Online-Only News Morphs Locally Based Outlets Address Revenue Puzzle

During the last few years, several online-only publications have started up in Arkansas, providing stories, analysis and other content – most of it free to readers – to an audience hungry for local news.

Several of these Web-news entrepreneurs who spoke with Arkansas Business said they believe they’ve hit on a sustainable business model, albeit one that might not pay as well as their former jobs. At least, that is, not yet.

As the traffic increases on these regionally oriented sites, so do the prospects of selling ads to businesses that are looking to target local eyeballs. In a weak economy, however, that can still be a tough sell.

“We’re so far ahead of where we thought we’d be in traffic, it’s not even funny,” said Michael Tilley, editor and co-owner of The City Wire, which covers cultural, political and business news in the Fort Smith region.

But, he said, “we’re in the mid to low range on our business model of where we thought we’d be on revenue. However, considering this deep recession, we’re just proud to be in the range.”

Dustin Bartholomew and Todd Gill began The Fayetteville Flyer in December 2007 because, as Bartholomew put it, they “wished that it existed. We wished there was a site that was updated every day about Fayetteville stuff.”

Though it started off as a nights, weekends and lunch breaks endeavor, the two soon recognized the site’s potential to become a full-time gig.

“We took a loan to get started and that lasted about six months, and we kind of fought with it from there, but it’s just recently become sustainable enough to support both of us,” Gill said. “We’re not quite where we were at our old jobs yet, but we see so much potential. It makes it easy to come in and get started every day when you see growth like that.”

Gill worked at the northwest Arkansas office of ad agency Cranford Johnson Robinson & Woods, handling graphic design and Web design. Bartholomew also worked for CJRW for several years as a production manager.

Christopher Spencer turned lemons into lemonade after he was laid off from Stephens Media’s The Morning News in April 2009. He and his partner, Greg Leding, began Ozarks Unbound in June 2009. Spencer eventually bought out his partner’s interest in the site, after Leding ran for, and was elected as, state representative for District 92 in Fayetteville.

“It’s a full-time gig,” Spencer said of the site. “It doesn’t pay full-time – at all – so I do freelance writing as well, but I put in full-time hours.”

Still, “October was our best month as far as viewership, and we’re continuing to develop an editorial voice that is one among many. That’s always been our goal, is to be a news source but also a sounding board,” Spencer said.

Joe Burgess bought the website Monticello Live in October 2007 and has since turned it from what was essentially a community-oriented blog into a news source for the Drew County area. Burgess also provides news to local radio station KHBM-FM, 93.7.

The site has recently begun garnering more than 150,000 page views a month, and Burgess said he is making money from ad sales. He also works as a process server, though he’s doing less of that since January, when he was injured in a hit-and-run while reporting from the scene of a car wreck.

Several other online-only news publications have popped up around the state, including the Magnolia Reporter, First Arkansas News and Inside Saline out of Benton and The Saline River Chronicle in Warren.

 

Full-Time Job

Tilley’s partner in The City Wire is publisher Tom Kirkham, who began the site several years ago as a community blog. He approached Tilley about turning it into a real news source – professional, updated frequently and, ideally, profitable.

Kirkham also owns Kirkham Systems of Fort Smith, a Web design, computer and network services firm. Naturally, those resources have proved invaluable to The City Wire.

Website administrators use different measurements to define how much traffic they get, such as page views (how many times a single page is viewed) and unique visitors (how many individual people are visiting a site). Tilley said in the two years since The City Wire reboot, the site has attracted 350,000 unique visitors.

However, he said, “I don’t want to be accused of puffing up numbers. Some of those unique visitors could be one person. For example, you have a computer at work and you have a computer at home. Maybe you log in twice, but even if you cut that number in half, that’s still well beyond what our targets were.”

The City Wire works with 10 to 15 freelancers at any given time, plus some help from Kirkham Systems employees and Patricia Brown, who works full-time as business manager and also sells ads.

“I find it somewhat humorous when people say – and usually it’s newspapers – will say, ‘Well you can’t make money on the Web. There’s just no model to make money on the Web,'” Tilley said. “Typically it’s because newspaper organizations or television or whatever, they treat the Web as their secondary product. It’s the stepchild.”

Tilley has bills to pay and a family to support. He said he “wouldn’t have stuck with this for two years if we were not making money at it.”

Prices for advertising on The City Wire fall in a wide range. Advertisements run for anywhere from $50 spots to sponsorships that are several thousands of dollars, Tilley said.

Tilley was laid off from Stephens Media’s The Southwest Times Record in June 2008. Though he worked in print media for many years, he has no regrets about his career change.

“After working in both worlds, I prefer this one,” he said.

Tilley is also working on a new electronic news product with a very different business plan: The Arkansas Report. The e-mailed newsletter of news and analysis is a joint venture between The City Wire and Roby Brock’s Talk Business, the TV and online news brand that expanded into a traditional print magazine, Talk Business Quarterly, almost three years ago.

Unlike The City Wire, TalkBusiness.net and most Web-based news services, The Arkansas Report is charging ($99 a year for one person, $499 for groups of five to 50 subscriptions) for the weekly e-mail.

 

Advertising Model

Banner ad rates on Monticello Live run between $100 and $400 a month, depending on the size of the ad and placement. Burgess said he’s had as many as 70 ads in a month.

Since June 2009, Spencer has made about $600 from ads on Ozarks Unbound, he said.

Obviously, that’s not enough for him to live on, thus the freelance writing he does in addition to running the site. But he said the core of his business plan was always “to build trust and credibility and then go seek monetary recompense for it.”

For November, Ozarks Unbound will probably get about 30,000 page views, up from about 25,000 in October, “which is still kind of low, but so much of that is local,” Spencer said.

That’s the type of traffic local advertisers are most interested in, he said. After 10 years as a newspaper reporter, Spencer has at times felt a bit uneasy about the revenue side of the business. But he said his reservations about selling ads are fading, and he’s becoming more comfortable with the idea.

His goals for the next few years include hiring reporters and possibly ad sales staff.

Spencer has a weekly spot on the Unlicensed Opinion segment on KUAF-FM, 91.3’s “Ozarks at Large.” The City Wire recently announced its news-sharing partnership with “Ozarks at Large,” an hour-long daily newscast produced by Kyle Kellams, news director for KUAF.

Bartholomew and Gill have what they described as a sponsorship arrangement for advertisers on The Fayetteville Flyer. Ad packages cost between $300 and $1,000 a month, depending on the length of the contract.

Businesses pay upfront and have the option to tweak their messages regularly. If an ad is promoting an event, for example, “then it disappears after the event has happened,” Gill said. “It allows us to be a lot more dynamic than just traditional display advertising.”

The Flyer has 38 sponsors so far, and is on track for about a million page views this year. In other words, things are going according to plan, Bartholomew said.

When the two first put their business plan together, “we were naïve in thinking this is going to be easy,” he said. “But actually, I think we are right where we hoped we’d be, and that’s basically a 2-year-old business that’s sustainable and that we’re drawing a regular paycheck and we’re continuing to grow. I feel like we haven’t reached the peak of our potential yet and that’s really exciting.”

Burgess said he “never expected Monticello Live to achieve the levels it’s achieved.” But he said he knows as long as he’s providing local, relevant content, readers will continue to reward him with page views.

While traditional newspapers that charge for print subscriptions are wrestling mightily with the question of whether and how to charge online readers, online-only news organizations don’t seem to be so conflicted.

Tilley said he and Kirkham have discussed some sort of pay model for The City Wire, but if that were to happen, it would be for some sort of premium service. One possibility could be allowing paying subscribers to access stories a few hours earlier than non-subscribers, Tilley said.

The Fayetteville Flyer probably will never have a paywall, Gill said. Spencer and Burgess said paywalls were unlikely for Ozarks Unbound and Monticello Live, as well.