It was Friday, February 20 – one of those bright, cold New York winter mornings. Just before heading to the subway, I checked my e-mails on my BlackBerry. The one that immediately caught my eye was from Alberto Ibargüen, president of the Knight Foundation:

“I was talking with Walter Isaacson [President of the Aspen Institute] at dinner last night and he suggested that…we should tackle exploration and development of biz models [for journalism]… I said I was interested in supporting and suggested we do this w/you and CUNY. Interested?”

Elated, I quickly thumbed back:

“Are we interested? Yes. Yes. Yes. It would be a dream come true to work on this with everyone… Alberto, thanks for keeping us in mind…”

We quickly formed a team headed by Jeff Jarvis, director of the interactive program at the CUNY Graduate School of Journalism and a leading thinker about the future of journalism. We asked ourselves these questions: What would happen if a major metropolitan daily was no longer able to perform the civic functions of a newspaper in a community? What would replace it?

Actually, we had been thinking for a long time about how to support quality journalism in this new digital age. We had run conferences on the subject, we had received a $3-million challenge grant from the Tow Foundation to set up a Center for Journalistic Innovation, and we had been working with The New York Times, our next-door neighbor, on a hyperlocal news project in the Fort Greene section of Brooklyn, supported in part by the Carnegie Corporation of New York. It wasn’t enough, we knew, to provide quality journalism. We had to find ways to pay for it in a sustainable way.

After much discussion back and forth with Knight (thanks Eric Newton) and the Aspen Institute (thanks Charlie Firestone), we agreed to develop business plans, including detailed spreadsheets based on various assumptions, for two broad scenarios: (1) providing news to a local neighborhood and (2) for a major metropolitan area. The goal: present preliminary plans to a select audience of 50 at the Aspen Institute in August.

Armed with a five-month, $250,000 grant from Knight, we hired staff: Peter Hauck, an experienced media executive who had worked with Professor Jarvis at the Newhouse chain of newspapers; Jennifer McFadden, a spreadsheet-savvy analyst who had worked at The New York Times; two of our own recent graduates, Matt Sollars and Damian Ghigliotty; and several graduate students from the Field Center for Entrepreneurship at CUNY’s Baruch College. Mignon Media, a well-known consultant, helped with the spreadsheets.

As a first step, we surveyed more than 110 local web sites or blogs that were successfully serving local communities or cities. Some of them were supported by foundations, like Voice of San Diego, MinnPost, and the New Haven Independent. But others were self-supporting: Baristanet.com in Montclair N.J., West SeattleBlog.com, The Arizona Guardian, and Sun Valley Online. Many of them shared crucial data with us: how big an audience, how much they charged for ads, what they paid reporters and sales people, how much they earned. Yes, earned. Many of them were nicely profitable while providing valuable news to a community that was actively involved in covering themselves. In short, by collaborating with their communities, they were creating both a journalistic and business model.

Flash forward to August. There we were in Aspen, with 200-page books loaded with spreadsheets and business plans. We proposed a new journalistic ecosystem that had four main players:

• A New News Organization staffed by professional journalists.
• A network of local bloggers covering various aspects of a community, from schools and housing to health and crime.
• A service-providing framework that would offer sales support and networking opportunities.
• Non-profit groups in the community, such as a local NPR radio station.

Lo and behold, our models showed that bloggers could support themselves with local and networked ads, events, and e-commerce. The New News Organization (NNO, as we fondly called it) could have double-digit profit margins.

Yes, the NNO would be smaller and have lower revenues than an existing local newspaper, but its cost structure would be much leaner, creating nice margins. By collaborating with local bloggers and sites, the NNO would be deeply rooted in the community, providing a form of hyperlocal content that traditional newspapers don’t offer. And it would open up a source of hyperlocal revenue from local and regional advertisers that could be networked.

Over two days, the participants pored over our models, offered criticisms, made suggestions. Some disagreed with our conclusions, but pretty soon nearly everybody was talking about journalistic ecosystems and New News Organizations. We are now refining our models, working toward a deadline of January 31 for our final report. All of our work is available for scrutiny and comment on a special web site, www.newsinnovation.com. We’d love to hear from you.

Stephen B. Shepard
Dean