Revenue streams for your news business: part 1
OK so you might have a brilliant idea for a new news business. You have the collaborators. You’ve got the website. You’ve got the content…
…but you’ve got to make it pay right?
There’s less than two weeks for students in the UK to enter myNewsBiz, the journalism enterprise competition. One of the questions entrants have to answer on their entry form is explaining how their business might make money: where will the revenue come from? To help in that endeavour, I’ve assembled these 10 possible ways to bring in cash.
They are just ideas, and the most successful businesses pick’n’mix from these plus several others. If there are any glaring omissions, let me know in the comments box!
10 ideas for revenue streams for your news business (part 1)
.01 mailing list
It’s an oft quoted maxim among online content creators that “the money’s in the mailing list“. Never mind creating a sharp looking online magazine – if your content isn’t flying straight into peoples’ inboxes then it has a far weaker chance of being viewed. Building a mailing lists means you have a clearly defined group of people interested in your journalism – and therefore they’re more likely to open the email.
Once you’ve built your mailing list up with great content you can look for sponsorship from organisations who’ll appreciate their advert going to inboxes and not just online. They then get a banner at the top of your newsletter.
I’ve mentioned TheBusinessDesk on here before: a daily newsletter of business news to their readers is one of the core things they create. There are plenty of services, like MailChimp who manage lists for you.
.02 other businesses
Here’s another maxim to learn from the business-heads out there: “the best customers are other businesses“. Why? Well, you can charge businesses more than you can charge an individual for something; but also businesses tend to be easier to deal with, and you’re less likely to get complaints.
So how do news businesses find revenue streams from other businesses? Well, there are several ways which pop to mind:
B2B journalism: Business-to-Business publications have mostly done OK during the recession. Their secret is they provide really good journalism to specific industries: their readers aren’t passing individuals, but (often) big corporations with lots of money to spend – who need the information you provide.
Another option is to act as an agency: in this line think of Getty, Demotix and of course, the news wires. Again, they’re building long term relationships with news organisations and charging thousands, not mere pounds.
If you still fancy creating a popular magazine, then there are ways to capture business revenue too. Treat it as a ‘shop-window‘ for a service business. For example, if you love web design as well as journalism, you can run a web-design business off the back of the magazine, with the mag’s awesome design bringing you attention and clients.
On a similar theme, another source of revenue could be the ‘partnership’. Here you are collaborating with a whole range of organisations on a specific project, and it’s very suited to the service business model.
We’re already seeing multimedia producers like VII Photography and MediaStorm talk about partnerships with organisations, either as a funder or a publishing partner. Here’s Stephen Mayes of VII, describing the idea in the British Journal of Photography in 2010:
“Certainly the magazines are still in the mix, but now more as print distribution partners rather than as exclusive clients (with additional distribution through TV and online partners), often co-funded by another party and supported separately by technology partners with access to story-knowledge being supplied by yet other people…The line-up shifts for each project, and as each new partner comes on board the opportunities to do interesting work and to generate income multiply.”
I guess it’s not hugely different to ‘clients’ but instead of finding one ‘client’ to pay you to do some journalism, you’re designing a project and getting involvement & funding from several organisations. This means you’re more driven by the project and not who’s paying for it.
Affiliation is where we get a bit close to the sales/infomercial area of business I think many of us would prefer to avoid. Still, there’s big (and relatively easy) money to be made in affiliates so don’t write it off.
How does it work? Well, you push your readers to someone else’s products, and take a share of every sale made. It has potential in a niche market, because if you can build up a significant, loyal fan-base around a specific area, related businesses will want their product in front of those people. Affiliate deals can nab you between 10-30% of every sale.
Sounds a bit dodgy. Can it be done in journalism? Martin Lewis, founder of MoneySavingExpert.com reckons so: his hugely popular website is funded almost totally by affiliate arrangements. But he is very transparent about when a product is affiliated, and separates it from the editorial content: crucially, he can still criticise a company even if they’re an affiliate.
This revenue stream is very dependent on the type of news product you’re out to create, but in the right circumstances you can get people to pay to read your content. Here’s a must-read articles on how media outlets are using subscriptions.
As newspapers are learning, the key is to avoid ‘news’ content – that’s a commodity now, and very few people will pay for it. But even if you’re writing for a very specific niche, you have to work hard to create something people will fork out for. Targeting the B2B market will give you a better shot.
Is it worth it with hardly any readers? Well, do the maths: if you create really good content for a specific audience, of say, 5,000 readers, that is so good, they’ll be happy paying £5 a month to access it – that’s £300,000 in the bank. A legacy news organisation can’t sustain that, but that’s enough cash to pay yourself and a few others a decent salary. This is where being small is important.
On Thursday: five more revenue streams – plus the most valuable one of all.