A 2016 Snapshot of the Local News Startup Business

 In Featured, Research

More than half the independent online local news publications are selling sponsored content, an advertising product that only about one-fifth of the publishers said they offered a year earlier, according to a new survey.

The survey of 93 publishers representing 103 publications also showed most increased their revenue in 2015 while some experimented with new sources of revenue in addition to traditional display ads, including native advertising, events and business services.

Still, the sites are tiny by the standards of traditional news media. More than half reported annual revenue of $100,000 or less.


The publications, surveyed in March and April 2016, included both for-profit and nonprofit sites. Just over half of them (54 percent) were established in 2010 or earlier while the rest launched between 2011 and 2014.

The survey was conducted on Michele’s List, a database of independent sites that is produced in collaboration with the Tow-Knight Center for Entrepreneurial Journalism. Digital media consultant and researcher Michele McLellan created and manages with list and the survey. This is the sixth survey since 2010.

A public datafile of the survey results is available. You may request the file and submit any questions suggestions concerning the research by completing this feedback form.

Key findings

  • More than half (57 percent) reported $100,000 or less in revenue in 2015, including 39 percent with $50,000 or less. In the 2015 survey, more sites reported these low revenue levels – 66 percent made $100,000 or less, including 53 percent that made $50,000 or less.
  • More than three quarters (78 percent) reported that their revenue increased in 2015, including 13 percent that said their income doubled or more and another 29 percent that said their revenue increased by 50 percent or more. The average among those that reported increases was more than 40 percent. In the 2015 survey, 70 percent reported revenue increases.
  • Nearly half, 49 percent, said they turned a profit in 2015 while another 24 percent said they had developed a steady flow of revenue but were not yet profitable. These are about the same percentages as in the last survey.
  • Not surprisingly, newer sites tended to have less revenue. Among sites established between 2011 and 2014, half reported revenue of $50,000 or less last year. Among sites established before 2011, 29 percent reported that revenue level.
  • Advertising is the primary source of revenue – 84 percent of the sites, nearly all of them for profit ventures, said advertising accounted for 50 percent or more of their revenue. Twenty percent said advertising was their sole source of revenue, compared to nearly a third that said that the year before. Still, others who listed local advertising as the primary source listed only minor revenue flows from other sources such as business services, events, national advertising (contextual such as Adsense), small donations, syndication, subscriptions and merchandise sales.
  • Among nonprofit sites, about half said foundation grants accounted for 50 percent or more of their annual revenue while others said sponsorships or large donations were the primary source. Six nonprofits said no single source accounted for half or more of their revenue, indicating they have diversified their revenue flows. Each of the six cited a mix of sources that each a percentage of their total revenue: foundations (4 sites), large donations (3 sites), syndication, training, small donations, membership, local advertising and sponsorships (one site each).
  • Among the sites that sell advertising, nearly all (98 percent) said they sell traditional web display advertising and 95 percent said they sell display advertising directly to local customers. Only 24 percent said they publish network or agency advertising. (Local publishers often say this advertising detracts from the local feel of their sites and may undercut them with local businesses that can advertise on their sites through networks at a lower cost.)
  • In a major change from a year ago, 51 percent of those that sell advertising said they are now selling native advertising or sponsored content, compared to about 20 percent a year earlier. Twenty percent sell placement on a business directory and only 10 percent produce video advertising.
  • On the editorial side of the operation, professional journalists are part of the mix at 92 percent of the sites, including 26 percent that rely exclusively on journalists to produce content and 41 percent that rely on a mix of journalists and community members. Students and partner organizations also figure in the mix at about one in ten of publications.
  • Forty-four percent have full-time paid staff producing content, typically in combination with freelance or part-time staff or volunteers. Only two sites rely exclusively on full-time paid staff. Three-quarters use freelance or part time staff, including 14 percent exclusively. About one third rely on volunteers, including 12 percent exclusively.
  • On the business side of the operation, 61 percent have full-time paid staff and 47 percent use part timers or contractors. Ten sites rely exclusively on volunteers to raise money. In the previous survey, 47 percent said they had full-time paid staff while 70 percent relied on part-timers or contractors.
  • Three-quarters of the publishers said they draw a salary from the site, including nearly half who pay themselves full-time wages. Among the 25 percent that do not draw any salary, all but one are for-profit ventures. In the previous survey, 40 percent of the publishers were not drawing any salary.
  • Nearly half said their operation covers a community, town or suburb. One-fourth cover a metro or large city while another 13 percent cover a state or multi-state region.
  • About half said they cover general local news while the reminder said their coverage was more targeted with 21 percent covering a niche topic or a limited number of topics, 14 percent focusing on investigative news, and 7 percent covering news for a specific demographic group. Nearly two thirds (63 percent) said they produce investigative journalism at least occasionally.
  • Government and politics is the most covered topic, with 63 percent of the sites saying it is a primary area of coverage. Other top beats are: Education and schools (46 percent), crime and justice (38 percent), local business (32 percent), and local events, 27 percent.
  • Half of the organizations participate in partnerships. The most common partners are nonprofit media organizations, commercial broadcast outlets, local newspapers, and universities.


The survey indicates independent online news publishers are making progress on several fronts.

Most report revenue increases and fewer are solely dependent on traditional display advertising or another single source of revenue.

More publishers are paying themselves a salary than in the previous survey and – importantly – a greater share of the sites have paid staff on the business/revenue development side.

Part of the difference may reflect that the 2016 survey drew responses from more nonprofits (27 percent this year vs. 19 percent of the total in 2015), which are lean operations but tend to be better funded and have more formal structures than the for-profit bootstraps.

However, 25 of 28 sites that reported their revenue increased by 50 percent or more were for profits as were 42 of 47 sites that said they were profitable in 2015.

On the nonprofit side, it is impressive that six sites have diversified their revenue sources to a point where no one source accounts for 50 percent of the total.

Among the for-profit sites, the significant increase in the number offering sponsored content and a small but growing number are offering video advertising suggests the publishers are finally seeing the limits of traditional display advertising.

Still, nonprofit and for-profit publishers alike consistently cite the difficulty of achieving financial stability as their key challenge.

“Our biggest challenge is just finding the time and the capacity to build a stable revenue base,” said John Mooney, CEO and founding editor of NJ Spotlight, a nonprofit site that covers New Jersey state government. “And there is so little room for error.”

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