Innovating new revenue streams for local journalism in Europe

An important component is a nuanced review of where media have failed forward – or can evaluate lived experiences that shed new light on realistic expectations. Understanding what hasn’t worked and where critical blockers lie is just as important as charting successes in order to support advocacy and future programme development.

Characterised by their mission to cover increasingly overlooked areas and by their orientation and commitment to communities, hyperlocal and local media have revitalised the media ecosystem with new informational approaches close to the citizenship, new organisational and business models and new ways of conceiving their relationships with audiences. Through funding and supporting the creation of innovative products and solutions, marketing and business strategies, providing guidance in revenue diversification and financial planning and stimulating best practice sharing of the media outlets of similar size, LM4D contributed to the long-term sustainability of local media in Europe. At least 13 media piloted new or increased existing revenue streams with guidance from expert advisers at IMS, 10 developed strategic documents, practical guides, media-kits and other license and knowledge products and seven media automated their editorial and management processes – all of which are making their work more efficient.

The European Federation of Journalists (EFJ) organised the Local Journalism Festival at Masaryk University in Brno, Czech Republic, on 17–18 June, as part of the Local Media for Democracy  project, where participants showcased and further exchanged on their revenue experimentations. A workshop on sustainable business and revenue models focused on Monetisation Myth Busting: Understanding what works and what doesn’t, through an open knowledge sharing discussion lead by IMS Head of Journalism and Media Viability at IMS, Dr Clare Cook.

The Local Journalism Festival was designed to highlight success stories of vibrant, resilient local journalism and media as a result of this project. Forty-two grantees took part in the LM4D Media Funding Scheme, which helped to improve local and regional media’s capacity to reach and serve their communities and audiences. The funding was coupled with capacity building and mentorship.

Expected limited returns on reader revenues for local media

Against a backdrop of an overall subscription slowdown for many publications around the world, media tested reader revenue models with limited success. Expert sessions were delivered on business and revenue models, how to work on assessing potential income, how to forecast incomes and more. While economic profit is not a central objective for the promoters of these media, finding income that can cover costs – and is an effective return on the effort needed to generate it – is.

Gazeta Radomszczańska from Radomsko, a city in southern Poland with 45,000 inhabitants, is a pioneer of introducing paywall and hybrid subscription packages in Poland, and one of the more successful examples of subscription revenue model projects among LM4D. The local newspaper was founded in 2013 with the website version launched in 2019, and the only media outlet in the region specialising in investigative reporting. Its website reaches over 90,000 users every month. With LM4D support, they carried out a tech audit of their online subscription system and found technical inefficiencies were the main barrier to them increasing the number of subscribers by 22 percent.

Dublin Inquirer is an independent, subscriber-funded newspaper serving Ireland’s capital since 2015, publishing online weekly and in print monthly, with three full-time staff, one part time distribution manager and three regular freelancers. DI’s website has about 150,000 users and roughly 2,000 paid subscribers. With LM4D funding, DI expanded its coverage to Fingal County and tried an email newsletter for readers from Fingal. The team ran a marketing and subscription campaign targeted at Fingal readers, with a target of 450 new subscribers from Fingal at the end of the seven-month pilot. The reality was 38, despite running complementary newspaper drops in Fingal, direct sales emails, and posters and online adverts and boosted posts and an online advert campaign with GCN, an independent publication with an engaged readership in the area. DI’s free newsletter to turn readers into paid subscribers model for the main publication remains very successful. Sixty to 70 percent of DI’s revenue is subscription generated (50 percent from newspaper and 50 percent digital).

MarsActu from Marseille developed a “smart paywall” solution to display custom messages to users. Their team of 10-12 set out to develop a new and scalable “free” paywall with dedicated explanation on why this content is freely accessible for readers. In less than one month, 31 users subscribed to the daily newsletter via the landing page or via the pop up displayed when enjoying free access, with excellent open rate (50-70 percent). MarsActu will further work on building an ambassador team with shareholders (cafés, social centres) to increase awareness and to work with social centres to see if the outlet can financially support more workshops during the year and explore new opportunities (coworking, associations and libraries) to improve the return-on-investment of the project.

JAW.pl, a popular independent publisher of local weekly newspapers, websites and cable TV in Jaworzno and Mysłowice in southern Poland, after in-depth market analysis and consultations, came to a conclusion that the market is too small to try a paywall model. In the Polish context, only certain journalism can be put behind a paywall, which requires considerable effort. Experts in subscriptions assessed that the maximum number of subscribers, after several years of testing within our city’s population (approximately 90,000 residents with about 45,000 internet users), would not exceed 1,000. The investment required to implement and manage payments is too complicated on WordPress, and multi-platform functionality is unachievable. The Jaw.pl project has led to a deeper understanding that while enhancing content quality is crucial, diversifying revenue streams beyond advertising and subscriptions might be necessary, especially in smaller markets. This could involve exploring additional avenues such as sponsored content, partnerships and community-funded projects.

Adjacent services and strong collaborations can balance incomes

In line with other studies on hyperlocal and community media which evidence a link between the number of connections in local ecosystems, symbiosis and sustainability, the media in this programme also found strength working with other actors in their networks. Our work adds further evidence that the keys to a sustainable future are embracing experimentation and diversification while cultivating a niche offer in business terms.

As part of designing a new loyalty programme, a local publishing house in Bytow region developed a mobile App InfoGift (in Polish but also in Ukrainian for refugees) to reward users for comprehensive reading of content in print and online outlets. LM4D funded the development of the app as well as the first set of gifts, as they now await Google Play and Apple Store approval. The team has already secured partnerships with local business, which will allow them to provide gifts to readers in the long term. They also want to connect the publishing house Compass with a partner Siecportlai.pl and licence other members to use InfoGift. This is a company that brings together 120 local portals, and an agreement was developed that the application will be made available free of charge to all other willing local portals within this network – a total of 5 million recipients.

In Slovakia, Investigative Center of Jan Kuciak developed a new media partnership with Aktuality.sk – Slovakia’s most popular online media – which will publish one of their local investigations, boosting reach and exposure.

Chayka.lv – a Russian-language independent media outlet in Daugavpils, Latvia – set up a creative studio to expand its unique native advertising offering for the local market. The studio will offer multimedia content creation, digital marketing solutions and search engine optimisation. This diversification aims to attract a broader clientele base, exploring untapped markets and industries. They worked together making connections with other media, local businesses and groups in the community for more support, resources and to help reach more people, facilitate joint projects, access to grants and resource sharing, bolstering both sustainability and broader impact.

Turning grant income into revenue streams

In the LM4D programme,grantees explored how opportunities could turn fixed term or project-based funding into revenue streams and longer-term sustainability plans. It offers further evidence of how major investments can be effective when directed at the local sector.

Lisbon-based Mensagem de Lisboa turned their project pop-up newsrooms experiment into a new product they now pitch to other sponsors, i.e., local municipalities – one of them is already funding a pop-up newsroom project in another district of Lisbon. By developing the pitch book, they have been able to replicate what they did with the grant.

Nyugat is Hungary’s largest independent media outside of Budapest, with 750,000 monthly website users, developed the user-generated “I Report” system for its website and ran a two-week community fundraiser called “Be part of justice!” In their 2023 crowdfunding campaign, they reached a record number of supporters (147) and raised the record amount of nearly €8,200 in 14 days. Nyugat also participated in the one percent tax allocation mechanism which generated €3,000 in 2023. In Hungary, taxpayers can allocate one percent of their taxes to an NGO or media of their choice. For it to work, one must get readers to allocate one of their tax to your organisation, so it requires a lot of marketing effort. Nyugat is a well-known and trusted local media brand, but the local market is small and therefore it is hard to generate a significant amount.

In Slovakia, Jan Kuciak developed a newsletter that turned into an unexpected revenue stream. They set out to increase capacity of four local investigative journalists and publish their investigative reports, distributing content to the targeted audiences in news deserts regions. The newsletter had speedy growth and a high opening rate, and every issues generates several hundred euros in donations via an embedded “donate” button. Many people donate repeatedly. The team secured donors in Slovakia to fund the continuation of the project from July to onboard and train 3-4 more local investigative reporters.

LikaClub – a local media in Croatia’s Lika region with about 30,000 inhabitants – developed a mobile news app. LikaClub’s publisher Prilika GRP d.o.o. partnered with Hrvatski Radio Otočac (Croatian Radio Otočac) and has a radio stream where they inform their listeners about this option three times a day. They intend to build on this relationship for further media development and collaborative marketing efforts through a single advertising package across multiple platforms.

Responding to regional context

The counties of focus had varying economic challenges, documented by research from the Center for Media Pluralism and Media Freedom. In Slovenia, the market is characterised by a lack of diversity in the sources of funding, with media being particularly vulnerable to external influences and changes. Print media editors have indicated that around 10 percent of the Slovenian population is willing to pay for news. In Latvia, only 36 percent of the interviewees in a 2022 survey say they have read local news in the past month. Since 2017, local and regional media can obtain direct state support for the creation of quality journalism content. This is administered by the Media Support Fund which has a separate programme dedicated to supporting local and regional media. Local print media qualify for a reduced VAT rate of five percent as compensation for press delivery. In Bulgaria, political actors are among the leading sources of external pressure on local media, which impacts on their reluctancy to investigate issues that could impact on local advertising opportunities. Political and economic dependencies of local outlets undermine local trust. In Belgium, there is little transparency or equity on the distribution of state advertising. Romanian local outlets are particularly vulnerable to political pressures because much of the advertising money comes from local authorities that are willing to disburse or withhold money on political grounds. In the Czech Republic, the willingness of audiences to pay for news is low. The Hungarian context is characterised by concentrated ownership of county newspapers, discriminatory distribution of state advertising, a weak economy and advertising potential, unpredictability of municipal funding and scarcity of domestic funding coupled with the constant political attacks on foreign funding.

This media funding scheme was managed by JournalismFund Europe, allocating €1,200,000 in financial support to local, regional and community media that are struggling to serve the public interest in places where access to information has significantly decreased. The selected media also received capacity building and mentorship support managed by IMS to improve their organisational capacity, journalism innovation and business sustainability. This was part of a larger programme supported by the European Commission.