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Abstract
Conventional business advice says that for any firm, many sources of revenue are better than a few or just one. The logic is that by diversifying its revenue, the firm could improve its financial performance and in turn, its chances for survival. This study tested that with independent Web-native news ventures. These entrepreneurial ventures are an emerging facet of digital journalism, and they matter to the communities they serve and to journalism generally. However, data gathered in a survey of 127 independent news sites in the United States do not favor the logic of diversification. For-profit news sites performed the best with scant revenue diversity. Non-profit news sites did not perform any better with diversity.
Notes
1. The studies’ revenue data spans 2010–2013. Four news sites appeared in each report: the MinnPost, New Haven Independent, Texas Tribune, and Voice of San Diego. Each was in the present study’s sample and one of them responded.
2. US tax law requires ventures with legal status as non-profits to put revenues in excess of expenses toward their programs and services. They can accumulate a budget surplus to that end.
3. Self-financing accounted for 0.1 percent of their income.
4. Paywalls are another example. Various forms of them are often named as revenue options. The problem is that paywalls run off readers, and a site that loses audience share loses its value to advertisers (Athey, Calvano, and Gans Citation2013), and its attractiveness to grant agencies.
5. Michele’s List comes the closest, but it does not report business data for all of the listed sites. When it does, the data may not be current.