Exclusive Content + Perks = Good Subscription Package

It’s refreshing to see a newspaper looking for online subscription revenue approach the problem creatively. Rather than building a “pay wall” around the news they’re already giving away, the Pittsburgh Post-Gazette has just this month launched PG+, a premium tier with exclusive blogs, videos and sports coverage, as well as lots of members-only contests and deals with local merchants and advertisers. It costs $3.99 a month, or less if you buy a full year at a time. (They’ve also built a very effective online tour and sales pitch for the product.)

So far, it seems to be football that’s driving the “most read” stories list on PG+, not too surprising in Pittsburgh in September. And one could make some other quibbles: Why doesn’t the site have its own URL? But this is a great experiment to watch. If publishers want to grow their online reader revenue, it’s new products, not carving up old ones, that are going to provide the real wins.

The Truth About Citizen Journalism

In the midst of an interesting roundup about how local newspaper sites might showcase local bloggers, Simon Owens has some great comments from Tony Pierce of the L.A. Times, including this one:

“For the most part, this whole citizen journalism concept is fine for about three or four people per town, but that’s about it,” he said. “And most of those people are not journalists for a reason. Either they’re crappy writers or they’re crazy, which makes for sometimes interesting blog posts, but is that something that a major newspaper would link to?”

In the abstract it sounds like a great (and cheap) idea to populate a local news site with a feed of local blogs – but unless someone is picking those “three or four” people who really know what they’re talking about, the aggregation itself isn’t much of a service.

Another Scary Online-Only News Business Plan

Earlier this week, All Things Digital at The Wall Street Journal posted an interesting spreadsheet that tried to answer the question: What would your P&L look like with a 20-person local online-only news site?

Mark Josephson of local content aggregator Outside.in, the author of the spreadsheet, concluded that with very aggressive traffic assumptions, lots of help from third-party sites, and most inventory filled as remnant space by ad networks, you could have a margin of over 40%. Not bad. However, the fact is it’s a pretty small business overall — $6 million in revenue total, and only $1.4 million of that sold locally by a sales staff.

You could argue about some of the assumptions (especially what look like optimistic traffic numbers), but the fact is, Josephson is right. If you are building a local online news business from scratch, and you are only thinking about selling traditional banner inventory as your revenue source, any spreadsheet you do will look much like his.

Here’s the question: If you had a site like the one in the spreadsheet, with 40 million monthly pageviews, that would mean you have to be in a fairly large city (Dallas maybe? the local news site there probably has about this traffic level). If you were in a city that big, with that visible a site, why would you settle for $1.4 million in local ad revenue, when the market of local ad dollars is so much larger? Why have a local sales force, if all they can sell is banners?

Local advertising spending overall is down recently, like everything else. But everyone I’ve spoken to who has tried to sell to local advertisers recently tells me that even now, they are more than willing to try new opportunities if they’re creatively packaged and affordable. They may not want to be in the local metro daily (since it’s probably declining in readership, drab, and overpriced). But they still need to generate customers. They’re willing to try everything from Web ads to local weeklies, coupon books, event sponsorships, e-mail marketing, merchant directories, SEM. If you want a chance at a serious and prosperous local media company, you’ll need more than a busy Web site — you’ll have to build up a much richer range of channels and solutions for advertisers.

The opportunity is there for a local media company to be the authority on how to target customers in that market, via whatever channels local merchants want, whether it’s print, online, event sponsorships, e-mail, or access to a deep and proprietary local marketing database. Not that it’s easy to do, but it’s the only way to get away from the “little business in a huge market” suggested by the Josephson spreadsheet.

Some Sunlight on the Local News Scene

I try to look at every new local news/information site out there – blogs, wikis, newspaper sites. First, because I once thought of starting a business in this area (I still do now and then, but then I lie down and it passes). But second, because so many local news sites are so bad, depending on repurposed, stale newspaper content, sporadic blogs, or hole-ridden databases of local information, stores and vendors. I’m always looking for someone who has taken a fresh look at the problem of creating a genuinely useful local site.

Here’s one that works: Richmond Sunlight. This site consolidates and organizes everything you might want to know about the Virginia State Legislature – not just a news blog, but a database of every single bill on the legislature’s agenda and where it stands, as well as every legislator and his or her activities. You can search for a specific bill, easily find all bills on a particular topic, or get a customized RSS alerting you to every bill a particular legislator sponsors. Of course, there are also ongoing discussions of the merits of particular bills (see this furious exchange on dog tethering). Best of all, it’s all pulled together in a simple, appealing and immediately understandable interface.

What’s the business model? It’s a nonprofit, started by a local blogger but now owned by the Virginia Interfaith Center, staffed (says the site) with volunteers. Does that mean this isn’t relevant to a for-profit local news business? Not at all. Far too many local sites are depending on producing news — as in articles. Instead, they should be trying to build local tools – on local issues, real estate, business, stores, events – that people will depend on for all sorts of business and personal reasons. What’s appealing about this site – a deep and integrated database, exceptional ease of use, and a clear focus – could be part of anyone’s local information business, maybe especially one where you’re trying to make money.