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Jan. 20, 2016, 9:31 a.m.
Business Models

With Capitol and Campaign Hound, UNC students are learning the sales side of media (and it’s not easy)

The subscription products offer users transcriptions of 2016 campaign events and all the proceedings in the North Carolina General Assembly.

As soon as the gavel drops on April 25 to open the 2016 session of the North Carolina General Assembly, every single word spoken publicly in the legislature will be recorded and transcribed by Capitol Hound.

Subscribers to Capitol Hound, which is run by the Reese News Lab at the University of North Carolina, receive access to transcripts of all the proceedings in the state’s legislature. Users can also sign up for specific alerts that notify them whenever specific keywords are mentioned in the General Assembly.

Now, the Reese News Lab is launching another product, Campaign Hound, that will offer transcripts from all the candidates’ public events in North Carolina’s 2016 gubernatorial and Senate races. Last year, the News Lab received a $150,000 grant from the Knight News Challenge to develop Campaign Hound.

With Campaign Hound, the Lab hopes to work with other news organizations around the state to capture audio from campaign events. It also plans to hire a network of freelancers to cover different areas of North Carolina.

While the goal is for Campaign Hound and Capitol Hound to be self-sustaining, subscriber growth has been slow, and the projects are still almost entirely funded by grants.

“In a perfect world, we would have enough paying subscribers to continue to offer it to journalists for free and cover our own costs,” News Lab associate director Sara Peach said. “That’s not where we are right now.”

The Reese News Lab works with UNC students to research and develop new media products. The News Lab launched Capitol Hound in the summer of 2013, and began its first pilot cycle in time for the 2014 session of the legislature. (North Carolina’s General Assembly works in a unique way: Every odd year there’s a Long Session, which usually lasts for eight or nine months, but in even years the assembly meets for the Short Session, which typically lasts for a few weeks in the spring.)

For Capitol Hound, the News Lab records livestreams of all the proceedings in the General Assembly and then sends them to Cloud Factory, a Durham, N.C.–based company that employs remote workers and uses a mixture of automated and human transcription that the News Lab says ensures the results are at least 85 percent accurate.

“On the first pass-through, a computer takes a stab at transcribing the file, and then actual human beings look at it to make sure it’s up to par,” Peach said.

Before it launched, Capitol Hound set ambitious goals for itself. A subscription to the service costs $800 a year (Campaign Hound will cost $1,200 a year).

Capitol Hound wanted to sign up 108 subscribers in its first year, 405 subscribers by the end of its third year, and 785 subscribers by the end of its fifth year. The Lab originally forecast that Capitol Hound’s revenue would exceed its costs by the end of the third year.

That hasn’t happened. Though the number of subscribers has grown, it’s been slow. For its first session, the 2014 Short Session, Capitol Hound only had eight subscribers. It had 29 subscribers during last year’s General Assembly Long Session.

The Lab originally forecast that its Capitol Hound’s revenue would exceed its costs by the end of its third year. That’s unlikely to happen, but Capitol Hound received a $50,000 grant from the University of North Carolina that enabled it to provide free access to the service to about 40 different newsrooms across the state.

It’s unclear exactly how many journalists are using the service, though. Many of the reporters I contacted to discuss Capitol Hound told me they hadn’t used the service. “I signed on at the beginning but just never had occasion to actually use it,” said Charlotte Observer political reporter Jim Morrill, a former Nieman fellow. “It’s nothing against them.”

The grant from the University and an earlier Knight Prototype Grant have helped the Lab continue to run the program at a loss.

The Lab pitched Capitol and Campaign Hounds to newsrooms as ways to cover the legislature or campaigns with diminished resources. The total number of newspaper reporters covering statehouses nationwide fell 35 percent between 2003 and 2014, according to a 2014 Pew Research Center study. During that same time, overall newspaper newsroom staffing fell by 30 percent.

In 2014, according to Pew’s data, there were 47 reporters covering the North Carolina General Assembly in some capacity, with 18 assigned to the beat full-time.

In addition to selling the service to journalists, the team behind Capitol Hound wants to sell the product to lobbyists and lawyers who need to know what’s going on in the legislature. That’s been tough for the News Lab’s students, who have until now been the primary salespeople for the product.

It takes time and practice to become experienced at sales, and the students, who were mostly novices, were primarily relying on cold-calling potential clients. Samantha Harrington, a recent graduate who worked on Capitol Hound, said that in the early days of Capitol Hound she called more than 500 numbers looking to sell the product and only received two responses.

“It’s hard when you pick up the phone and are talking to a 20-year-old that you don’t know, with this service that you’re not 100 percent sure is going to work because this is just the pilot launch,” Harrington said. “It was hard to convince those people to have a second meeting, but as the service makes more of a name for itself…and proves that this is something we can do, it becomes easier to sell.”

Many of the sales that Capitol Hound did make were because John Clark, the Lab’s director, had a relationship with those potential clients and was able to make an introduction.

With the coming launch of Campaign Hound, the Lab has hired a point person to run sales and is looking into bringing on more professionals, Peach said.

Still, the experience is a useful one for the students, Peach said.

“Sales are really hard, and as journalists we sometimes forget about that,” she said. “Chasing a story, doing an interview — that sort of work is a totally different skill set than getting someone to see the value of a service or a product and writing you a check. We’ve had some really fantastic student salespeople, but it’s still a hard job.”

Peach said the Lab will evaluate Capitol Hound after the legislature’s session this spring. It’ll also be running Campaign Hound through Election Day this November.

“This spring will be the third time we run the service, and at that point we’ll need to make a decision,” Peach said.

Regardless of the projects’ future, the Hounds underscore one of the central tensions of all the Reese News Lab’s products. The Lab has to balance its educational mandate with trying to generate enough revenue to keep the programs sustainable. It also teaches the students a valuable lesson: that even the most admirable journalism initiatives need to be supported financially.

“One of the biggest lessons I learned from the Lab was that in order to achieve the goals of journalism — things like transparency or a better-informed public — at the end of the day, you need to find a way to make that sustainable,” Harrington said.

Ultimately, the Lab hopes to strike that balance with Capitol Hound and Campaign Hound.

“The dream scenario is they both work, lots of people buy them and find them useful and we expand to other states,” Peach said. “We have had some interest from folks in other states about replicating both of those products. We’re able to be this proving ground about whether it’s effective. No matter what the outcome is, we’ll have information to share with folks across the country about running these types of projects.”

Photo of the North Carolina state senate by North Carolina Army National Guard Sgt. 1st Class Robert Jordan used under a Creative Commons license.

POSTED     Jan. 20, 2016, 9:31 a.m.
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