What We Know About the Business of Digital Journalism

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Columbia Journalism School | Tow Center for Digital JournalismBut even if the effort is as successful as the Chronicle hopes, Sweeney figures itwould do no more than match the current revenue from one of the paper’s biggestadvertisers. In other words, it will be a big help but is not, in itself, a replacementfor the old business model. “This has become a nickel-and-dime business,”he says. “And you need a lot of nickels and dimes.”* * *A decade ago, KSL, a local TV station in Salt Lake City, came up with whatwas then a novel idea: It would start its own classified-ads section on KSL.comand end its relationship with a company that was already providing that servicefor the site.“We were making like $300,000 a year [in revenue] on the partnership, whichback then was a lot of money online,” says Clark Gilbert, president and chiefexecutive officer of Deseret Digital Media. But the station, an NBC affiliate, sawthe change as a way to build traffic to the site. Its classifieds service would also bea way to showcase the moral standards of its owner, the Church of Jesus Christof Latter-day Saints. Deseret Digital Media runs the online properties for thechurch’s TV station and its newspaper, the Deseret News, along with sites moreobviously of the church, MormonTimes.com and DeseretBook.com.Today, KSL.com is a powerhouse on the Web. The site has more than 4 millionunique users and generates an astounding 250 million page views a month, saysGilbert. (KSL’s sister property, the Deseret News, has a more typical audience ofabout 2.5 million unique users and 30 million page views; the website of a competingnewspaper, the Salt Lake Tribune, has roughly the same size audience.) Ina recent study of Web traffic data in major markets, a company called InternetBroadcasting found that KSL.com reaches 48.8 percent of its local market. Thatis more than any local media outlet in the survey but one, the Minneapolis StarTribune’s site. And it is far beyond the Web footprint of the top local TV stations,which average under 20 percent market share. 5New Users, New Revenue: Alternative Ways to Make Money 107
The Story So Far: What We Know About the Business of Digital JournalismStill, all that traffic didn’t keep Deseret Digital Media from announcing layoffslast year at the Deseret News 6 that, despite the sunny headline that announcedthe news (“Deseret News set to lead, innovate”), resulted in a cutbackof 43 percent of the newspaper’s workforce and consolidation of some newsgatheringoperations with KSL-TV. 7 (The Salt Lake Tribune announced thelayoffs with some competitive schadenfreude: “Tribune to press ahead in faceof News changes.” 8 )KSL.com’s strategy relies partly on its worldwide audience of church members,but it also offers useful lessons for news organizations seeking untraditional waysto build a digital audience.The classifieds themselves are mostly free, though advertisers can pay up to $10a day to get prominent placement. The classifieds pages also host other ads, andmore importantly, they are responsible for about 70 percent of KSL.com’s totaltraffic, so they provide tremendous benefits to the rest of the site. The pages carryprominent links to news stories and videos on KSL.com, which helps to generate70 million to 80 million page views a month for content that isn’t classifiedads. “The main route to the site is still the news page,” Gilbert said. “We haven’ttried to make ‘KSL.com/classifieds’ our bookmark. That made the [KSL] newssite bigger than any other news site in the market.”Gilbert adds that there is another benefit: “Here’s something hard for old-mediapeople to accept. … Our news content gave a level of trust to the classifieds,and classifieds drove relevance back to the news.” Or, put another way, the factthat readers have come to rely on the classifieds under the KSL brand helped tobuild relevance and credibility in the news as well.KSL.com had some important advantages. First, it started early, shortly beforeCraigslist came to Salt Lake City. And because it was a TV station’s website, itwasn’t perceived as competitive by its existing staff; there was no classified-adsmanager to complain about giving away a lucrative revenue stream. “KSL didn’thave legacy products that were competing with this service,” says Chris Lee,general manager of DeseretNews.com. “If they wanted to do cars, there wasn’tsomeone saying, ‘But we’re already doing cars!’”108
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