November 23, 2014

New Business Models

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The ongoing goal of the New Business Models for News project is to inform the discussion about the future of news with business specifics — experience, facts and figures. After months of research and analysis, we have created business models that we believe demonstrate there is a sustainable future for local news.

For the purpose of our models we utilized data from a top-25 metro market and hypothesized that the sole daily newspaper had ceased publication. We began with the assumption that there will continue to be a market demand for quality journalism and that the market will find a way to meet that demand. So, what will fill the void?

We posit that no single company or product will replace the metro daily newspaper. Instead, an ecosystem made up of many players operating under many models and motives will emerge. In that context, we created models for hyperlocal sites serving different sized towns or neighborhoods, a metro-wide New News Organization (NNO), and a company that would supply the supporting infrastructure – or Framework – that the new news ecosystem will likely need. We also researched and modeled a not-for-profit local news organization that could be supported by public funding.

Although these genericized models are backed up by extensive, well-documented research, they are but one possible view of the future. They represent a stake in the ground. Clearly, our models cannot address the specifics of every individual local market. That’s why we invite you to download our spreadsheets and plug in your own assumptions. You can make changes to all fields highlighted in green: raise or lower advertising rates, increase or decrease staff, revise whatever you like. When you open the individual models, please look at the bottom of the spreadsheet and click through all the sections to see more detail. (Note: Changing data in fields not highlighted in green will break the formulas.)

Here are the latest versions of the New Business Models For News, which have been revised based on feedback received at a number of presentations and workshops.
(Models updated February 17, 2010)

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Hyperlocal and Ecosystem Framework Models
Hyperlocal sites are the building blocks of the new news ecosystem. In these models, we break out financials for sites serving smaller markets (20k, 35k, 60k) — towns, neighborhoods or areas of interest — within our sample top-25 metro market (pop. 5 million). We model the hyperlocal sites both as stand-alone entities and also as part of a larger sales, support, and technology infrastructure that we believe is necessary to optimize businesses within the ecosystem. We project that an organization that enables advertising networks and provides other services to support the local news ecosystem is both a sustainable business (we model it here as the “Framework”) and will make individual hyperlocal news organizations more profitable.

DOWNLOAD HYPERLOCAL MODEL

• Google Docs Spreadsheet
(Make changes: File>>Make a copy or File>>Export.)

• Excel Spreadsheet

• Business Plan Summary

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DOWNLOAD INTEGRATED HYPERLOCAL-FRAMEWORK MODEL

• Google Docs Spreadsheet
(Make changes: File>>Make a copy or File>>Export.)

• Excel Spreadsheet

• Business Plan Summary

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New News Organization (NNO) Models
In the absence of a metro daily newspaper, this model envisions a new, metro-wide news organization serving a market of 5 million people that operates on a smaller scale, yet still provides wide local coverage. The NNO will produce original beat and investigative reporting and will also work collaboratively with other sites as well as individuals in the ecosystem to add value. Although advertising remains the key source of revenue, new business-to-consumer and business-to-business revenue opportunities will also be developed. In addition, since many current news organizations are exploring subscription, metering or micro-payment options, we also developed a New News Organization model that includes a paid content component.

DOWNLOAD NNO MODEL

• Google Docs Spreadsheet
(Make changes: File>>Make a copy or File>>Export.)

• Excel Spreadsheet

• Business Plan Summary

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DOWNLOAD NNO PAID CONTENT MODEL

• Google Docs Spreadsheet
(Make changes: File>>Make a copy or File>>Export.)

• Excel Spreadsheet

• Business Plan Summary

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Not-for-Profit (NFP) News Organization Model
Given the number of promising not-for-profit local news organizations that have launched throughout the US recently, it is likely that publicly supported journalism will play a role in the new news ecosystem. We conducted research within our sample metro market and created a model based on the estimated funds that could reasonably be generated in support of an NFP news organization.

DOWNLOAD NFP MODEL

• Google Docs Spreadsheet
(Make changes: File>>Make a copy or File>>Export.)

• Excel Spreadsheet

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