Monday, October 13, 2008

Econ 101: To preserve Gannett Blog after Dec. 31, I begin testing journalism's new business model

I'm now starting the time clock on an experiment illustrating the brutal economics of online journalism. Based on the long odds, I'll probably fail -- pushing Gannett Blog closer to its demise, and showing on a micro level why Gannett's survival is so threatened.

I'm looking for ways to earn about $24,000 a year from several sources to supplement my income, now that USA Today's severance checks are ending. A logical place to start: this blog, which in the past year has become a leading source of news and networking for more than 10,000 GCI employees and other readers each month.

My experiment opens a window on the reality of today's journalism finance: Can this blog generate enough revenue to support its continued publication? We're going to find out! Relying on two revenue streams -- ads, and a voluntary subscription fee -- I'll share embarrassing details of how much I earn in the months ahead. Starting today, you've got front-row seats to the launch of a 51-year-old journalist's second career.

Gannett Blog's big chill?
This is an imperfect test. There are no immediate negative consequences if you don't patronize my advertisers or pay for a subscription. I'm committed to editing this blog through Dec. 31.

But, I'm afraid all bets are off if I don't find sufficient income potential here by year's end. That might sound harsh, but it's true. At some point, I gotta start making money again. That could mean work that allows less time for Gannett blogging.

Over the weekend, I added two things: advertising, and a voluntary subscription fee of $5 per quarter. The advertising is Google-served text and image ads. Revenue accumulates automatically as readers click on ads. (Beware of click fraud.)

I'm collecting subscription money through the online payment system, PayPal. Please see the new "Donate" tool in the green sidebar, right. At the beginning of each quarter, I'll run a three-week pledge drive. I'm starting the first one today; it ends Nov. 2. My goal is to raise as much as $6,000 in subscription money.

Why odds are long
Compared to many blogs, I've got good traffic. My readers are well-educated and engaged; look at all the comments you write! Plus, I've basically got zero competition. All that suggests a blog primed for financial success.

Yet, publishers rarely sell enough advertising online to pay the full cost of putting out a news website with its own staff. In my case, I took in about $69 from advertising sales in the first 24 hours after I started publishing ads. True, do the math, and that clocks in at $25,000 a year. But the first 24 hours' sales must have been inflated by a one-time curiosity factor.

And as for subscriptions? Doesn't happen in the real world. Publishers have had a nearly impossible time charging readers for online news. One of the few: The Wall Street Journal, which now has nearly one million online-only subscribers, paying $119 a year for full access.

I met my editorial goals during the first year of publication. Now, I'm adding financial goals at a time when many better-resourced sites (perhaps including yours) are failing, putting so many newspaper jobs at risk.

But I enjoy blogging, and I've especially enjoyed watching this Gannett community come together here in the past year. I'd like to keep this chapter of my career going a while longer in my life, on Internet time.

Related: Why recessions are actually good times to start a business

[Image: my original USA Today employee ID badge and press card. It was made on my first day: May 1, 2000]

22 comments:

  1. Jim,

    Just curious: Did you explore becoming a 501c3 and adopting a business model in the style of NPR/PBS?

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  2. No, 12 a.m.; thanks! I think there are problems with going non-profit when the sole beneficiary is an individual in control. But I'll check into it.

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  3. Goodbye Jim! Time for reality. This is a good lesson for all you journalists. Don't bite the hand that feeds you.

    Gannett has been good to you and now you will see just how hard it is to earn a real living not depending on corporate America.

    Employees...take note!

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  4. Oh, please. This is a blogspot blog... No charge to maintain. This blog uses a standard template unaltered from the one offered for free by blogspot.

    It is accessed by an internet connection you would have if you didn't have the blog. No cost there.

    I hope you aren't paying for sources...

    The only "cost" to you is your time. It can't take more than an hour to to hours a day to play with your hobby.

    Get real.

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  5. Jim,

    You have been spending months ripping Gannett for trying to raise/save money and now you are threatening to kill the blog because you are dealing with the same issues. Kind of ironic don't you think? If Gannett had said "We will close down Cherry Hill if we don't raise enough money" you would have a field day with it. To bad your trip to Spain is over and now you have to live in the real world.

    PS

    My family is sort of cash and we are not going on vacation this year. It's called money management. You would think as a former business writer you would have understood that.

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  6. 10:07 well said.
    Makes me glad I still have a job and no matter how frustrating it can be, I am employed by a Blue Chip who in this day and age might actually be a survivor. I'm not kidding. I think Gannett is going to not only survive but come out pretty strong.

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  7. Assuming you don't generate much income here, I hope you keep the blog going into 2009, even if you only put in an hour or two a week to keep it alive. I mean why give it up entirely? Seems to be something you enjoy. But I have a couple questions, too.

    1. Why $24,000? What's the magic in that number?
    2. Pleeeeasssse tell me that Gannett didn't get to you and is somehow pressuring you to give up the blog. In other words, did they offer you $23,500 to stop publishing? Are they taking legal action and you need to recoup the costs?

    A paid Gannett blog doesn't interest me, not because of the fee or ads per set, but because it will get diluted and lose its edge in my opinion. But, good luck.

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  8. Maybe Jim, you should get a partner, to help you write and edit this blog.

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  9. The web, in its current form, isn't the answer for you or GCI's financial survival. Instead of trying to play catchup, or get onboard a train that has already left the station and is going nowhere, GCI should look to pioneer new technology and revenue streams. Simply converting newspapers to a web format is already an outdated and failed model.

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  10. @10:14 a.m. wrote: "Pleeeeasssse tell me that Gannett didn't get to you and is somehow pressuring you to give up the blog."

    LOL! Answer: No.

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  11. I think people are right...the blog might loose its edge if you feel you have to write for money. Not that I wouldn't pay, but I probably would only keep it up a quarter after I get canned, (Probably getting canned in Dec) which should be in March. I would have lost interest in Gannett and moved on to my next venture....

    So to think that you would be satisfactorly paid for your work...I think if I were you, I would consider looking elsewhere for income.

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  12. "Employees...take note!"

    Thanks for stopping by, Craig!

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  13. from 11:27...I was meerly suggesting that I wouldn't rely on the blog for actual income...not that he should discontinue it. I'm a very honest person in the way I see things. I like Jim (from what I know of him) and didn't want him to get caught up in an illusion that any income from this blog would be either enough or lasting.

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  14. I had $14 left in my PayPal account so that's what I sent in. I'll send in a little more later. You do important work. If you can possibly pull it off please keep it up.

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  15. 12:41 p.m.: That is correct; a blog aimed at a declining market (Gannett employees) does not have a future. My experiment with generating revenue is simply the next logical step in the evolution of this blog.

    What's more, I expect my experience in days/weeks/months ahead will be instructive for this community: We're all about to get an inside peek at the economics of blogging and Web journalism finance -- a subject of critical importance to Gannett, its workers and its shareholders.

    As I wrote in this post: "Starting today, you've got front-row seats to the launch of a 51-year-old journalist's second career."

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  16. I'm sure has many other plans besides this blog. Never been to SF but I doubt that the $24,000 wouldn't go far.

    Let him make some $$. It's obvious he has a product many of us value.
    He's open about it all, I think we will learn something.

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  17. It's not obvious that Jim Hopkins has a product of value, as one other poster noted.

    Now that there are $$ attached, we will see if there is indeed value, beyond that attached to those who can't wait to watch the train wreck... and those are the people who want "it" for free, because... well, it's the socialist way.

    Jim, good luck making a buck at it, and I say so because it's business venture.

    I don't agree with much of what's here. I do believe that at some level you have made Gannett a better company by forcing them to take a good close look at their current "flavor" of Kool-Aid.

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  18. Rotsa ruck.

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  19. I always enjoy the expert advice from the gutless, anonymous peanut gallery.

    First, regarding going non-profit: I don't think the problem is as much one person being in control (as long as that's disclosed) as it will be establishing a purpose to qualify. Also, there's the small problem of generating revenue -- being non-profit does not mean earning no money.

    Now, back to blasting the peanut gallery -- I had my monthly e-mail exchange recently with the usual dolt claiming it's "unfair" to blame the run-of-the-mill folks in the newsrooms.

    Wrong. I absolutely blame them, whether it's the lazy slugs who learned their first month on the job they didn't have to do any work and then proceeded to warm a chair for three decades, or the brainless trust-fund brats who got hired not because of their skill, but because they could afford to work several unpaid internships.

    Make no mistake: Even though there are many more prospective employees than positions, newsrooms are still packed with the lazy, the clueless, the moronic and the downright unethical sleazebags. So please: Either have the spine to post with an ID, or spare us the "pull yourself up by your own bootstraps" lectures.

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  20. I know that some blogs have organized annual (or semi-annual) "pledge drives" that focus reader attention on the fact that the author needs money. It's easy to ignore a PayPal button that's just hanging on a page, but pledge drives give you the opportunity to legitimately nag your users until they fork up the cash.

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  21. by the way, you're not the first person to come up with this idea. Chris Allbritton, a Columbia-educated, former AP journalist, pioneered this kind of thing about 5 years ago with his back-to-iraq blog. He managed to raise thousands of dollars to help support his reporting in Iraq, and he did it before blogging was 'in.' Hope you can emulate him. Good luck

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  22. I recently came across your blog and have been reading along. I thought I would leave my first comment. I don't know what to

    say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

    Betty

    http://www.my-foreclosures.info

    ReplyDelete

Jim says: "Proceed with caution; this is a free-for-all comment zone. I try to correct or clarify incorrect information. But I can't catch everything. Please keep your posts focused on Gannett and media-related subjects. Note that I occasionally review comments in advance, to reject inappropriate ones. And I ignore hostile posters, and recommend you do, too."

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