[Editor's note: This is day two of OJR's a week-long look at the state of independent local online news start-ups. Each day's report will include a feature article, as well as a Q&A with one or more of the day's sources. If you missed the first installment, here it is: The state of independent local online news, part 1: Sites on the rise; business models remain elusive]
Take newspapers’ classic strengths of in-depth reporting and high-quality writing. Convert to an online-only operation.
You’ve got MinnPost.
The nonprofit Minneapolis news site, written mainly by free-lancers who formerly worked for one of the big Twin Cities dailies, is the largest and one of the strongest of the startup websites focusing on local and regional news.
But like everyone else occupying the space of online-only community news, MinnPost founder and editor Joel Kramer finds the business model elusive.
The strength of the Twin Cities market – it has the country’s most literate and civically engaged population – also turns into a liability, because Minneapolis/St. Paul is jam-packed with local news outlets of every stripe.
MinnPost wasn’t even the first entry in the Twin Cities’ online-only news space. Jeremy Iggers launched the Twin Cities Daily Planet in May 2006 as a hybrid of community news written by professional and citizen journalists. Between other online players like Minnesota Independent and dozens of other news websites, there are too many ad sales people chasing too few Web advertisers.
“What really makes things difficult is the high volume of publishers,” said Kramer. “Anybody can be a publisher. There’s just a tremendous number of publishers offering advertising to a still relatively small volume of buyers.”
MinnPost has intentionally raised the bar higher by positioning itself as a high-quality content site and so its advertising rates are relatively high.
The site has a roughly $1.2 million operating budget this year and is attracting about 150,000 unique monthly visitors, said Kramer, former publisher of the Minneapolis Star Tribune.
Many of MinnPost’s first-year metrics have been worse than projected: Advertising has been harder to come by and page views began lower than expected, for example. But audience growth after launch has hit the target of 5-10 percent month-to-month gains, and the site’s paying membership ($10 to $10,000 contributions) at the one-year mark will be almost exactly at the projected 1,100.
Interestingly, some of MinnPost’s strongest traffic comes from readers of staff-produced national stories, which, in the site’s original blueprint were not going to be done at all. “I can tell you after 11 months of watching what people read, we’ve learned that in fact, doing those national stories increases traffic because of the way the Web works.”
That, and the fact that some of the other best-read stories are offbeat pieces that were almost throwaways at the time, makes it complex for a staff trying to stay true to its core mission of serious, high-quality local reporting.
Reflecting the reactions of many news-site publishers, Kramer said the first year has been both enormously rewarding and exceptionally difficult.
Asked to compare the work with his old day job as Star Tribune publisher, Kramer said, “This is more stressful, actually. There’s nothing like starting from scratch in a media world that is so much more in turmoil and so hard to figure out what to do. But I’m having a lot of fun. And I’m getting great satisfaction from readers who tell us we’re the best thing in town.”
Kramer’s standing in the community helps explain the site’s robust startup. Initial funding of $850,000 came mostly from families (including his own) closely involved in the Star Tribune in the days when it was still owned by the Cowles family. The site has also received funding from the Knight Foundation ($250,000) and the Blandin Foundation ($225,000), for rural Minnesota coverage.
Like everyone else, Kramer hopes foundation support will get MinnPost over the startup hump. But he says it won’t last long. “You can’t rely on the foundation model,” he said. “Most foundations want to know what you’re going to do when they stop funding you.”
More promising are paid memberships, and here Kramer draws on the success story of Minnesota Public Radio and its 94,000 member contributors.
“We have only a little more than 1,000 now at MinnPost,” said Kramer. “We think we can get more.”
Interview with Joel Kramer, editor and founder of MinnPost
Q. Next month you’ll celebrate your first anniversary. How will you sum up for your readers the first-year story of MinnPost?
A. First I’d say we’ve been clearly embraced by a growing portion of the community. We’ve had very steady traffic growth. We’re up to more than 150,000 unique monthly visitors now, and a half a million page views. And those numbers have been going up about 5 to 10 percent a month. We also have more than 1,050 paying members, and that was an important part of our long-term sustainability model. Our plan was to hit 1,100 by the end of the first year.
Advertising is weaker than planned, because of the slow economy, but that’s an important part for us to develop because to become sustainable we need to have both membership and advertising dollars.
Q. What was your hope, what is your hope on the mix of advertising and contributed revenue?
A. When we started we said our hope was, by 2011, 70 percent advertising, 30 percent membership. Right now it’s running about 50-50, maybe a little higher on the membership side. It’s pure guesswork because it’s a new model. The key is to get to a sustainable model by 2011. There are a lot of reasons to become optimistic, but the advertising side really needs to get better.
Q. Are the economic problems you talked about mainly the general economy or the new-media economy?
A. The sense in which it’s the overall economy, we’ve had a number of advertisers say they were happy with us, getting good click-through rates, but their budgets have been cut. But in addition, there are the challenges associated with being a startup in the online world. We’re small and many advertisers don’t want to deal with small players. We’re also following the strategy of not being the cheapest player. We’re trying to create a quality environment on the site and charge higher rates, which I believe is necessary to survive.
What really makes things difficult is the high volume of publishers. Anybody can be a publisher. There’s just a tremendous number of publishers offering advertising to a still relatively small volume of buyers. Many buyers don’t really understand online yet. That combination is very difficult for advertising. Some months we’re selling $20,000 in advertising. But that’s less than we’d projected.
Q. The 150,000 monthly uniques. How does that match the goals you set at startup?
A. We started with a page-view goal of 400,000, and we started below 300,000. But the growth rate is what we expected, which is a doubling in the first year.
Q. What’s been your biggest surprise?
A. On the Web you get instant feedback about who reads what, which is something as an old newspaper editor I did not have. And the process of seeing how people use your site and what they read is constantly surprising. One of the challenges is that we started our site with a public purpose which is to do high-quality journalism which we believe is in decline. But when you look at the traffic, often you find it’s the most casual or offbeat story that gets the most traffic. And also, you’ll get a lot more traffic when you get a story of national interest vs. just a local story. So there’s a constant tension in an enterprise like ours, how to do what we set out to do out to do, but also to grow traffic when the things that attract the most traffic are not always the most important story.
Q. You do run quite a few national stories. It surprised me a bit. That’s a shift, that you’re doing more national than you expected?
A. Before we started I thought we’d do everything local. My reasoning for that is that when you’re on the Web, you’re just one click away from national sites that have a lot of resources so why duplicate? But even before we started we did some focus groups with interested readers, and in those focus groups people said to us, ‘If you want a site that we’re going to identify with, as being the site for Minnesotans to come to who are serious about news, don’t make it provincial. We have broad interests.’ So even before we launched we heard quite a bit of that. So even before the launch we decided to do some national work. I can tell you after 11 months of watching what people read, we’ve learned that in fact, doing those national stories increases traffic because of the way the Web works.
We’ve had some very good, solid local stories that have gotten 5,000 readers or more. But others not so much. Our goal is to do serious, high-quality journalism for people who care about Minnesota. That’s our public purpose. But we’re dealing in a medium where you often get traffic from strange things.
Q. Can a general-interest community news site compete with the multiplicity of niche sites springing up?
A. It’s hard to predict the future. I think there is a place for both in the firmament. The way people navigate the Web changes the paradigm that people are going to just a few sites for news. I think it’s very possible, and likely, that both kinds of sites can flourish. We want to be the site that many people who care about Minnesota come to.
We’re not trying to do everything. We’re broad-based but we also have a kind of magazine sensibility that we’ll write about what interests us. In addition to politics, which has been our strongest area, and media, which is our second-strongest, we also do sports, sciences, health, arts. We don’t try to cover anything near the range of topics the Metro newspaper uses.
Q. Talk about your staff.
A. We have two full-time writers, Eric Black and David Brauer, and then a few more writers that write frequently for us. And then a stable of several dozen free-lancers who work less frequently. We have five editors plus a technology person/director of operations. It’s a big infrastructure. We’re not bringing in enough money to cover our costs.
Q. Are you interested in the micro-neighborhood-citizen journalism model?
A. No. I think there’s a place for that. I’m interested in people who are experimenting with that. But I don’t think anyone can do everything. We really have as our mission to do professional journalism. We are interested in ways new technology could enable us to do professional journalism in a more interactive way with the audience. I’m interested in techniques that can expand participation with our work. But not the amateur model. It’s a different game and requires a different approach. It’s not our field.
Q. Are you expecting replicas of MinnPost all over the country?
A. We are in conversations with the ones who have started, the nonprofit sites. And maybe helping others get started. I do think this will happen. Our sites are all somewhat different, in content and funding.
Q. Where are you getting your funding?
A. We got $250,000 from the Knight Foundation. And then a $225,000 grant from the Blandin Foundation. They specialize in rural Minnesota. And our grant was to expand our reach and our coverage outside the metro area. So our goal is to be a statewide publication. Historically, newspapers did that but they stopped because the circulation was too expensive. Building geographical communities on the Web is very difficult. The business model tends to work against it, because the real traffic comes from reaching out to a broader base. We’re spending about $100,000 a month. That puts us in the high range of sites like this. We also are bringing in members and advertising faster.
Q. Are you planning one-year course corrections?
A. One of the interesting things is how fast you change. We’ve changed many, many times We had no full-time writers when we started. We now have two. And they’re our No. 1 and No. 2 traffic-getters. When we started we published mainly once a day. (We have one ad director and one commission ad seller.) Now there’s stuff going up all day long. We still don’t publish a lot nights and weekends. And the reason is cost. But we have found publishing all day works better.
Q. Your career is backwards from a traditional one. You oversaw this huge news operation in Minneapolis as publisher of the Star Tribune; now you’ve got this startup that is not making money yet. What’s that like for you personally?
A. This is more stressful, actually. There’s nothing like starting from scratch in a media world that is so much more in turmoil and so hard to figure out what to do. But I’m having a lot of fun. And I’m getting great satisfaction from readers who tell us we’re the best thing in town. They’re not enough of them yet. And the reporters who tell me they’re doing the best work of their lives.
Q. Talk about your journalism.
A. There are a number of really good reporters experimenting with sustaining their commitment to high-quality journalism and still operate in this news medium. The two people to watch at MinnPost are Eric Black and David Brauer. Eric in particular, he used to be at the Star Tribune, he’s very open with the reader. He’s a good prototype of the change going on. His stuff is more of a conversation with reader. He’ll write in parts as opposed to one long story. It’s a challenge finding reporters like that.
Q. How do you think the digital revolution will shake out with respect to mainstream media?
A. At the national and international level, some good will come out of this, because of the way the Web favors national and international coverage. I’m more worried about the local and regional levels. And it’s why I think there’s going to be need for non-profit journalism at the local level. The dynamic of the Web is not very favorable to spending money at the local level.
Q. Is there philanthropy enough to go around for this?
A. Foundations alone, definitely not. You can’t rely on the foundation model. Most foundations want to know what you’re going to do when they stop funding you. I do think there’s a lot of individual money around – a lot less than a couple of months ago. We have 94,000 contributors to Minnesota Public Radio. We have only a little more than 1,000 now at MinnPost. We think we can get more.
David Westphal is executive in residence at the USC Annenberg School for Communication. He is affiliated with Annenberg’s Center for Communication Leadership and the Knight Digital Media Center.
Tomorrow: We talk with Howard Owens about GateHouse Media, Inc.’s online-only community news site in Batavia, N.Y.
Thursday: ChiTown Daily News bets on reader reports to capture the local online news market.
Friday: PasadenaNow covers its community by outsourcing its reporting.