For traditional media companies fighting to stay on top in the internet age it may no longer be a case of forgoing analog dollars in favor of digital pennies just to stay ahead of the pack.
Media and entertainment companies say that 47 percent of their overall revenues currently come from digital products, according to a new report by professional services firm Ernst & Young. Further, they project that by 2015 a majority of their income, or 57 percent, will be generated from digital sales.
To arrive at those numbers, Ernst & Young surveyed more than 550 senior executives at technology, gaming, publishing, film, broadcast and cable and social networking companies.
In every way, metros under-perform smaller, community-sized papers — as many community publishers point out to me when they complain (justifiably) about media coverage that uses metro papers’ woes as a proxy for the entire daily industry.
Why do metros underperform? They are caught between the national/global players and community dailies. Community dailies — think those with 75,000 or less circulation — cover smaller geographic areas. More of their coverage is expressly local, meaning the stories may touch neighborhoods and issues known to readers. They also typically face less competition for readers and for advertising.
Over the years, it grew to have an office of its own, where students would come to produce a newspaper that was distributed to the classrooms of more than 1,200 teachers across Los Angeles County. It had a circulation of 70,000 and an estimated readership of 400,000, Myrow said.
But L.A. Youth struggled financially in recent years, reeling from the loss of foundation grants and corporate donations that were a primary source of funding. After the paper almost ran out of money last year, narrowly surviving through last-minute gifts, its board of directors decided it had run out of options and voted earlier this month to cease publishing.
In the U.K., we found a few journalistic startups who’ve experiment with business models and have found somewhat unexpected revenue streams — including money made selling something other than their journalism, most often technology. One British example is Tweetminster, which gets its name from a mashup of Twitter and London’s Westminster. Tweetminster automatically curates what experts in U.K. politics and current affairs think is important, based on data and without human intervention. For its clients and partners, however, the company produces analysis of particular industries, topics, or markets — all based on what experts of those fields are paying attention to online. “Everything we do outside of politics we charge for. We sell a license to use our software. It’s an API, so as the clients make more calls, the price goes up,” CEO Alberto Nardelli said.
Blottr is a U.K.-based citizen journalism news service, but its income also comes mainly from its technology.