Show Us the Money ... We're Still Waiting

By: Steve Outing

Since the Internet remains an immature news medium, many of us in the business remain fixated on money -- as in, how do we design online news ventures to turn a profit and thus enable this new medium's survival? The answer is ever evolving.

I just finished reading a white paper on this topic, "Making Money From the Web? Business Models for Online News," by Peter B. White and Susan Mings of La Trobe University's Online Media Program (Bundoora, Victoria, Australia). Unfortunately, you won't find a magic answer here, but the paper does synthesize and summarize some of the industry's thinking over the last couple of years.

White and Mings concentrate on the newspaper industry's efforts to find credible online news business models. Utilizing primarily public sources (including this column, the Editor & Publisher Web site, the online-news Internet list (which I administer), university experts' reports, and others), the authors identify the four basic business models in use by the online newspaper industry:

The subscription model. (Making users pay for at least some if not all content.) The advertising/sponsorship model. The transactional model. (Facilitating the coming together of buyers and merchants in the online space.) The bundled model. (This refers to online newspapers partnering with online services, Internet service providers, Web browser or "push" technology companies, other newspapers or content providers, etc.) White and Mings are a bit tentative in offering their own conclusions, except to say that "there seems to be a general consensus that, given the complex challenges for online newspaper publishers trying to turn a profit, no one economic model, or particular mix of models, can be entirely suitable. A successful revenue model for online newspapers will be some unknown mix of revenue models," they write.

I think they have this right. This has been my message to publishers for some time, though I hope that some day one element of this mixture will begin to stand out as the most promising revenue source. Perhaps it will be the online community guides that some newspapers are building, which offer advertisers better targeting and value than ads accompanying generic news content online. Perhaps online classifieds will evolve to be newspapers' online cash cow, as classifieds revenues over time shift away from print and more toward online. (This pre-supposes that newspaper publishers don't try to hold on to the past and aggressively promote usage of online classifieds databases.) Perhaps online transactions will finally emerge as a way to pry nickels and dimes out of online news consumers.

For now, the industry can best keep experimenting and developing new business models. Someday, we may find our "killer app" that makes all the difference in online news site profitability.

The White/Mings report will be useful mostly for those publishers wanting to learn what's been tried before and with what result. It offers some thoughtful analysis of the situation up through late 1996. (Much of the information cited in the report comes from 1996 and prior, but of course in the fast-moving interactive media environment, much has changed in that short time.)

Contacts: Peter White, pbwhite@latrobe.edu.au
Susan Mings, mingss@rpi.edu

Star Tribune debuts Sidewalk response

The Star Tribune in Minneapolis, Minnesota, this week debuted its Free Time local Web entertainment guide -- which goes head to head with Microsoft's Twin Cities Sidewalk site, which launched last week. Free Time includes a restaurant guide, movie guide, club and casino information, sports/recreation listings, etc. A nice feature is an e-mail service that delivers "Best Bets" for activities in various categories. Free Time has thousands of events and venues in a relational database, all searchable.

In the works, according to STO editor Steve Yelvington, is a "Date Wizard" that helps you plan an evening out in the Twin Cities. As Yelvington explained at the recent NetMedia conference in London, the Date Wizard will "have a conversation with you," then produce recommendations of what you might like -- and even offer up a personalized map with driving instructions to the recommended venues.

The Twin Cities is a market to watch how the online entertainment guide concept plays out. Sidewalk offers some flashy technology, yet it's the newcomer to town. The Star Tribune is the known local brand name, but it also is producing some fairly sophisticated technology. For a newspaper with less technological savvy, I'd give Sidewalk a fair chance of succeeding over a newspaper site. In the Twin Cities, this could be a real cat fight, but I give the edge to the Star Tribune's Free Time site on the strength of an established local brand name (and in-print promotion) coupled with technology that might rival Microsoft's.

Contact: Steve Yelvington, stevey@startribune.com

Movin' On

Michael Mimeles will lead the San Francisco Studio of Cox Interactive Media, the new media/Web arm of Atlanta-based Cox Enterprises. He comes from Apple Computer, where he help establish the company's corporate Web presence and produce live events online. Cox is entering the San Francisco market to build an online city guide site in conjunction with television station KTVU. Cox Interactive also has or is building "studios" in Atlanta; Austin, Texas; Dayton, Ohio; Charlotte, North Carolina; and Orlando, Florida, and plans to have set up shop in 20 U.S. cities by the end of 1997.

Steve

Previous day's column | Next day's column| Archive of columns
This column is written by Steve Outing exclusively for Editor & Publisher Interactive three days a week. News, tips, and other communications may be sent to Mr. Outing at steve@planetarynews.com

The views expressed in the above column do not necessarily represent the views of the Editor & Publisher company