BlockByBlock

Ideas and discussion from BxB2010 Summit

Edhat.com: Where’s the Money?

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One of the major topics at the Sept. 24 Block by Block summit was money: How can a local news site support itself financially? Journalism master’s students from the Medill School at Northwestern University interviewed conference participants about their business and revenue strategies.

We hope these posts will continue conversations that started at Block by Block. If you have ideas that will help these and other online community publishers achieve their goals or questions about how they are doing that, please join the discussion in the comments. Thanks!

By Jason Shough

Peter Sklar founded Edhat.com in Santa Barbara, Calif. about six years ago, opting for a traditional ad-and-subscription business model so the site would be an independent source of community news. Non-profits rely too much on grants and donations, he said, potentially affecting the angle of the coverage.

The site has since expanded into two additional California communities, San Luis Obispo and Ventura, but Santa Barbara remains the most robust online forum in the Edhat portfolio. It boasts 8,876 subscribers, of whom 708 have signed up voluntarily to pay a recurring monthly charge of $4.33, allowing them the ability to post comments.

Roughly half of Edhat’s monthly operating revenue comes from paid subscribers, he said. The other half comes from local advertisers.

“The ad revenue is the low-hanging fruit right now,” Sklar said in an email. “But we see our [long-term] revenue model relying more heavily on receiving revenue from subscribers who spend many hours on our site each week and receive the most value from what we provide.”

Sklar is also skeptical of being dependent on advertising, and aired these concerns at Block by Block. The conference focused too heavily on ads as a dominant source of revenue, he said, rather than on getting users to pay for the service a site provides to a community.

“The consumer wants content. The businesses want promotion,” he said. “It seems impossible to create an online news source that makes both groups happy.”

“We are choosing to create the best website for citizens of Santa Barbara. And, what we have created is not necessarily a good forum for advertisers to promote. So, we need to find a way for our subscribers to support us.”

These interviews were conducted as part of a class at the Medill School of Journalism that’s focused on new approaches to hyperlocal publishing.  To follow the class’s work, check out the class blog, Local Fourth.

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Written by richgor

October 11, 2010 at 2:14 pm

Posted in Uncategorized

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