8 More Community Sites Climb to Michele’s List Revenue Pinnacle in 2016

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Michele’s List has added eight independent community websites to its prestigious $1 million-plus top revenue category, which had previously been monopolized by a single site — 30A along the West Florida coast.

The closely watched survey of independent local news sites saw other positive trends, most of which were bootstrapped with the personal credit cards of their entrepreneurial founders. Nine sites rose to marquee positions in the second and third highest revenue categories. Overall, 78% of the 96 sites in the survey reported revenue increases in 2015, with 13% saying they doubled revenue and close to a third reporting gains of 50%.

Here’s what Michele’s List 2016 looks like in a in a table of the 22 top revenue sites put together by “The New News” (click on image below to show all three pages of the table):

First page of table with Michele's List 2016

Twelve of the 22 top revenue-producing sites are for-profit operations and 10 are nonprofits.

More sites likely would have claimed positions in Michele’s List’s top three revenue categories — its figurative platinum, gold and silver levels — but eight who made the grade in 2015 didn’t sign up for this year’s survey either because they got distracted by their workload or weren’t sure they received a followup prompt.

The eight are Home Page Media (Nashville), Front Porch Forum (Vermont) and Noozhawk (Santa Barbara), all of which were in 2015’s $501,000-$1 Million category, and Baristanet (Montclair in North Jersey), City Limits (New York City), Georgia CEO (Albany, Ga.), New Haven Independent and Twin Cities Daily Planet (Minneapolis-St. Paul), all of which had been in the $251,000 – $500,000 category.

William M. Macfadyen, founder and publisher of Noozhawk, said his publication was “tantalizingly close” to the “More Than $1 Million” category.  Regarding the new survey, he said: “If we were invited, the invitation was overlooked in the crush of stuff we’ve been working on the last few months.”  Noozhawk and the other seven 2015 success stories absent from this year’s survey were all invited to participate, said List founder and veteran community news analyst Michele McLellan.

To be included in Michele’s List, a site must meet McLellan’s  selection criteria. The complete survey of all sites in the 2016 List is here.

Summing up what she found this year, McLellan said:

“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.”

McLellan also said sponsored content (paid for or commissioned by businesses) is becoming a significant part of revenue sources at sites surveyed. Sites offering sponsored content grew by 51% in 2015 compared to 20% in 2014: “Among the for-profit sites, the significant increase in the number offering sponsored content and a small but growing number offering video advertising suggest publishers are finally seeing the limits of traditional display advertising,” McLellan said.

Although more than three quarters of publishers increased their revenue year over year, sustainability remains the No. 1 issue of the entrepreneurs who run or control the community operations. “Nonprofit and for-profit publishers alike consistently cite the difficulty of achieving financial stability as their key challenge,” McLellan said.

While the nine-year-old 30A site now has considerable company in the “More Than $1 Million” top revenue category, it continues to show a level of resourcefulness in developing revenue, audience and editorial content that other sites don’t seem to match. Founder and Publisher Mike Ragsdale prefers to call 30A a brand rather than site because it has so much going on, including a promotion-heavy radio format, souvenir shop and — most recently — wine sales with a vintner partner.

“Mike is doing a great job with 30A,” McLellan says. “I think he’s got a fairly unique location and approach to coverage that wouldn’t necessarily work in a lot of non-leisure communities. But I do love his approach for his community and I think publishers could learn from his engagement model even if they’re not taking the same approach to coverage.”

Among the 25 nonprofit sites in the survey, about half said foundation grants accounted for 50% or more of their annual revenue, while others said sponsorships or large donations were the primary source.

The six-year-old Michele’s List does not include sites of daily newspapers. To be included in the List, a pureplay must be under an independent, entrepreneurially based business entity, such as a limited-liability company or closely held S corporation. Bigger corporate-owned sites and chains Patch, DNAinfo.com and Daily Voice, which collectively operate close to a thousand sites at the community level, are not part of Michele’s List either.

Independent community sites, like those in Michele’s List, generally pursue revenue strategies that differ sharply from those at sites of local newspaper. “Indies” focus on local and regional ad sales that are usually handled by the sites’ sales staff. Newspapers, on the other hand, are increasingly going for scale through consortia and partnerships like Local Media Consortium and Nucleus Marketing Solutions, where many sales are made through computerized programming, with little or no involvement by local sales staff.

While there’s no clear winner yet between the indies and the newspapers on ad revenue, the new Michele’s List survey indicates that a good number of entrepreneurial pureplays are generating enough dollars to be profitable or at least hold their own. Newspapers, on the other hand, are generally struggling, with their digital revenue still not replacing revenue lost from their shrinking print products and stock prices of public companies selling at small fractions of their peak values around the turn of the century.

The 96 sites in Michele’s Survey 2016 represent only a small fraction of all community-based sites in the U.S., which, according to some estimates, number as many as, if not more than, 3,500 (counting all varieties of pureplays and those operated by local newspapers).

Tom GrubisichTom Grubisich (@TomGrubisich) writes “The New News” column for Street Fight. He is editorial director of hyperlocal news network Local America, and is also working on a book about the history, present, and future of Charleston, S.C.