So, the question, posed by Paul Bradshaw (and be sure to check out the Seesmic thread as well) is as follows:

“How do you financially support journalism online?”

Of course, as is my habit, I’m going to have to sharpen that question up a bit, lest I fall prey to the temptation to speculate wildly about the future of major metro newspapers and their finances, as I’m sure I’ve done in the past.

So let’s get specific.

Here’s what I’m not interested in talking about:

Whether the current online revenue of a giant newspaper could support its newsroom staff.  I think that’s an apples/oranges problem.  Shutting down the press is not a hydraulic maneuver — it does not occur in a vacuum — it affects brand and upsell revenue and staffing and all sorts of parts move and grind against each other when you flip that switch on a large scale.  So, looking at two columns in a spreadsheet and saying “oh, they match” is a bit simplistic for my taste.

Great, so, moving on.

Well, wait, not yet.  One more thing to get out of the way:

I’m not (that) interested (today) in trying to figure out what revenue, then, will support major metro newspapers online.  When a major city loses its last print edition, it will be because it has already been replaced, in terms of reporting, advertising, commentary, and yes, journalism, by (mostly) smaller organizations.

And by definition, I expect a newspaper.com in a no-print city to look and feel infinitely different than it does now, to be a distributed news service, the sum of dozens of tiny parts, a portal to a wide variety of platforms where bits of news pushed out and pulled in.

(Right, so again, these are all the things I’m not going to talk about today. Right. Sure.)

My question, then, is how to support a small, agile, online-only news organization.

And that’s a much easier question to answer, isn’t it?

Let’s start with three obvious ways:

1. Local Advertising. What?  You thought online advertising couldn’t support online journalism?  Well, it all depends on scale.  If you’re building a community news site for a 10-square-mile area, you’re likely to find a set of local businesses that have never had an advertisement online before, and certainly not running on a news source that exclusively covers the area in which their most likely customers live.  A combination of banner ads sold at reasonable rates, business listings, and sponsorships should bring in a portion of your revenue.
2. Freemium Classifieds. What?  You thought craigslist killed every possible opportunity for local classified ad sales?  No.  Not in hundreds (thousands?) of markets in between major cities, and maybe not at the neighborhood-level.  Either way, you’re going to make money off classifieds without turning away one-time customers who aren’t interesting in paying to sell that old tricycle.  Here’s how:  Offer new customers five free ads.  After that, they pay.  Businesses always pay.  Real estate brokers and car dealerships pay a premium, especially to add video to their ads.  The key to this?  A simple self-service system.  Keep the interface basic and friendly, and tailor it to your community.
3. Community-Funded Reporting. What? You’re worried that you won’t be able to pay for long-form investigative reporting on a small community site budget? The simple answer is that the community will pay for the stories that would otherwise be missed by a larger, slower, all-encompassing news organization with a broad coverage area. See the Spot.Us project for live examples of enterprise reporting that were funded, a few dollars at a time, by community members and other interested parties (like me) who don’t live in the area anymore, but still take an interest in local issues.

After that, there are less obvious ways to keep a small organization financially afloat, but they’ll vary based on your skills, staffing, and neighborhood.

Does that local business need a Web site to go with their banner ad?  I hear there are these new things called “blogs” that might be easy for them to maintain once you set them up with one, handling the hosting, domain management, and upgrades for a fee.

Other moving parts to keep an eye on:

• Ethan Zuckerman asks if ad-support journalism is viable, using the example of a 25k print circulation newspaper as a point of reference for his thoughtful analysis of the logic behind CPM ad pricing online.
• VentureBeat on changes at Federated Media, a display advertising network for technology blogs and news sites.  The changes seem to focus on getting away from straight-ahead banner advertising.
• No News Is Bad News, a group in Seattle trying to figure out what to do next with the Post-Intelligencer, which is likely to fold as a print newspaper around 50 days from now after not finding a buyer.

Related Posts

• Will the real online news business model please stand up?
• Carnival of Journalism: Five positive predictions for new media in 2009
• Newspapers: Vanishing faster than you think