Wednesday, October 31, 2007

A Sustainable Business Model?

Last week AdWeek featured an analyst report from Deutsche Bank that was positive on urban daily newspapers. Analyst Paul Ginocchio expects a return to profitability but not until 2012. Since newspapers have seemed to be an endangered species for the past several years, even that level of optimism caught my attention.

When I read it, I was even more intrigued. His prediction is based on outsourcing and continuing “to wring costs out of their operations.” Ginocchio wasn’t very sanguine about newspaper websites, pointing out that users spend just 41 minutes a month on newspaper sites.

A press release issued today by the Newspaper Association of America says that figure grew to 43 minutes per month in the 3rd quarter of 2007. They add that 59 million people, 37.1 percent of active Internet users, visited a newspaper site in that time frame, up from 56.9 in the 3rd quarter last year. Page views increased from 2.5 to 2.8.

Those stats are in line with the view that websites represent the future of newspapers, not print, no matter how many costs they wring out. But I’ll let others argue that if they wish. I’d like to report on a genuinely innovative newspaper business model that I ran across recently.

BostonNow debued in April 2007. It’s the brainchild of Russel Pergament, “a print guy” by his own admission. He’s also an expert on local print—the founder of the Brookline-Newton Tab and the founding publisher of Boston Metro. And he has a new hybrid business model in mind. He says that:

the marketplace has gotten ahead of the newspapers. All of them. That the arrival of our social media, coupled with the fragmentation of media and the personalization of media, has created something different, and the same old thing is not reaching people the way it used to. Hence our hope, our kind of struggle, to define with our reader[s’] input this new channel.

The print version, especially, represents a departure from the content of other local dailies, most of which consists of news bureau feeds. BostonNow employs real reporters and they do investigative reporting. Russel proudly shows articles like the rat one, many of which are later picked up by the two large dailies in Boston.

But it is the web version where the new model is being revealed. Looking at the top section of the home page, it’s not too different. You really begin to see the difference when you look below the fold. News items are tagged (there’s a tag cloud at the bottom of the page) and readers are invited to share their own articles post to a blog. BostonNow’s commitment to reader involvement shows clearly in their invitation to join the morning editorial conference.

Blogs are a key to reader involvement. The staff was smart enough to know that few members of the general public have their own blog, strange as that seems to many of us. But the person on the street doesn’t have a blog, hasn’t commented on a blog post and may barely know what they are. BostonNow’s Interactive Media Director Susan Kaup and her assistant visited libraries and neighborhood centers, teaching people to blog. That effort seems to have borne fruit.

Russel Pergament will tell you that the integrated business model is not yet clear in his own mind. He’s working it out with the help of his readers! That’s a real step forward for a hybrid print/Internet business model—one that may just prove to be sustainable, not only in terms of profit but also in terms of reader engagement and a valued role in the community.
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