Let me state from the outset that I don’t know if anyone in our industry has completely figured out how to make money with a digital-only community information site, least of all me. But here are some of my thoughts, and I would love to begin a discussion that actually leads to some solid answers, so please comment.

My last post talked about an experiment in Batavia, NY, by Gatehouse Media, where a media company launched a digital-only operation in a market where it doesn’t publish a print product. I proposed that my company, Gazette Communications, do something similar in Iowa City, IA.

A friend, Elizabeth, commented with a great question: How does it make money?

We have a responsibility to do more than just build it and hope they will come… how could a site like this serve the other, and equally important, constituency – local advertisers? We will need to be just as innovative in creating, er, fostering, the buyer/seller community as we are in creating new forms of journalism.

She makes excellent points. My expertise, if you will, is more on the content and audience than on revenue, but I’m going to give it a shot.

First off, we have to change the expectations. Twenty-eight to 30 percent profit margins are not realistic. A journalist – in this type of environment with this type of assignment – has to have an entrepreneurial mindset. Build everything in an open-source environment. Do something crazy like offering free classifieds. Draw audience by fostering those community and civic needs that are not being met. And, most importantly, be open to experimentation in revenue streams and content.

It’s a newspaper company thinking and acting like a startup – which is what every media company needs to do to survive the digital transition. – Scott Karp

I strongly feel this experiment will require thinking in terms of micro-pennies, or small amounts of revenue from new businesses that normally wouldn’t or couldn’t afford to advertise in a print product.

Online advertising means that small businesses who previously were not typical print or broadcast advertisers can now afford to advertise. In other words, there is a potential long tail of small advertisers that could prove a significant source of new revenue. – 10 ways that ad sales people can save newspapers

One idea my friend Tom is big on is in creating a revenue sharing network with other local bloggers. I think someone needs to run with that idea.

Here is another resource for disucssion purpsoses that Tom sent me: Counting your piles of Benjamins.

So those are just a few ideas I could come up with in the 15 minutes I dedicated to thinking about this today. What are your ideas? What have you done that is working? What have you done that has failed?

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There has been some pub recently about an experiment by Howard Owens and Ryan Sholin working with Gatehouse Media to launch a website in a place, Batavia, NY, where Gatehouse doesn’t publish a newspaper. You can read more about it here, here and here.

Here are the basics:

• Set up an office on Main Street
• Have one hired journalist/lead blogger in town everyday to connect with the community
• Build a site around a blog
• Allow any registered user to submit content, seek them out and promote them as much as possible
• Offer all the standard community tools
• Think about hiring a journalist to cover local sports
• Link liberally to other local blogs and content
• Post videos of events and breaking news
• Pull in feed from several sources

Here are a few of the comments being circulated about this experiment.

. . . the strategy is to launch an innovative news and community site that will eat the lunch of an incumbent newspaper that has ignored the web.

The Batavian is an experiment in whether a new web-native journalism can better serve a community. Here’s Howard on “Exploring the complexity of community issues as a community“

The Batavian lets any registered reader contribute posts, and it treats all registered readers as equals. One full-time reporter, and a couple of other Gatehouse employees who contribute occasionally, make sure The Batavian has new posts every day. The rest of The Batavian’s content comes from residents.

The company I work for, Gazette Communications, is based in Cedar Rapids, Iowa. The company owns a TV station, a newspaper and a commercial print operation. We have a bureau with a few reporters in Iowa City which is about 20 or so miles to the south, and Iowa City also has its own newspaper, as does the University of Iowa.

All of these traditionally run media sites, including the one I have some influence on, operate on a print-centric workflow, philosophy and approach. The biggest argument for doing this experiment is that a digital-only operation will not operating under any rules or constraints.

A lot of people in the building at Gazette Communications believe there is tremendous opportunity in the Iowa City market. I feel those opportunities, however, go beyond entertainment and University of Iowa students.

Digital communication allows all members of the public – the press, the politicians, the government agents and the citizens – to discuss choices, consequences and conditions as equals. Reporters need no longer be bound by the limitations of print and present just the so-called objective report, but rather explore, examine, raise and answer questions, and start conversations.

So what do you think? Can this type of experiment work in Iowa City? Anyone willing to try it?

Note: Howard Owens on Walter Lippmann: Lippmann was an elitist. He believed that the modern world was too complex for the average citizen to grasp, and that Joe Public probably didn’t care anyway. Modern democracy worked best, he argued, if the governing class was comprised of experts and professionals who set the policy and then manufactured public consent. The role of the press in this model was to merely transmit the decisions and actions of the elites  in simple terms, with little questioning or interpretation, aiming to maximize emotional impact.

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