New Model Journalism

Tracking the media-funding revolution

Archive for the ‘Traditional media’ tag

The quest for a new model for journalism

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What is the new model that will sustain the journalism of the future? The posts below – the fruits of a conference hosted by the NUJ earlier in the year – represent some of the first answers to this question. Some are dispatches from the founders of start-ups; others offer early observation by media-watchers of the new territory emerging in the face of the demise of the traditional business model.

So let’s get the elephant in the room straightaway. It is possible that there simply is No New Model for Journalism. That’s the thesis of a forthright piece by Robert Niles in the US, where attempts to find a way out of journalism’s current impasse are somewhat ahead of those in the UK.

There are, Niles argues, only three basic ways to make money out of journalism, and they all sound rather familiar: payment by customers, revenue from advertising and donation in the form of public subsidy or grants from philanthropists. Instead of pursuing a vain quest for a Holy Grail, the thesis goes, publishers should concentrate their efforts on developing new production models based on more cost-effective ways of news-gathering.

But even if there is no crock at the end of the rainbow, that doesn’t mean it’s time to call off the search. New ways of doing journalism are evolving, and it’s a rich, even hotch-potch field. The ‘new models’ are often more experimental round the edges than brand-new, some are hybrid, some already look like duff ideas, and some, at core, are downright old-fashioned.

While the most impressively innovative approaches tend to be ultra-practical, embracing new media technologies and engaging with niche audiences in sophisticated ways, others tacitly challenge the prevailing cultural and political attitudes about the media, who it’s for, and why it matters.

One such attitude is the rise of the ‘free’ culture which has made it so difficult, in an online age, to charge for information. With the Times and Sunday Times’ recent decision to start charging, it’s too early to say whether it really is too late to row back.

Other approaches, exemplified in Camden New Journal editor Eric Gordon’s contribution below, challenge the axiom that a successful media organisation must necessarily generate continuing growth. Maybe, if we really value local news, foreign coverage, and the scrutiny of politicians and businesses, a model turning a modest profit could be enough? Now there’s a radical thought for our times.

Written by Alex

April 2nd, 2010 at 6:57 am

Dominic Ponsford – the future of the media

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How are we going to make journalism pay? By saying to advertisers that we can help them reach a mass audience online, an elite audience in print, and, get to interact with readers at events

  • Despite the recession, the media has remained profitable, and is now poised to bounce back
  • There are opportunities for micro publishing, some examples of which are already making money
  • There are signs that even traditional local newspapers are bouncing back

A year ago, the media seemed to be facing an apocalypse.  Johnston Press’s shares went down to about 12p and Trinity Mirror’s to 15p – that from companies that used to have share prices in the region of £5.  To those who invested in journalism, it seemed like the end.  There were big redundancies and closures of papers. Looking today, media share prices are nowhere near where they were – the share price of the above companies is now above £1.  That means that the worst of the crisis is over and people are starting to launch new products.

Press Gazette (PG) has gone into administration once, closed twice and gone from weekly to monthly – so we are not a shining example of a media brand that has triumphed.  We have survived, however, when everyone had written us off – and there are some lessons in how we did it.

Like most B2B magazines, the bulk of our income used to come from jobs ads.  The internet did for that, as did holdthefrontpage.com, which is jointly owned by Johnston Press, Trinity Mirror and Northcliffe –  all banned their editors from using PG.

Last April, Progressive Media bought PG and relaunched us in monthly format.  We are now continuing with our strategy – a premium magazine, and breaking news online.  Subs are £90 a year – the student rate is £40 a year.

The strength of PG is its brand – that may be the only reason we survive.  To keep the PG brand alive we have worked hard to be part of the online community.  When I joined, we had a gated website, but progressively we came to seem less and less relevant. All our stories were broken by free-to-view competitors.  Not having a serious web site is not an option, because you become irrelevant.  We attract about 100,000 unique users to our website, which is not enough to generate much from advertising, but they do keep the brand strong.  The future for us will be leveraging the brand in new ways, with things like events, conferences, awards, even maybe contract publishing.  Paywalls may work for premium features.

On the churnalism debate, the Nick Davies book is great.  But, it is a history book.  To rage against churnalism is like raging against the weather.  I am not scared to say that most of what I do is churnalism.  Journalists are outnumbered by press officers, bombarding us with stuff.  A news organisation has to be part of that conversation. You have to be a canny churnalist, though.  Use blogs to point readers to information, take information from press officers, but use your skills to sort the wheat from the chaff.  Add value by your insight and link to other information.  Use blogging tools.

Don’t waste time rewriting stories – just link to people who have done a story well.  If you can do all that, and be a new modern journalist, you can still make the time to do the real stories, and keep up with everything else.

How are we going to make journalism pay? By saying to advertisers, that we can help them reach a mass audience online, an elite audience in print, and interact with readers at events. We promise advertisers that we will push their brands into our reader’s computers with our daily email.  Email is going to be a really important way of pushing news.  Readers are either time-poor or lazy.

I am optimistic about the future of journalism, but I don’t think that we will ever get back to the staffing levels of yesterday.  Why? Because there are now a lot more journalists covering our beat – on holdthefrontpage, journalism.co.uk, Media Guardian, not to mention bloggers.  PG won’t dominate, but we can take a leading role.

What of ‘the PLC bloodsuckers thesis’?  Trinity Mirror and Johnston Press have hastened the decline of local papers by seeking unrealistic profit margins.  But, that does not explain everything.  The last regional ABCs showed that even the best publishers, like Cumberland Newspapers – an enlightened family-run newspaper group – had lost 9% of their sales. There is something wider going on.

There are a lot of positive small niche publishers.  London-se1.co.uk, and chiswickw4.com, for example.  They are one-man bands that show you can have a sustainable future, doing ultra-local publishing.  Figures from the USA show that if you have a community of 40,000 people, with one journalist, they reckon you can make a business with a turnover of $100,000 pa – more than most journalists make.  And most of these business haven’t even begun to monetise what they do, because don’t generally have much commercial experience.

 It’s worth remembering too, that hardly any paid-for local papers have closed.  The Long Eaton Advertiser is about the only one.  The UK has not lost a national newspaper since Today and Sunday Business.  And every big regional newspaper and B2B publisher has stayed in profit, unlike the banks or the car industry.

Once the economy starts to bounce back, we will find that the structural change has not been that bad.  Here is an upbeat story this week, for example.  Champion media group in Merseyside, this week launched Crosby and Lytham Advertiser with a circulation of 30,000.  Last year they launched the Aintree Champion.  Free papers have suffered in the recession, but people are still opening them.

Finally, the Burton Trader, was closed a year ago by Trinity Mirror.  It was relauched this year by Chris Clarke, who runs a kitchen sales business in the town.  When the paper closed, he lost one third of the footfall through his shop.  The free weekly was very effective for him.  When it closed, he decided to reopen it.

 

Dominic Ponsford has been editor of Press Gazette for three years. He began his journalism career in the regional press working as district reporter for the Battle Observer and then as senior reporter/feature writer for the Evening Advertiser in Swindon. He is also journalist in residence at Kingston University

Written by Tim Dawson

March 28th, 2010 at 12:39 pm

Eric Gordon – The Camden New Journal

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A big company would not tolerate our modest return on capital, but it is enough to keep us going

  • To make a local newspaper work you need to understand your market – a shrieking tabloid will not prosper in a gentrifying area
  • You need to know where your advertising is coming from – a lot of public sector ads have migrated to the net
  • You should keep your cost base low – not least by keeping the pay differential small

I hate being called ‘founding editor’ of the Camden New Journal.  The paper was actually founded by a group of us.  The staff of the then Camden Journal was in dispute with the paper’s owners from 1979 to 1981 over the closure of the paper. Part of the settlement of that dispute was the sale of the title to us for £1.  Quite a lot of colleagues from the paper that closed volunteered to help us with the new paper after the closure.

Now we have a turnover of £2m a year and a staff of 30, despite the slump we are getting by.

The paper was launched in 1982.  We did not go to the GLC for a grant initially – I expected the business to fail, and I did not want to waste public money. So we went to the bank and applied under the small business scheme for a £50,000 loan, guaranteed by the Government.

We were established with help from the Co-operative Development Agency.  It created the touchstone of the CNJ. The paper’s core philosophy is a belief in the common ownership of land, commerce, and industry.  That is still part of its constitution.

Lots of organisations go under the mantra ‘not for profit’, but there is no such thing as not for profit.  You have to make a profit to survive.

What differentiates the CNJ and its sisters from the big groups is the level of profit.  The big newspaper titles were making returns of upwards of 25% on capital.  As profits have shrunk, they have done the inevitable, drastically cut costs.  In the good years, the CNJ makes 10 – 13% return on capital.  Now we make around 5%. We keep our costs low, and it helps, of course, that we don’t have a managing director earning £60 – £70,000.

Journalists tend to make a lot of mistakes when setting up a paper.  There is no point in producing a tabloid for a gentrifying area.  The Islington Gazette, had a circulation of 28,000 in 1982, and now has a circulation of 6–7000.  It is a shrieking tabloid paper circulating in a gentrified area.  We established a paper in Islington a couple of years ago and are now doing pretty well.

You also have to think about where your advertising is going to come from.  Today, councils are putting public notice ads and job ads into the web, or in their own magazines. So we have lost the ‘sits vacs’ to the council.  Even large companies are doing exactly the same.   Traditionally, recruitment and public notice ads were charged at four or five times the price of display ads, so you can imagine what a difference this makes to revenue.

You should have an egalitarian pay structure. Our pay differential is not more than about two-and-a-half or three to one. It has been one of the factors in making the CNJ successful. It enhances the feeling in the office – we are all in the same boat.  It also constrains the wage bill.  The wage bill is important.  Economists decree that wages should not exceed 20% of a company’s costs.  We exceed that ratio, but that is because we are so small, and don’t benefit from economies of scale.

We made a lot of mistakes at the start. For example, we employed a national company to distribute the paper, but got rid of them after about 6 months.  And we were soon in the red.  We lost the initial £50,000 (which would be about £150,000 at today’s prices).  Then had to seek a loan from the GLC for a further £100,000.  But we were in the black by the mid-80s and repaid all our debts.  We developed physical assets as an anchor for the company. We bought our premises and two other properties.

We also obeyed that golden law of capitalism –  expand or die. So we opened up two other papers.   Today, we are managing, but it is because we can survive on a small net profit.  A big company would not tolerate our performance. They would close us down.  My only concern is that the paper is not sold off to a private company.  We have had overtures, but have never followed them up.

At the moment, we are trying to formulate a new form of ownership, because I can’t go on forever.  We did consider the idea of adopting the model of the West Highland Free Press which is now employee-owned.  We are also considering establishing some sort of charity to own the paper.

My sticking point, though, is that our commitment to public-ownership must be part of the paper’s constitution.

Eric Gordon is founder and managing editor of Camden New Journal, one of the first independent local London papers.

Written by Tim Dawson

March 26th, 2010 at 8:14 am