Freemium journalism business models, or the Launch of the Spawn of TechCrunch
In case you missed it, Sarah Lacy has launched Pando Daily, aka “Spawn of TechCrunch”. It has a clear mission statement, which she phrased as
the site-of-record for that startup root-system and everything that springs up from it, cycle-after-cycle
and mentor/investor/board member Mike Arrington simply called
to be the paper of record for Silicon Valley
That, I believe, is in the form a journalistic mission statement should take:
- “We (will) offer the best X about Y”, where …
- … “X” is something like news or analysis or opinion and …
- … “Y” is a particular subject area.
But there’s a problem with that template. One would ideally wish a mission statement of the form “We do the best A” to be followed up by “and, obviously, people will pay lots of money for A”. Journalistic mission statements don’t have that nice property.
Fortunately, at least in the case of tech blogging, they do tend to have a nice substitute. Let me explain.
TechCrunch and Pando Daily seem to have the same business plan:
- Create a popular and respected blog.
- Use the access provided by that popularity and respect to populate great conferences.
- Use the readership provided by that blog to promote the conferences.
- Ka-ching.
I have an analogous plan for DBMS 2:
- Create a popular and respected blog.
- Use the access provided by that popularity and respect to inform great consulting.
- Use the readership provided by that blog to promote the consulting.
- Ka-ching.
Other business models, such as GigaOm’s, would seem to be a hybrid of our two. All are what could be called “freemium” models, even if the other guys (and gals) sell a few ads as well. All seem to work.
Here’s what I think is the non-obvious part of our models:
Different parts of our readership are important for different reasons.
To a first approximation:
- Everybody who reads our work and benefits from it makes us feel good, and motivates us to do more.
- Everybody who reads our work and is influenced by it makes tech vendors want to be on our good side, talk to us, give us insight, please us by speaking at our events, and so on.
- A moderate fraction of our readers help us expand our readership by word-of-mouth.
- Only a small fraction of our readers chip in with helpful blog comments, insightful/tip-off e-mail, and the like, or by publicly throwing us links/tweets.
- Only a small fraction of our readers are likely to ever give us money.
I think a lot of successful journalistic (or quasi-journalistic) business models will be similarly layered.
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