The winning business strategy builds on relationships

This blog entry was written for IJNet.org, Tips for Journalists in 2020  from other Knight International Journalism fellows.

The losing strategy that seeks mass audiences and mass advertising as measured by unique users and page views has led many media to chase clicks with ever-more sensationalistic content about celebrities, sports figures, imprudent politicians and sex scandals.

Those sites will continue to lose revenue and audience to the search and social platforms, as well as credibility and trustworthiness.

If you build a relationship with your audience, they are more likely to become loyal, to trust your work, to recommend your work, and to be willing to pay to support your mission. The total audience will be smaller, and the percentage willing to pay for your content might be in the single digits, but this public-service, user-focused strategy builds trust and credibility for the long term. Examples are Mediapart in France, eldiario.es in Spain, Animal Politico in Mexico and The Texas Tribune in the U.S.

Versión en español


Here’s a tip: build your email subscriber list. This way you own a relationship with your users, and you can avoid using the search and social platforms as an intermediary. Tailor newsletters for these email subscribers according to their interests and tastes. Other examples of relationship tactics include crowdsourced stories, face-to-face and online events, reader polls, crowdfunding and WhatsApp and Telegram group chats. Read more, in Spanish, about how two websites are monetizing their email newsletters. 

Related:

Why most publisher paywalls are destined to fail
Publishers pivot toward users and credibility

Why most publisher paywalls are destined to fail

Picard: News organizations need to focus on creating value for users

Picard: Your content has to be exclusive and specialized.

Now that Google, Facebook, and other tech platforms have taken away most of their ad revenue, news publishers are realizing they need to get revenues from users to stay afloat.

Well, good luck with that. Most of the paywalls or freemium products they have created are doomed to disappointment.

Publishers will have trouble breaking their bad habits. They have been so busy delivering mass audiences to advertisers with increasingly frivolous or sensationalistic content, or delivering profits to investors by cutting key editorial staff, that they may not have the know-how or talent to produce content valuable enough that people will pay for it.

Smart money is betting on local, trustworthy news

This blog post started out as an explanation to my friends and family in Cleveland and Columbus, Ohio, why their local newspapers had become shadows of their former selves. Why their newspapers were so thin. Why news coverage was so shallow. Why they felt like they weren't getting their money's worth.

From trust to distrust in one decade. Pew.

And we will get there in a minute, but first, some good news. It was heartening to see the Knight Foundation's recent announcement that it was committing $300 million over five years to strengthen journalism, from the ground up, by focusing on local news and on encouraging collaboration.

 “We’re not funding one-offs. We’re helping to rebuild a local news ecosystem, reliable and sustainable, and we’re doing it in a way that anyone who cares can participate,” said Alberto Ibargüen, Knight Foundation president.

Gradually, civic minded individuals and organizations have realized that the loss of local news coverage threatens democracy and citizen participation. Citizens don't know what's going on, which leaves elected officials unaccountable for how they provide services and spend the public's money. “Reliable news and information are essential for people to make democracy work,” said Jennifer Preston, Knight Foundation vice president for journalism.

When government fails, 'business has to step up'

Businesses like to devote part of their marketing and public relations budget to promote how they are  giving back to society. We are not just about profits, they try to say. And the message is arguably true, not just propaganda, as far as it goes.

Fink, from BlackRock.com

But we are starting to hear a different kind of message from business people, and it goes like this:

"Around the world, frustration with years of stagnant wages, the effect of technology on jobs, and uncertainty about the future have fueled popular anger, nationalism, and xenophobia. In response, some of the world’s leading democracies have descended into wrenching political dysfunction, which has exacerbated, rather than quelled, this public frustration. Trust in multilateralism and official institutions is crumbling." -- Larry Fink,
(emphasis mine)

Business people will have to fill the gap left by polarized and paralyzed national governments: this is the message of Larry Fink, CEO of BlackRock, the world's largest mutual fund company. Businesses have to show that they have a higher purpose than just making money. And, by the way, it's in your own interest to do so, he says. BlackRock has used its position as a major shareholder of some companies to push for more socially conscious policies.

(More coverage of Fink's letter was in Bloomberg, Forbes, and Reuters, among others.)

Innovation studies go back to the future

Predicting the future has always been a dangerous business in the creative industries. As any economist will tell you, products like books, movies, TV shows, and music are "experience goods", which can only be evaluated after they are purchased or experienced.

Making predictions or recommending strategies is especially difficult now with rapid technological change disrupting every creative industry. This theme appeared in several of the presentations at the  Creative Industries and Media Management Conference held at the University of Porto, Portugal, Sept. 19-21. The conference was organized by Paulo Faustino of Porto and Nova universities.

--Michal Glowacki, professor of journalism at the University of Warsaw, presented preliminary findings from a study of the dynamics of organizational culture in public media that identified success factors in what he calls creative media clusters.

100 digital news startups in Latin America show paths to achieving sustainability

A new study of 100 digital news startups in Latin America by SembraMedia in partnership with Omidyar Network -- Inflection Point -- offers many clues to achieving the elusive goal of sustainability.

Extensive interviews with the founders -- 25 each from Argentina, Brazil, Colombia, and Mexico -- produced data that clarified the elements of successful business models and showed the best places to invest resources and training.

Janine Warner, co-founder of SembraMedia and an ICFJ Knight Fellow, directed the study, which was managed by her co-founder, Mijal Iastebner. (Disclosure: I participated in the study as an editor.) Among the insights:

• You don't need a lot of money to get started. 71% of the media in this study had startup capital of less than $10,000, but a tenth of those now generate at least $500,000 in revenues (p. 8). 
• Those that focus on business development do best. Those with at least one sales person reported median annual revenues of  $117,000; those with no sales staff had a median of $3,900 (p. 9).
• Women are playing a key role in development of new digital media in a region where men traditionally have held almost exclusive control of the industry: 62% of the 100 organizations  had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41).  
• Differentiation is key. In terms of content, technology, distribution, or style, these media positioned themselves as offering something different from traditional media and independent of political or business interference. In some cases, they exposed the cozy relationships between big media, politicians, and business (p. 25). 
• Even a small organization can have big impact nationally and internationally. Although these organizations had median staff size of 13 employees, 72% have had their stories picked up by national news media in their home countries and 66% by international media (graphic above).

Versión en español

Newsstand owner adapts to survive media crisis

Newsstand owner Jesus Erro: Publishers are fudging their sales numbers.

PAMPLONA, Spain - Those who study the business of media tend to look at it from the perspective of journalists and publishers. But the owner of a newsstand in the heart of this provincial capital has a different point of view.

Jesus Erro, 56, has owned and operated Caprichos Books and Stationery for the past 24 years. He has seen the good times and the bad.

For the first decade or so, sales of magazines and newspapers -- about three fourths of his business -- were strong. But beginning in 2008, with the combination of the financial crisis and the Internet's impact on sales of print products, the business has gone down steadily.

Versión en español

"For small shops in this industry, it's very difficult to survive. A few years ago, when there was a favorable economic climate, everything was straightforward, more or less. You never expected to make a lot of money but you did expect to make a decent income. But now with everything that has come along -- the Internet, the economic crisis -- Pffff. We are trying to make just enough money to survive in these kinds of shops."

"It's not students with smartphones but professors' teaching methods that are to blame"

I want to share with you my translation of a blog post (Spanish) by my friend and colleague Jose Luis Orihuela, a professor at the University of Navarra, author, and keynote speaker.

Orihuela is addressing a problem that faces many teachers and professors: they say their students are distracted by all the media on their smartphones and are not paying attention in class.

Don't blame the students, he says. Blame the professors.

"It has to be said again: the problem is not that the student is distracted by technology but that the professors have to change their methods and the content of their teaching.

"It's easy to place the blame on the students and their devices; the hard thing to do is redesign education to adjust to a culture of connectivity. You can't teach against the culture of the students. You have to build on top of it."

He mentioned a well publicized column by a professor in Uruguay who decided to throw in the towel rather than fight against students using Whatsapp and Facebook in his classes.

Orihuela went on, however, to says he encourages those teachers who are adapting and admires  those who are changing.

The real challenge isn't students using tech devices in the classrooms, but rather professors learning to be digitally literate.

In this video (Spanish), Orihuela elaborates on the topic:

Forget about the big numbers; go for loyalty, trust

Anyone who has studied the metrics of the internet in any detail knows about the Big Lie: those big numbers of total users and page views that everyone relies on are practically meaningless.

• More than half of the visitors to websites stay for less than 15 seconds. 
• Three-fourths of the users of the most important news sites in the U.S. visit only once or twice a month. How can you even consider them users?
• Half of the internet users in 26 countries are getting their news through social media rather than the originating news sites themselves, according to the Reuters Institute's Digital News Report 2016. 
• 43% of social media users don't know where the stories they read originally appeared.

Jon Slade of the Financial Times

In other words, millions of clicks or millions of users are not an indication of trust in a particular news brand or loyalty to that brand. We need new metrics, better metrics.

Versión en español

So it was heartening to see this reality affirmed by of one of the leading lights of digital media innovation, Jon Slade of the Financial Times, in an interview with Ian Burrell (thanks to NiemanLab for the lead):

“I've seen data recently that says that of all the pages on the internet less than 1% of them are from newspapers – the vast majority of time spent is with social channels and they are always going to be much bigger than you are – so if you’re trying to play a game of scale then you’re going to lose.”

There are only a few international brands that have even a slight chance of competing with the likes of Facebook and Google for the digital advertising dollars that are based on the number of eyeballs delivered to specific ads.

Spain's most successful digital journalism startup

In our search for the next big thing, we often overlook some of the steady innovators who grow organically without millionaire investors or crushing debt loads.

Alfonso Vara-Miguel of UNAV

One such example is El Confidencial of Spain (their slogan: "The preferred daily of influential readers").

This is a digital news publication whose value proposition for 15 years has been to offer quality news exclusives "that other media cover up or don't publish because of their overlapping political and business interests," according to researcher Alfonso Vara-Miguel, professor at the University of Navarra (in Innovación y desarrollo de los cibermedios en España, 2016, Eunsa, Pamplona, pp. 166-77).

Spanish news consumers are more skeptical of their news media than most (more on that below), so this independent-spirited publication, with a philosophy of spending no more than it takes in, has racked up some impressive numbers:

• advertising revenue exceeded US $9.9 million in 2014
• after-tax profits were US $1.3 million in 2014
• full-time staff numbered more than 100
• it averaged 735,000 daily readers in August 2015 (ComScore)

The value proposition is exclusive journalism free of political and business influence. 

Versión en español

Latin America spawns scores of innovative news sites

Latin America has spawned a rich breed of online news publishers who are challenging mainstream journalism. These digital natives have achieved significant influence by innovating with digital tools.

They often aim to provide an alternative to the traditional voice of mainstream media, which are usually linked to political and business interests that have long predominated in these countries.

"Digital-ness" of highly influential websites. 

These are among the findings of a new study of 67 native-born digital news publications by Ramon Salaverria of the University of Navarra (Spain) and Summer Harlow of Florida State University. The study, published in the journal Digital Journalism, is an ambitious effort to measure the innovation, influence, and goals of these 67 digital natives -- "Regenerating Journalism: Exploring the 'alternativeness' and 'digital-ness' of Online-Native Media in Latin America".

And while the scholars have not set out to create  a viral listicle a la Buzzfeed, they have created two tables in their article with fascinating detail, one of which I have condensed (at left).

The rankings of "digital-ness" are based on measurement of each site's use of multimedia, interactive elements, and degree of audience participation. All 10 listed here were rated as "highly influential" by the researchers, based on measuring their per-capita Facebook and Twitter following and their global ranking in the Alexa audience measurement service.

Versión en español

Media innovators inspire hope around the world

A year ago I wrote an article about digital media startups around the world and attempts to categorize and analyze them. Some of that material is now a bit dated, and I have come across some other analyses and lists that have good road maps for media entrepreneurs.

The Open Society Foundations has sponsored a series of studies. One of them is Publishing for Peanuts: Innovation and the Journalism Startup, by JJ Robinson, Kristen Grennan, and Anya Schiffrin of the Columbia University School of International and Political Affairs.

The study takes an in-depth look at 35 "innovative media outlets" producing high-quality news that have a chance at long-term survival. Researchers have often neglected examples outside of Europe and North America, so this study included examples from South Africa, China, Brazil, Mexico, Colombia, India, Kenya, Nigeria, Egypt, and Bosnia Herzegovina, among others.

Jarvis's new role for journalists: be the organizer

Jarvis: think first of the community

Several years ago I was working in Belarus, a former Soviet republic, where independent newspapers have a hard time surviving. The government denies them access to state-monopoly newsstands, overcharges them for their newsprint, and harasses them at every turn.

We looked at one publisher's website data to see if he might have an opportunity to generate revenue online. Turns out the website's most popular page contained the community's bus schedules. And what's more, his community spent more time on that page -- 5 minutes, 30 seconds per visit -- than any other. This publisher, a journalist, was humbled to see that a simple list was more important to his readers than the journalism.

The Belarus example came to mind as I was reading Jeff Jarvis's new book, in which he talks about a new role for journalists: "Helping a community better organize its knowledge so it can better organize itself." 

181€ million to keep Catalan-language media alive

Front page of La Vanguardia, in Catalan

BARCELONA, Spain -- Americans are used to traveling thousands of miles within their wide open spaces and hearing only English, with variations of accent and expression.

But in France, Germany, Spain, and other parts of Western Europe, there are still regions of distinct languages and dialects preserved by geographic barriers, sedentary culture, and autonomous politics.

So it should not have been a surprise to find that an international media event in Barcelona, to which I was invited to speak, was conducted not in Spanish but in Catalan, that Romance language of northeastern Spain and southern France. Even Spanish presentations were translated simultaneously into Catalan. (Disclosure: The sponsors paid me an honorarium and my travel expenses.)

600 media in Catalan

But it was surprising to learn that there are nearly 600 media outlets in the Catalan language and that the government of the region has spent 181€ million (link in Spanish) since 2008 to prop them up with grants and advertising, according to a lengthy investigation by the daily newspaper El Mundo.

Students rack up media bills of $177 a month

"I never thought about how much I was spending on media. I just took it for granted, and now I realize that it is more than I would have imagined." -- student at Instituto Tecnologico de Monterrey, Mexico

Versión en español

I recently surveyed 22 students in a seminar on how much they spend on media every month. Bottom line, these students at an expensive private university in Mexico are spending the equivalent of about $177 a month on various types of media.

I asked them to include all kinds of media expenses, including those paid for at home by their parents. Many of these expenses were not part of anyone's budget 15 years ago:

• Internet at home and on mobile devices, mobile apps
• Telephone at home, mobile
• Movies at cinemas, on physical media, online, streaming, apps
• Television, on cable, on physical media, streaming, apps

Opportunities abound in business journalism

"Business journalism is a wonderful career".

Versión en español.

MEXICO CITY -- Francisco Vidal Bonifaz has worked as a business journalist in Mexico for three decades, and he sees lots of possibilities for growth in this niche.

There are not many journalists with training in this field, either in Mexico or other countries. And there are few media that are focused on the economy, finance, and business.

Vidal Bonifaz believes that there is room for new business media on the web, especially at two ends of the spectrum: in breaking news that covers the ups and downs of markets, and in longer pieces that explain the significance of these movements. "There is a story behind every number," he likes to say.

If he were creating a new digital publication, "I would eliminate all the stuff in the middle. No stories of 300 words. I would focus on the two extremes," he told me in an interview in Mexico City.

It's 1927, and the news media are out of control

Charles Lindbergh and his plane. (Library of Congress photo via Mother Nature Network)

Bill Bryson's book One Summer: America, 1927 captures a moment when the country's burgeoning news media feasted on the stories of two extraordinary men, Babe Ruth and Charles Lindbergh. The media made them into gods. The baseball hero basked in the attention. The aviator hated it.

If you can't bear the constant assault of 24-hour cable news, Buzzfeed, and Facebook updates, you should realize that America lived through a similar media explosion in the 1920s.

Then the mass media were newspapers, radio, talking pictures, phonographs, and the telephone. Thes media of the day hounded and entertained people on the streets, in their offices, in their leisure hours, and in the privacy of their homes. Sound familiar? The difference may be only a matter of degree. Today we carry the mass media with us on the devices in our pockets.

In the '20s, the new media were just becoming massive national, industrial-scale businesses that needed big stories to feed the news cycle.

Digital media: Amusing ourselves to death?

Gencarelli, Manhattan College Photo

Versión en español

Communications professors at Tec of Monterrey had a visitor last week, Thom Gencarelli of Manhattan College, who made us think about what we are teaching and how we are doing it.

Among the questions he left us with:

• In 1985, Neil Postman wrote that the dominant media of a culture in fact shapes the culture, is the culture (Amusing Ourselves to Death). In his day, Postman saw television as degrading all aspects of culture -- religion, literature, education, politics -- to a form of visual entertainment. So how are digital media defining and shaping our culture today? he asked. Are they degrading or improving it?
• Do the immediacy, urgency, and visual nature of digital media make us less capable of appreciating the culture of the written word? 

What venture capitalists like about Latin America

Versión en español.  

Venture capitalists in Latin America are looking for digital media startups with rapid growth, a plan for monetization, and international potential.

Francisco Coronel: digital media well positioned

Obviously, most new media don't fit that profile. But startups with these characteristics are starting to attract angel investors who provide the first rounds of capital, says Francisco Coronel, CFO and cofounder of Nxtplabs, an incubator of digital companies in Buenos Aires, Argentina.

Digital media have extra potential because there is a growing demand for content that these companies are positioned to satisfy at lower cost than traditional media, Coronel told me in an interview.

(Disclosure: I just spent two weeks at Nxtplabs training three digital media teams under a contract with the International Center for Journalists.)

12 revenue sources for digital news organizations

Versión en español.

So much innovation is occurring on the revenue side of new digital media that it's time to review, update and aggregate. Some of the material has appeared in this blog before. 

Let´s start with the basics.

1. Create community, don't just publish news. An audience is just a group of observers.  A community shares values and a deep interest in a topic or geographic area. It often has a bias toward action. That is where value comes in.