Can newspapers survive?

No, says Wall Street bete noire Henry Blodgett in Why Newspapers are Screwed .

Maybe, suggests Chuck Taylor, a former Wall Street Journal and Washington Post staffer, in How an electronic newspaper could become profitable . In another article, Woe is the future of newspapers — not, Taylor notes the popularity of the Seattle Times and Seattle Post-Intelligencer web sites: “Stop the presses! Sell the trucks! Stop buying newsprint! That 19th century overhead is what’s killing newspapers, not the Internet.”

But the Wall Street Journal reported that pure-play Web companies last year surpassed newspapers in market share for local online advertising, 44% vs. 34%. (Directories — e.g. Yellow Pages — have 10%, and local television outlets 9%.) That’s a reversal from three years ago, when newspapers had 44% of the market.

Meanwhile, journalism professor Edward Wasserman provides some history in Can journalism live without ads?

Below are links to articles on some of the pioneers who are trying to invent new models for journalism.

Community News

• An article on revenue models from New Voices, a program to seed innovative community news ventures in the United States.

• Can Youth Sports Coverage Pay Off Online? The founder of a two-year-old website covering high school sports in suburban Virginia says he is earning a full-time living from advertising on his site, which attracts 10,000 unique visitors per month.

Non-profit models

• An article from Jay Rosen’s Pressthink blog on creating the non-profit New Haven Independent, which incorporates elements of citizen journalism. “The readers have definitely become part of the process. Trained journalists still play a crucial but altered role. We’re more fact-gatherers, linkers, fact-checkers, conveners and referees than pundits or editorialists telling people what to think.”

• The Christian Science Monitor, in Nonprofit Journalism on the Rise tells the story of the Voice of San Diego, which is winning plaudits for its coverage of city politics. It supports its staff of eight 20-somethings with $600,000 in contributions from donors.

• Joshua Micah Marshall, whose Talking Points Memo became the first Internet-only news operation to receive the prestigious Polk award, has used a combination of advertising and charitable support according to this New York Times profile . Marshall’s business model, as described by the Times: “Begin as a tiny operation. Manage to gain a following. As the audience grows, ask readers for donations and accept advertising. As the advertising and donations grow, add reporters and features. Repeat as often as needed.”

Recent nonprofit online, newspaper, and journalism ventures include:

• Voice of San Diego , an online daily.
• MinnPost , an online and print daily in Minneapolis.
• ProPublica , an investigative journalism group in New York.
• Minnesota Monitor , one of four statewide online papers funded by the Center for Independent Media.
• New Haven Independent , Conn., an online daily.

Free or Subscription?

Few publications can earn a living on subscriptions alone. Those that can principally serve highly-targeted business audiences with actionable — that is to say, valuable — intelligence and analysis.

Bloomberg, Dow Jones Newswires and industry newsletters have been doing this for years. My former startup colleague, Orest Mandzy, showed this model translates well to the web. His Commercial Real Estate Direct has a blue-chip list of Wall Street subscribers paying $1,750 per year for a daily digest of commercial real estate news and — most important — pricing data on the latest commercial mortgage backed securities offerings.

The Wall Street Journal’s WSJ.com generated $60 million in subscription revenue from more than a million subscribers in 2007 (though new owner Rubert Murdoch is considering making more content free).

But few general interest sites have been able to build a large enough subscription-based readership on the web. The New York Times dropped its TimesSelect service in September 2007, deciding its 227,000 subscribers and $10 million in annual revenue was less valuable than the advertising revenue that a larger audience could generate. The NYTimes.com total page views jumped 52% from the end of August through the end of October while unique visitors increased 64%. See AJR’s article Free at Last: Why major news outlets are giving up on charging for online content .

So is advertising the answer for mainstream consumer sites? Newspapers have seen robust increases in their online ad revenue — but not nearly enough growth to replace the hemorrhaging of print advertising.

The top 50 web companies account for 90% of all online ad revenue, and the lion’s share of the spoils are going to companies who create no content. The search market, dominated by Google, claims a 40% market share, according to PriceWaterhouse Coopers. Classified advertising (think Craig’s List, etc.) is the second largest category with 17%.

Are there riches in niches?

Some small publishers with niche audiences and without newspapers’ overhead are making a living on advertising and product sales. Don Vandervort, whose HomeTips.com attracts one million visitors monthly, says he is earning enough from Google adwords to pay the salaries, overhead and business development for his site.

In December 2007, News Corp. reportedly paid “in the tens of millions of dollars” for religious site Beliefnet Inc. , giving it what the Wall Street Journal termed a “promotional outpost” for its religious books and programming.

Venture capitalist Alan Patricof, who financed Apple Computer Inc. and founded New York magazine, recently bought a minority stake in ContentNext Media Inc., parent company of PaidContent.org . Why? Web-based niche publications have lower start-up costs and easier spinoff opportunities than print media, Patricof says: “To start a magazine today would cost a minimum of $15 million to $25 million, and you have to spend through three or four years of losses … (With blogs) the economics are a lot better.” See the Wall Street Journal’s article “Bloggers Find Financial Backers For Their Independent News Sites.”

Boing Boing , a hodge podge of weirdness and technology doesn’t impress me as anything special. But it is one of the five most visited blogs on the Web with 7.5 million page views a month and three million RSS subscribers. More than 600,000 sites link to the site. It is reported to earn $50,000 a month in ad sales, which sounds like a lot for a site that is run by six part-time(?) bloggers. But when you consider that the largest newspapers can — or used to — charge that much for a single full page in their Sunday edition, you have a better idea of the troubling economics.