Manage your operation with the language of numbers

IJNet has recently launched its Media Entrepreneurship Toolkit to help journalists make their own projects financially sustainable.

My contribution was an introduction to some of the basics of accounting and budgeting.

Some of the key points to keep in mind:

• There are some free online budgeting and accounting software packages that can organize your financial information for you.
• If you are just starting out, make a list of all the monthly expenses you think you might incur.
• Consider the possibility that you might use inexpensive or free digital tools at the beginning to keep costs down. 
• Make sure you know how much you are spending each month. This is called the burn rate. If you don't bring in any more money, how many months do you have before you run out of cash?
• Digital advertising is unlikely to produce much revenue for a small startup. Consider sponsorships, native advertising, donations, and other sources. 

There's nothing to be afraid of. Even English majors can learn how to do the basics.

Versión en español

Other articles in the Toolkit are by Jeremy Caplan, Director of Teaching and Learning at CUNY's Newmark Graduate School of Journalism in New York City:

What to do if your startup fails
5 ways journalism startups can engage an audience
7 challenges to overcome in launching a startup
Qualities of successful entrepreneurs

The dirty words journalists have to say without blushing

The following text is a translation from the Spanish version of a lecture I gave at the University of La Sabana in Bogotá, Colombia, on Aug. 22.


My lecture, in Spanish, starts at the 6-minute mark of the video.

Journalists today have the opportunity to create the future of the industry. But to do so, we have to change some of our long-held beliefs and attitudes. We have to create new business models (O, those awful words!) and learn to say some words without blushing.

This need to change comes about because of the nature of our profession, which for most is a vocation. As journalists we have to keep our distance from political and business interests to maintain our credibility. Still, as a group we can be arrogant, self-righteous and holier-than-thou (I include myself in this criticism). We tend to view ourselves as high priests of an exclusive profession and bearers of a special ethical standard that few others can live up to. We see ourselves as purer, more objective, less affected by the prejudices of the mere mortals we cover.

That is at least part of the reason we have trouble in the new world of entrepreneurial journalism, where we can start and run our own news operations. If we want to go out on our own, we have to recognize for the first time that journalism is a business and that someone has to pay the bills. All of this involves getting our hands on the first dirty word: money.

1. Money. The very word makes us cringe because we associate it with dirty things like influence peddling, lobbyists, bribery, corruption and other topics of our investigative journalism.

But money is the fuel that drives any journalism organization. Without money, journalists can't be paid a decent salary. They can't buy a house, clothing, food, medicine. Without salaries for talented, experienced people, there is no high-quality journalism.

How Talking Points Memo has converted from an ad model to paid subscriptions

Readers now supply more than half the site's revenue.

Josh Marshall started out as a political blogger in 2000, made a business of it in 2003, won a George Polk Award, and has managed to stay independent through all the wild swings of the digital pendulum.

So his reflections on how to transition from an advertising business model to paid subscriptions have a certain authority.

He talked about the evolving business model of his site, Talking Points Memo, in a 47-minute podcast with Digiday Editor Brian Morrissey. Among Marshall's observations that are relevant to other would-be news entrepreneurs:

• Small, independent news sites cannot rely on scale to drive revenue. They need a strong relationship with their users. Many digital media organizations that have massive audiences will not be able to make the transition to paid subscriptions because they don't have that relationship, he believes.

• Many of the 26,000 paid subscribers to TPM, which are now supplying just over half the site's revenue, pay because they support the mission of the publication, which "draws on readers' knowledge to break stories." The sales pitch for the $50 Prime product is that you get "warm, fuzzy feelings from supporting independent journalism".

2018: Credibility will be the new currency for journalism

An organization I work with that promotes development of independent media in Latin America, SembraMedia.org, recently asked me to make some predictions for 2018.


I really had just one: Credibility will be the new currency of journalism in 2018 and the years to come.
 

But to explain, here are that prediction's corollaries:



1. Independent media--those based on serving the public rather than turning a profit---will grow in importance through revealing corruption and holding authorities accountable. There are many examples. In the U.S., organizations such as ProPublica and Texas Tribune; in Spain, eldiario.es; in Peru, OjoPúblico; in Colombia, Connectas and La Silla Vacía; in Mexico, Aristegui Noticias and Animal Político; in Argentina, Chequeado; and hundreds of others around the world.


2. These independent media that serve the public first rather than political or economic interests will gain credibility by challenging the powers that be. That credibility will have economic value that will be monetized through support from NGOs, foundations, consumers, wealthy donors, and service-oriented organizations.


3. Journalism will continue its transformation from a business to a public service, and traditional media that view journalism as a business will accelerate their own decline. The traditional media's focus on maintaining profit margins will cause them to continue gutting their staff, their products and their services. They will have neither the will nor the means to make the needed investments in personnel and technology to transition to the world of multimedia, interactive, multiplatform, interactive journalism. (There are a handful of exceptions.)

Journalists and sales: don't sell your soul

Over the past several years, I have written a number of blog posts about how journalists can get involved in sales and marketing without violating their ethical standards or damaging the credibility of their publication. Here are a few of them.

1. Journalists selling ads: think of it as a fair exchange

When I was going through the transition from editor of a business publication to the role of publisher, I dreaded sales calls with clients.
"It meant I had to ask clients for money, which was a new and uncomfortable experience. The hilarious irony of this is that, as a reporter and editor, it was my job to ask people much tougher, more-intrusive questions, and I did it with no problem -- grieving parents about the death of their child, a political candidate about his sexual escapades, a business executive about her salary.
How tough could it be for a former reporter to ask an advertiser for money?

Women are making their mark in digital news startups

Women are taking a leadership role in the development of digital journalism in Latin America, according to a new study of 100 startups.

The study, Inflection Point, by SembraMedia in partnership with Omidyar Network, offers many clues to achieving the elusive goal of sustainability for new digital media.

Click to enlarge.

One clue is that women have the skills and experience to lead the way: 62% of the 100 organizations in the study had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41 in the PDF version).

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.

"This finding suggests that women are taking advantage of the low barriers to entry in digital media startups to go around the glass ceilings of traditional media and build their own publishing companies," wrote the directors of the study, Janine Warner and Mijal Iastebner, who are also co-founders of SembraMedia. (Disclosure: I worked as an editor of the study.)

Versión en español

'Know your clients, give them what they need'

Ingelmo: "Clients don't want to wait three hours for a graphic."

Manuel Benito Ingelmo has blended his knowledge of data, technology, and journalism to establish a news service with some of the biggest media in Spain as his clients.

His data-visualization service, Porcentual.es, just finished its most successful year, and Ingelmo continues to innovate and improve his products.

He and a team of two programmers have developed software that pulls data from public databases and produces graphics in minutes for media organizations to embed in their web pages. They can also customize the data geographically so that a newspaper in the city of Seville, for example, can get the latest unemployment figures for its area.

"We're very fast," Ingelmo says. "Speed matters. Our clients don't want to wait three hours for a graphic. They want it right now," he told me recently in a Skype interview from his home in Vitoria, northern Spain.

Media value lies in relationships, not scale

Amid all the news about how Facebook and Google are devouring the world, I would like to sound a note of optimism for digital news media. But first, let's acknowledge the bad news.

It is true that the munch munch munch you are hearing is the sound of the Internet giants biting off big slices of the digital advertising pie. However, much of that has been at the expense of traditional news media. There is an opportunity for digital-only news media to fill the gap in local coverage.

In the short term, this is not something to celebrate, since the decline of newspapers in particular has led to a big loss in watchdog journalism on the local level. The chart below, which has been published widely, shows the rise of Facebook and Google's advertising revenue concurrent with the decline in newspaper ad revenue.

With information from Thomas Baekdal @baekdal and Ben Thompson @benthompson of Stratechery.com.

Media entrepreneurship takes hold at universities

Journalism professors are adapting to the realities of a historically tough job market. Their graduates are struggling to find stable work in an industry whose biggest players have been cutting staff for a decade.

So universities are teaching new skills -- multimedia production, community management, data management and visualization, among others -- as well as the traditional reporting, writing, and audivisual production skills.

They are also finding new business models. While the traditional media companies are hamstrung by mountains of debt and declining revenue, universities are stepping up to innovate and create new forms of journalism for the digital age.

A Facebook group for those interested in teaching media innovation and entrepreneurship has reached 800 members. And the City University of New York's Graduate School of Journalism is about to hold its third summit for educators in this growing field on July 15. Jeff Jarvis and Jeremy Caplan have been leaders in this field. I participated in the first two summit.

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

From Poynter, 25 ideas for nonprofit newsrooms

Note: This blog post from Poynter Institute is used with permission. I think it is a particularly well stated summary of key points digital news entrepreneurs need to keep in mind. A Spanish version was translated by Ética Segura of the New Journalism Foundation of Iberoamerica. - James

Diversify revenue streams. Train from within. Make the most of metrics. Sometimes the simplest ideas can be the most effective.

A small group from Poynter visited a dozen nonprofit and for-profit news organizations in 2015 to gather information to share at this week's Nonprofit News Exchange. Here are 25 ideas, observed at many of the places we visited, that anyone can apply to his or her own newsroom.

1. Know your mission. As you build your team, look for staffers that buy into your mission and keep communicating the big point of your venture clearly. This is an advantage startups have over legacy outlets attempting transformation and struggling to bring staffers along.

2. Start with a fresh idea. A good editorial concept, fresh and serving an unmet audience need, is critical. This will need refining as you go along, but what you are doing needs to stand on its own or no amount of tweaking will save it.

3. Train from within. Data journalism specialists are critical to generating high-impact investigative stories but might be hard to find or pay for. Look for opportunities to train your own employees and allow them to expand their own expertise and skill sets on the job.

Universities are driving innovation in media

The true role of universities has always been the improvement of society. Developing leaders is a key part of that.

The scholars of universities immerse themselves in the values, ethics, culture, and history of a society and then communicate it to the students.

Those of us in the humanities tend to think of innovation as something that happens outside, in the world of business, especially in the digital world. However, courses in innovation and entrepreneurship have started to take hold in schools of communication.

Versión en español

Beyond commercialization

For academics, who seek knowledge for its own sake, there is something slightly perverse or unclean in considering their work from the point of view of its application in the business world. But innovation goes far beyond mere monetization.

Innovative podcasts and the future of journalism

Olga Ruiz: Create something unique.

PAMPLONA, Spain -- In August of 2013, Olga Ruiz returned from a refreshing summer vacation ready to start her 16th season on the COPE radio network in Barcelona.

But on her arrival, the managers told her and her team that they were being fired. "The best period in my professional life began the moment they fired me," she told me. "They gave me a second life in journalism."

Two weeks later, she invited her old team and some other journalists to her home for dinner. They decided to launch a new radio organization with long-form stories of up to 30 minutes on topics ignored or treated superficially by mainstream media. They would devote obsessive attention to the quality of the sound.

Versión en español

An investigative journalist who thinks like a capitalist

Martin Rodriguez Pellecer of Nomada

SAN JUAN, Puerto Rico -- You usually don't hear an investigative journalist talk about the importance of learning business skills.

But that is the case with Martin Rodriguez Pellecer, 32, founder of two notable digital news media organizations in Guatemala, Plaza Publica and Nomada, the latter launched last year.

Versión en español

"The most difficult thing for a journalist is to think like a capitalist, to realize that you have to invest and put money on the line", he told me in an interview. "You have to be flexible; you can't wed yourself to just one thing. You have to have lots of eggs in different baskets. No successful capitalist has just one line of business; all of them have lots of businesses." 

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.

Handful of data journalists shake up Mexican Congress

The truth hurts, especially when the truth is contained in receipts from bars, hotels, spas, and luxury vehicle dealers.

Israel Piña, from Quien Compro website.

A group of five young Mexican journalists has spent the past year or so sifting through thousands of expense reports of Mexico's senators and deputies (congress) to see how they are using taxpayers' money.

Among their scoops:

• Members of the Senate bought 10 Harley-Davidson motorcycles at a cost of 2.12 million Mexican pesos, or about US$130,000, in order to serve their constituents better. 
• Senators spent 43,800 pesos on 210 bottles of wine, or US$2,700 in a four-month period.
• One senator bought a loaded Yukon Denali SUV for 890,000 pesos, or $60,000, for the use of an obscure agency whose purpose is to "do studies to help the Congress make decisions." The senator declined to respond to numerous requests for comment. 

Cartoon that accompanied the Harley-Davidson exposé.

Versión en español

These journalists, led by Israel Piña, 33, were doing the investigative work in their spare time, for nothing. So they were surprised that their reports attracted enough attention that a year ago, television stations and major print media outlets -- including El Universal newspaper -- began paying them for their content.

They were providing a kind of investigative journalism that no one else was doing. Typically, political reporters in Mexico spend their time covering the pronouncements and accusations of the political class. It is very much inside baseball. They don't do much basic research using public documents.

Laid-off journalist finds niche in data visualization

Getting laid off is not always a bad thing for a journalist. In the case of Manuel Benito Ingelmo, it created an opportunity for him to develop something he had been thinking about for a long time.

Manuel Benito Ingelmo. Photo by Villanueva.edu

He was a business journalist in Salamanca, Spain, with an interest in statistics and data visualization.  He felt that print newspapers were definitely on the way out, he told me in an interview via Skype.

"I wanted to make the jump to a digital publication but I did not want to do the same thing as we were doing on paper."

Versión en español

So when he was laid off from a small daily in 2012, he took his severance package and began to experiment with how to take advantage of the strengths of digital media -- interactivity, instantaneous publication, potential massive audience -- to create a journalistic product or service that would build on databases that were already available.

He and a handful of partners started out by giving away simple graphics on unemployment to media organizations. His idea was that these organizations could use these graphics instead of stock photos of people in unemployment lines. "In just two or three months, we reached 100 media organizations throughout Spain. We found that there was a market niche, the possibility to sell something. Then we had the problem of how much to charge for the service."

'Desktop is the new print' as public goes mobile

Julio Alonso, director general WeblogsSL (James Breiner photo)

BURGOS, Spain -- In 2004, management consultant Julio Alonso got the itch to write about gadgets and technology. He started a blog and a year later that evolved into the website Xataka.

Since then he and his partners have built WeblogsSL, a community of 36 websites in Spanish with more than 13 million unique visitors a month. The sites focus on autos, lifestyle, business, leisure, and technology.

They have survived the global financial crisis, which hit particularly hard in Spain. And they have expanded their websites to Mexico and recently Colombia.

(Versión del blog en español)

However, Alonso, 45, struggles with what to do about the latest tsunami of change. The audience has flooded to mobile devices and advertisers are going with them. He has more than a decade of experience in the business of digital media, and an international perspective, having studied in Holland and worked in Brazil and Italy, among other places.

Still, he and his team have their doubts. "The question of how we should migrate to mobile is crucial. We have internal debates about whether the mobile users read in the same way as desktop users, if we have to provide the same contents, if the way we slice up the articles should be different. The times when they consume are different. It is not the same to be seated at a desk at work or at home as to be standing on a commuter train looking at a smartphone."

8 practices of successful entrepreneurial journalists

Editor's note: This post was updated 3 June with an eighth best practice.

For the last seven years I have been interviewing and profiling successful entrepreneurial journalists in various countries of various  socieconomic classes. I've talked to publishers and editors with staffs of as many as a hundred as well as some one-man/one-woman bands.

The ones that survive and thrive after several years share some common practices:

1. They develop multiple sources of revenue. They embrace sponsorships rather than advertising, memberships rather than subscription paywalls. They recognize that they can't make money on standard cost-per-thousand or cost-per-click advertising rates. They seek sponsors who embrace their mission and core values. They monetize their audience by creating clubs or groups of members who support their journalism mission. They can actually charge much more than a subscriber would ever pay.

Among other revenue sources: direct sale of products such as books, music, clothing; creation and management of websites and social media channels for third parties; creation of content for blogs and websites; consulting on digital media; sale of data; foundations; events; crowdfunding; and more (12 revenue sources for digital media organizations).

2. They build communities around high-quality contents. They satisfy a need of their users or help them solve a problem. Eldiario.es of Spain has created a type of club of 10,800 partners who pay 60 euros a year and receive certain benefits, such as access to articles a few hours before non-partners. However, access to the site is free, so what they are really paying for, says founder Ignacio Escolar, is to support high-quality watchdog  journalism that is free of political influence. Although these users represent only 2 tenths of 1 percent of the 6 million monthly users, they are enough to provide 570,000 euros and a third of the annual revenues (his financial report to readers, in Spanish). The site has a staff of 40, and growing.