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May 27, 2009, 9:34 p.m.

Circlabs: a new entry in the options for sustaining journalism

Full disclosure right up front: I’m one of the partners launching the venture described herein.

This morning in Washington, D.C., Jeff Vander Clute and I announced the formation of CircLabs, a technology company based in Silicon Valley that’s building a new service to finance online news.  CircLabs has seed funding from the Donald W. Reynolds Journalism Institute at the University of Missouri.

The announcement was part of a one-day conference entitled “From Gatekeeper to Information Valet: Work Plans for Sustaining Journalism,” organized by Bill Densmore, another partner in the project along with Joe Bergeron, a Silicon Valley software engineer.

CircLabs plans a suite of services, the first of which is code-named “Circulate.”  Software development on Circulate is underway, and we anticipate launching the service during the second half of this year.

Circulate will address the challenges of how to increase traffic to media-affiliated websites, secure relationships with online users and enhance the value of news.  The Associated Press has been cooperating with us and is supportive of the service. We anticipate including a variety of strategic partners — unique investors necessary for continued development after the launch of Circulate.

Circulate is an outgrowth of research led by Bill Densmore, who was a 2008-2009 Reynolds Fellow at the Reynolds Journalism Institute at the University of Missouri.

Circulate will provide new and convenient ways for the Web to “come to” users, including social functionality that integrates, at their option, with their social network accounts.

Circulate promises to eliminate the uncertainties and wasted time of searching for news on the Web. After a simple, one-time sign-up, the user has instant access to personalized and constantly updated news from trustworthy sources around the world, delivered to the user automatically, wherever he or she may be. The user maintains absolute privacy and control of personal information.

More Americans now say they get most of their national and international news from the Web rather than from printed newspapers. Yet news publishers, and particularly publishers of the kind of essential journalism that’s necessary to sustain a democracy, enjoy a relatively small share of total Web traffic.

U.S. newspaper Web sites receive less than 1 percent of all Web page views and about 1.2 percent of total time spent online,* and within the news category, the majority of traffic goes to aggregators rather than to publishers of original news content.

Although no clear strategies have emerged for news publishers to thrive in an online-only environment, CircLabs believes that the right technology can play a key role in improving the market share of news content and increasing the Web revenue of news publishers.

At the same time, a variety of factors call into question the sustainability of the print model for delivering journalism. What we do know is that the legacy system is breaking, and that no viable online ecosystem for news has emerged. What’s needed: technology solutions to help publishers navigate toward a new service relationship with news consumers.

Circulate, the first service planned by CircLabs, aims to be a significant part of the solution. Circulate addresses two critical publisher needs: (1) the need to attract, both locally and nationally, a strong and loyal online readership, and (2) the need to monetize that audience, both directly through the sale of premium content and indirectly through high-value, targeted and interactive advertising.

Circulate will meet these needs of publishers and allow journalists to thrive in their roles as gatherers and curators of news and information. At the same time, Circulate will provide consumers with a new, post-search way to discover the news and connections they need. Circulate will serve all publishers of online news, ranging from newspapers to local news blogs. Circulate requires little or no technical integration on the part of publishers.

Some news organizations have announced plans to experiment with payment systems for content, including both micropayments and subscriptions. Circulate will offer a solution for either of these. In our view, newspapers should explore charging for online content when that content is both scarce in nature and of high utility to a segment of the audience. At the same time, we believe that revenue from advertising and other forms of commercial interactions will continue to be a critical means of financing news in the online ecosystem. Circulate will incorporate ways of generating high-value advertising revenue for participating news organizations.

For strategic reasons, we’re not prepared to describe Circulate in more detail at this time, but stay tuned! The support we have from RJI allows us to move forward in the development phase, and we will be marketing Circulate to newspaper publishers and other news distributors. We anticipate beta deployment at the end of the summer, and full deployment by the end of this year.

The principals of CircLabs are Jeff Vander Clute, Bill Densmore, Joe Bergeron and myself.

Together we combine a great deal of Internet product development experience with deep journalism and publishing experience. All of us have been active in the conversations of the last few years surrounding the future of journalism and the search for viable online publishing solutions. Jeff and I have also been serving as consultants to the Reynolds Journalism Institute.

_________

*Total U.S. Newspaper page views, February 2009: 3.06 billion; average time spent: 43 minutes, 9 seconds (http://www.naa.org/TrendsandNumbers/Newspaper-Websites.aspx). Total U.S. home Web page views, February 2009: 386 billion; average time spent: 61 hours, 11 seconds (http://blog.nielsen.com/nielsenwire/wp-content/uploads/2009/04/nielsen-online-global-lanscapefinal1.pdf). All data from Nielsen Online; newspaper data from Nielsen Online via Newspaper Association of America.

POSTED     May 27, 2009, 9:34 p.m.
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