Monday, February 12, 2018

Houston journalists go independent, talk finances and paywalls

Houston TV journalists strike out on their own, and open up to mikemcguff.com about making money, including turning on a paywall


A typical day for Covering Katy founder Dennis Spellman starts at 4am.

With coffee in hand, Spellman reviews overnight stringer video feeds, incoming messages from readers and all of the local news sources.

"If it happened overnight in Katy, my goal is to have it posted when people wake up," Spellman told mikemcguff.com

After hours of the morning news rush and his cups of joe, Spellman then heads into the office just off the Grand Parkway and the Katy Freeway.

As the president of an independent news site covering an entire city's news, Spellman must wear many hats. Part of his day can be spent in a networking meeting, on a sales call, or in a strategy session with a vendor. Or he could be out reporting from a Katy ISD Board of Trustees meeting to a breaking news event.

"I bring my gear and my laptop and post from the scene," he told me.

That was apparent during Hurricane Harvey last summer. From on the scene reports from a road rage homicide in Cinco Ranch, to a downpour at Barker Dam and Highway 6, to homeowners being evacuated, Spellman saw and reported it all.


"I was out in the field when possible, but information was coming in so quickly on my computer, that the best use of my time was being at my desk," Spellman recalled. "Still, in field reports were needed so I posted enough videos from the field that several people remarked that it seemed like I was everywhere. Facebook live has helped in that area."

Spellman has been a journalist since starting out at WCSH-TV Portland, Maine in the early 1990s.

He became a familiar face on CW 39 KIAH's newscast for nine years staring at the debut of its return to news in 2000.

In 2011, the same year he went to work for News 92 KROI, Spellman started Covering Katy.

"When I moved to Katy nine years ago it was clear that this community of 300,000 plus people had no news outlet that was aggressively covering the news," Spellman remembered. "We were loaded with magazines that were doing lots of fluff but no one, not even the newspaper of record, was covering news in any meaningful way."

After News 92 went off the air, Spellman decided to run the site full-time.

"At times I’ve had to reach into my own pocket to keep the lights on, but market forces are on my side," Spellman said. "When I started people would not advertise because I did not have a print product. Now advertisers don’t even ask if we also have a print product."

Now Spellman might be covering Katy with gusto, but he still has to compete with the rest of the Houston media market from newspapers, TV, radio and online properties. An announcement at the end of Janurary 2018 signaled even giant players like Google want a piece of the local news game.

And that gets to why I am writing this entire post.

A few months ago, Spellman emailed me to let me know he was taking his site behind a paywall. That's right, instead of a free product with advertising, readers would have to subscribe and...gulp...pay to see the content. You know, just like people did in the pre-internet days.


HOW THE COVERING KATY PAYWALL WORKS

Readers get four free stories every 30 days, but to have complete unfettered access they will need to pay $5.95 per month, or they can choose an annual plan where they get one month for free. The annual price come out to $1.25 per week.

"The same cost for my local newspaper when I was a delivery boy in 1979," Spellman said.



It's an idea that is actually catching on in the journalism world. The Houston Chronicle as a free site chron.com and then the pay-wall subscriber site with the news you'll find in the newspaper at HoustonChronicle.com.

This new "revolutionary" idea of paying for news even caught the attention of the New York Times in early February. In fact, reports say the "Old Gray Lady's" paywall is working well for the venerable newspaper.

"During the dark days I told my readers that I was shutting down and many wrote back and said they’d be willing to pay a subscription to keep [Covering Katy] in business," Spellman said.

That's when Spellman found LION.

 The Local Independent Online News Publishers' mission is to, "foster the viability and excellence of locally focused independent online news organizations and cultivate their connections to their communities through education and action."

So now independent journalists have a place to meetup and chat about what's working and what's not.

LION Publishers Executive Director Matt DeRienzo told me these independent newsrooms face a lot of new challenges compared to working in the corporate media world.

"Many are run by journalists who are learning how to be small business owners, and have to get used to the idea of spending a lot of their time thinking about the revenue side, which is not their first love or comfort zone," DeRienzo told mikemcguff.com. "And local independent online news organizations don't have the same kind of access to lawyers, insurance, human resources departments and IT staff that big media companies do."

Out of the nearly 200 LION Publishers members, DeRienzo tells me ten are based in Texas.

"Local independent online news organizations have a tremendous advantage in that they are run by people who live in, care about and are invested in the communities they cover," DeRienzo said. "This makes for better journalism that's more in tune with readers, and it makes for better customer service when it comes to local advertising and related services.

"They do face some of the same challenges as the rest of the industry. Facebook and Google are sucking up a huge percentage of advertising revenue, and digital ad tech has depressed what publishers can charge."

Both local non-profit and for-profit sites call themselves LION members. DeRienzo would argue even the for-profit sites come from an altruistic perspective. He believes as mainstream media reporting and editing jobs are cut across the country, it's going to take grassroots journalists to fill the gaps.

"What they do is a crucial public service, and readers are grateful for it and willing to contribute, especially when publishers explain a little bit about the resources required to provide this service and how the business model works," he added.

Over the last year, DeRienzo says the idea for direct support from readers to supplement advertising and other revenue streams has taken root in most of the LION members' minds.

"It's what some would call a paywall requiring a subscription to view stories after a certain number each month, and for others, it's more of a voluntary membership or statement of support for what the news organization is doing," DeRienzo said. "A number of sites have had voluntary paid membership programs for years, but are getting more serious about developing that as a revenue category now."


TEXAS LION MEMBERS


Marisa Trevino Latina Lista
Ashley Fisher Austin Monitor
Ken Martin The Austin Bulldog
Charlotte-Anne Lucas NowCastSA
Nelson Thibodeaux Local News Only
Field Walsh TXK Today
Tasneem Raja The Tyler Loop
Dennis Spellman Covering Katy
Colton Sanders Paris Free Press
Joe Hyde San Angelo Live



i45NOW


i45NOW is another independent news operation in the Houston area.

It serves the Clear Lake (where the NASA Johnson Space Center is located) and surrounding areas focusing on breaking news, traffic, weather and community happenings with a TV approach to coverage.

Executive Editor T.J. Aulds agrees there is a need for hyper-local journalists.

"The audience is still starved for information but they want information on the everyday things in their lives," Aulds explained to mikemcguff.com. "Will I make it to work today on time or will traffic hold me up? Why are there so many police cars in my neighborhood? How bad is the flooding in my neighborhood, my friend’s neighborhood? What’s the new business being built on Highway 3?"

The operation had a soft launch in 2015 and became fully operational in April of 2017.

"Now, while we want to make huge amounts of money, we designed the platform to build an audience first," Aulds added. "That shows sponsors that our platform can deliver and in many ways they come to us or are at least very familiar with us and understand what we are doing before we ask for money."

Aulds first thought of the idea of i45NOW (then known as Galveston Bay Now) while working at KHOU 11 during Hurricane Ike in 2008. He believes the audience doesn't want to come to a site for news and information, but wants that information to come to them on whatever platform they were most comfortable.

For now, i45Now is a Facebook-centric news operation.

However Aulds' opinion differs when it comes to paywalls.

"i45NOW was specifically designed and its business plan created to avoid going to a paywall," he said. "In fact our tag line is, 'It’s your news, why pay for it?'"

Aulds says i45NOW's revenue stream is broken down into three categories:

1. Sponsorships that are done in a "native" advertising format. These are not traditional display ads etc., but a story on the client with a clearly marked SPONSORED CONTENT label.

2. Selling Houston TV stations footage and information from news scenes that happen in the i45NOW coverage area. i45Now is just one of the "stringers" the Houston TV news departments hire to film and report stories from the field. Stringers shoot a lot of video for stations overnight and on the weekends.

3. A recently launched video production services arm. The company will produce in house or promotional videos for clients. The Houston TV stations also produce ad spots for clients. Many of the TV commercials airing in Houston now were created by the TV stations themselves.

"We are designed to rely on our other revenue streams to pay the bills," Aulds said. "That doesn’t mean I won’t ever consider some sort of added value program way in the future. But it would have to be an added value where you get more than what you get already for free But the paywall concept is not something in our plans. It’s been my experience that paywalls create a mistrust with a mass audience."

The Texas Monitor



Then there is the non-profit model that accepts donations from readers and major funders.

The Texas Monitor's tagline is, "Independent Journalism Defending the Public Trust."

The site, which has some names you will recognize from the now defunct Texas Watchdog writing for it, is about to celebrate its first year.

"I would argue we are the only news organization in Texas that looks solely at corruption, transparency issues, and questionable actions in government," editor Trent Seibert told mikemcguff.com. "Investigative and enterprise reporting is costly, but needed. Imagine a state or nation where there was no probing reporting or deep reporting. We would be back to having an army of Boss Tweeds running government."

Seibert, who previously worked for KTRK abc13, says the site has several big donors who are very interested in erasing public corruption. They want a spotlight put on elected officials who may not be doing the right thing in their opinion.

"These donors have given us free rein to look at any official in any party with neither fear nor favor," Seibert added. "And if you look at our work you can see we have done exactly that. If we can cut back on misdeeds and wrongdoing in government, that's what our donors want us to do."

These donors want anonymity because of the type of investigation the site conducts concerning wasteful spending and bureaucratic bungling.

"Our supporters generally don't want to be known and possibly targeted by the same officials we are reporting on," Seibert says. "I am sympathetic to that. That said, any donor who wanted to put strings on our reporting, I would show them the door."

The Future


As for Spellman, he has already received reader support for his new subscription based model.

He is expanding too.

In a deal with veteran journalist Jamie Mock, the two have opened Covering Fort Bend.

With a team of people to pay for like video freelancer Steve Ottesen (formerly of KNWS 51, KIAH 39, News 92 KROI) and writer George Slaughter, Spellman hopes his pioneering effort pays off.

"The paywall is not guaranteed to work but I believe it’s the only path forward for most local independent online news publishers," Spellman said. "I think that three years from now, people will be accustomed to paying for certain unique content like quality hyperlocal news. Right now many people are accustomed to getting everything for free.

"This gig didn’t come with an owners manual. We’re all figuring it out as we go along."





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