-of sticking with the tried and true-definitely won't do the job. Brady says, "There are a bunch of different people figuring out a bunch of different models right now, and we're all watching each other to see what works." When evoking the startup spirit, he adds, "You have to poke around and try."
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