Once upon a time the equation for funding a news organisation was a lot more straightforward. Most of the budget came from a combination of advertising (inc classifieds) and either cover price or subscriber fees and sometimes tax-payer’s money.
Things have become more complicated recently. These days organisations, through trial and error, are attempting to come up with new ways to fund journalism.
However, Silicon Valley Watcher’s Tom Foremski has another less-straighforward suggestion dubbed the ‘Heinz 57’ model, which I think is very interesting.
I’m sometimes asked what the new business model for media will be. My answer is that it will be a “Heinz 57” model. The Heinz food brand often has “57 varieties” in its promotions. And that’s a good metaphor for the emerging media business model.
He highlights the case of Australia’s Fairfax Media, which media consultant Frédéric Filloux looked at in February.
Filloux says Fairfax Digital (the part of Fairfax Media that runs hundreds of publications, websites and more than a dozen radio stations) has ‘no less than 15 revenue streams’ and it has an ‘entire team devoted to strategic advertising’ to react fast to changes and maximise ad money.
Filloux lists seven lessons to take from Fairfax Digital, which he expands in his post.
1. Accept the coming digital domination
2. Focus on reader engagement
3. Be an online company. Period.
4. Bet on multiple business resources
5. Capture readers and users one group after the other
6. Control your advertising innovation
7. Stay awake
The launch of the two News International sites today has put a spotlight on how news is funded and it’s going to be fascinating to see whether it can work. But I think there’s something in what Foremski and Filloux are highlighting.
Organisations must be flexible going forward. There will not be another simple equation, no answer to the 64-million-dollar question. A multiple-revenue model may be more complicated but it would hedge the bets, however organisations, no matter how big or small, need to be limber and able to react fast like Fairfax does.
Lots to think about,