Revenue Streams 101: Building a Profitable News Business

Introduction to revenue streams in digital news

Independent publishers need revenue diversification to be sustainable. Beyond reader revenue, local news outlets should explore other opportunities to generate multiple revenue streams, including ad sales, paid sponsorship, grants, and philanthropic donations.

This guide looks at how independent publishers and content creators can make money from digital news. We will explore different revenue streams that are available to them.

Indiegraf provides tools, direct support and capital to grow your audience and drive multiple revenue streams. Book a free chat with us to share your challenges, and we will provide tailored insights on how Indiegraf’s technology and services can help you overcome them. 

Digital advertising revenue streams

How is advertising a source of revenue?

Ad revenue is the lifeblood of news organizations big and small. From the tiniest indie outfit to the New York Times, advertising is a solid way to monetize a website, a newsletter or even a podcast, and give publishers more time to focus on why the publication began in the first place — journalism.

Understanding your audience: The foundation of ad revenue

To develop a stable ad revenue strategy, you need to figure out why advertisers would see your publication as a good way to reach their target audience. And you can’t do that until you know who your readers are. 

“One of the best ways to understand your audience is just to start collecting data early on,” says Allison McIlmoyl, Senior Product Manager for Advertising at Indiegraf. 

That means connecting your website to services like Google Analytics, as well as distributing demographic surveys, to figure out your audience’s quirks and habits. How often do people visit your website? What percentage of them click on your publication’s email newsletters? How long do they spend reading particular stories? What’s their education level or household income? 

The resulting data, McIlmoyl says, can help you build out a customer persona, or a model of the average reader using your website. By doing so, she adds, you can better understand the sorts of companies who’d make a good advertising partner. At the very least, you can learn which advertisers to avoid.

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How much should I charge for an advertisement?

When setting ad rates for the very first time, don’t be afraid to go low. In fact, McIlmoyl says, don’t be afraid to give away freebies to friends or contacts with businesses. Your first customers will get some free exposure out of it, and you’ll start building your credibility as a venue for other organizations to buy ads. 

If you have existing data, find your average monthly contribution by dividing your monthly recurring revenue (MRR) by the total number of members. If you’re just getting started with reader revenue, consider surveying readers to determine what they’d be willing to pay per month — then use this number as a starting point.

Read our expert guide on strategic pricing for digital publishers.

How Indiegraf drives ad revenue

Using Indiegraf’s products and services, publishers can do everything from understanding their audience to growing their revenue. Indie Ads Manager specifically lets publishers serve ads to their website or email newsletter, monitor their publication’s audience and even give metrics to advertisers in real time.

The Indiegraf Experts team also provides invaluable support to publishers who are already wearing many hats at once.

Subscription-based revenue streams

What is the subscription revenue model?

Subscription-based revenue streams are among the oldest ways for a publisher to get paid. They predate the rise of mass advertising in newspapers and magazines in the 19th century — and today, they’re a refuge from plummeting print and digital advertising rates. 

From hard paywalls to freemium deals, indie publishers and content creators are using a myriad of strategies to bring in money from regular readers.

The model is simple. Readers pay a fee to access a publication on a weekly, monthly, or yearly basis. Some publications throw in perks or bonus material to subscribers, while still permitting limited access to non-paying members. Others strictly guard access to paying members through the use of a digital paywall. 

Indie publications today turn to subscription fees as a way to generate consistent income without leaning on advertising or sponsored content. And they’re not alone. Even big players like the New York Times are focused on attracting and retaining long-term subscribers by restricting free access.

Your publication’s subscription model for news will vary by the size of your audience, the scope of your editorial ambitions, and your brand recognition. But there are a few key points for any news publisher to consider when drafting up their publication’s reader revenue model. 

Types of subscription revenue models

No two publications operate in exactly the same way, because no two audiences have the same views on paying for media. 

The digital landscape has given rise to a variety of subscription models, each designed to balance the need for revenue with audience engagement, ethics, and accessibility. From traditional paywalls to more nuanced approaches like freemium models, publishers are constantly innovating to find the right fit for their content and readership. 

Paywalls

A paywall is a digital barrier that restricts access to online content and requires users to pay a subscription fee or make a one-time purchase to view the content. A hard paywall forces readers to pay to read even one article from your publication. There are no freebies or grace periods. Major newspapers like the Wall Street Journal use a hard digital paywall, although the WSJ does give limited access to readers who it believes may pay for a subscription in the future.

Freemium

Instead of locking everything behind a hard paywall, a freemium subscription revenue model gives readers limited access to your publication for free, while opening everything to paying subscribers. This is one of the most common subscription models, with newspapers like the New York Times giving free access to five articles a month.

Free trial

The free trial is essentially a combination of the freemium and hard paywall models. Readers must sign up for an account and, eventually, pay, but can read for free for a limited time. For example, National Geographic offers a 30-day trial for free on an annual subscription to its digital magazine. 

Micropayments

Instead of charging flat subscription fees, the micropayment model charges readers a tiny fee (sometimes as little as 20 cents each) by the number of articles they access from your publication. This subscription revenue model is relatively new, but publications such as the Winnipeg Free Press have experimented with it.

Impact of subscription revenue streams and news paywalls on readers

Generally speaking, the more restrictive your publication is around free access, the tougher it will be to grow your audience. There is evidence that paywalls can drive readers away from your publication. Everybody loves free stuff, and forcing people to pay, especially through auto-renewing their subscription, isn’t going to be popular with everyone. 

And that’s alright! At the end of the day, you need steady money to pay your staff, freelancers and all other expenses that come with running a business. For an indie publication, subscriptions provide a stable source of revenue independent of the ad market, as well as a way for readers to invest in the publication’s success. Subscriptions build community and the stable operating revenue your publication needs to grow. 

Membership programs

Donor. Supporter. Member. Sustainer. Paying subscriber. All these words mean one thing: someone who makes financial contributions to a publication. In this article, we use them interchangeably — but no matter what word you use, you should think about how to steward these readers. 

Tips for developing rewards for news donors

As your publication grows, you may want to offer small perks as a show of appreciation for your donors. (Some outlets call it a membership program, donor perks, or rewards.) 

Offering these perks can help reinforce the value of their contributions and encourage ongoing financial support, ultimately enhancing your revenue streams.

No matter the name, picking the right perks can increase loyalty among your biggest fans. For example, giving them a peek into your finances can make them feel like they’re helping you build the news organization, or inviting them to meet your staff can help them feel closer to your cause.

When you have the capacity to develop and manage a rewards program, the first step to take is to ask your readers what type of incentive they value the most. 

A checkbox question is an easy way to collect and analyze responses. Provide some suggestions that are realistic for the publication and leave room for respondents to share their own ideas with an ‘Other’ option.

Tools and platforms

Indie Website is a platform purpose-built for news publishers that allows you to seamlessly connect your digital tools — from ad management to newsletter publishing. It also makes creating and managing reader subscriptions flexible and easy for you and your readers. Request to talk to an Indiegraf Expert for more information. 

Guide to strategic pricing 

For independent publishers and content creators, strategic pricing involves carefully balancing reader affordability with sustainable revenue streams. This may include implementing tiered pricing models, offering special promotions, or adjusting prices based on audience feedback and market trends.

Effective strategic pricing helps publishers maximize their revenue potential while maintaining reader loyalty and supporting their journalistic mission.

Explore related content 💡 Free vs. paid content: Exploring the subscription revenue model for news publishers

How much should I ask for?

Economists will tell you that market forces — supply and demand — determine how much your readers are willing to contribute. That said, you can always make a suggestion. We recommend sticking to the rule of three:

• An amount that most readers can afford to contribute for now
• An amount that is a little lower for readers on tighter budgets
• An amount that is a little higher for readers who can afford it

What is customer lifetime value?

Customer lifetime value (CLV) represents the total dollar amount of donations or subscription revenue you can expect from your average reader. It’s a great tool to leverage for strategic pricing as you make decisions about increasing or decreasing your prices because your CLV calculation is a snapshot of a given point in time.

There are many ways to calculate CLV, but perhaps the simplest method is to account only for revenue, not costs. It doesn’t matter which method you use, as long as you stick with it over time.

The best way to use CLV is to calculate it regularly, such as every quarter, and benchmark against yourself. You can also use it to measure the impact of changes — like increasing or decreasing your recommended donation amounts. 

Check out Indiegraf’s free CLV calculator! It’s easy-to-use, designed for news publishers and will help you make smarter decisions about audience and revenue growth.

Sponsored content and native advertising revenue streams

Sponsored content not only provides a reliable revenue stream but also allows you to align advertisers with your target audience’s interests, helping you sustain your publication while delivering value to your community.

Is sponsored content worth it?

“Journalists have to be paid for their work,” says Ramona Wildeman, Sponsorships Manager at Indiegraf. Typically, reader subscriptions aren’t enough to cover salaries, benefits, office space, equipment costs and other expenses on their own. So many indie publishers turn to direct advertising deals and sponsorships. 

Wildeman says deals with advertisers and sponsorships can give indie publications some breathing room. Instead of constantly launching fundraising campaigns, publishers can carve out a budget through sponsored content and paid ads. “You’re not constantly chasing that money,” Wildeman says. “That’s the ideal situation.” 

Boost your paid sponsorship revenue with expert tips on effective communication! 👉 “How to develop sponsor-centric messaging: An Indiegraf Experts guide”

Why sponsors prefer newsletter placements

Indie publishers have all sorts of options to drive digital advertising, from paid ads to sponsored content. But Wildeman says newsletter spots are ideal for advertisers. “That’s where you’ve got a captive and engaged audience,” Wildeman says. “Generally speaking, that’s the best return for the sponsors.” 

Advertisers want engaged audiences who are willing to click and convert into paying customers, and regular newsletter readers typically fit the bill. 

Don’t wait until you have the perfect media kit

In a nutshell, a media kit is the basic package publishers give to advertisers that outlines their value proposition, types of advertising, and — most importantly — their rates. Wildeman says there’s nothing inherently wrong with having one. The act of putting together a media kit, she adds, can be validating for a publisher. 

Publishers shouldn’t wait until they have a perfect media kit to start selling ads. “If you’ve got 5,000 subscribers, that’s 5,000 people — you don’t need to have something fancy,” Wildeman says. All you really need is a compelling statement about what you have to offer as a publication, any audience demographics, and the basics of your open rate or click-through traffic for wherever your ads are running on your website or newsletter. 

How to create a sales proposal

For publishers unused to advertising, crafting that initial sales proposal to a small business, event, or community organization can be the toughest part of the process. They might not even know who you are. To Wildeman, putting your publication on the map is your first priority. “The likelihood of them going to advertising if they don’t even have a clue you exist —  it’s probably not going to fly,” she says. 

So start your sales proposal to a potential advertising partner with a quick introduction and a link to your newsletter. Give them a chance to peruse, and really understand what you’re delivering to your audience every day. Alternatively, if you’ve got an individual news story that does well, let your new prospect know. Ultimately, you’re trying to turn a hard sales pitch into an ongoing conversation with a client about what you offer, and how you could be useful to them. 

Grants and other funding opportunities

Good, impactful journalism takes time, effort and money. This is why journalism grants and funding are essential — and fortunately, there are many opportunities available for a variety of projects, from investigative journalism to documentary filmmaking.

We’ve compiled a comprehensive list of grants for journalists and fellowship opportunities will allow independent publishers and journalists to pursue their project. Check out the full list here!

Whether grants make up a big or small part of your revenue streams strategy, more opportunities are out there for journalism outlets of all sizes. While there are a lot of opportunities out there, but that doesn’t mean it makes sense to apply for all of them. There are two ways to think about grants: as part of your revenue or as seed funding.

Nonprofit media outlets that get some of their yearly income from grants should create lasting connections with their funders. This will help ensure ongoing support. Building these relationships is important for their success. They should also work to renew these grants each year.

For other outlets, one-time grants should be considered investments for growing targeted aspects of the business (membership, audience etc), not as a source of revenue. Select your grants accordingly.

How to apply for a journalism grant 

Indiegraf co-founder and CEO Erin Millar shares her best advice for getting started with the grant application process. 

1. Talk to someone: Pick up the phone and talk to a program officer. There’s always a decision-maker behind the screen, often assigned to assist people with exactly the questions you have.
2. Be upfront: Have a conversation about journalistic independence and the terms of involvement off the top, especially for funders that don’t typically support journalism.
3. Look at the actual costs: Beyond the time and energy it takes to get a grant out the door, keep in mind that, unfortunately, most grants do not cover basic operational costs like tech, labor and accounting. 
4. Articulate the impact of your work: This is about using the power of storytelling to explain what exactly the stories you plan on producing will do for the community you’re trying to serve. 
5. Expand your network: If grants are a big part of your funding strategy, Millar recommends putting together some kind of advisory board made up of funders who can help with networking and strategy.

Tips for writing a grant application

Save your application! You can often repurpose content from previous grant applications, but only if you’ve documented your late-night efforts. Since many applications are submitted by online form, be sure to copy the text to your own records before you hit send. 

For more tips on grant writing, check out this guidebook produced by the News Media Alliance. 

Donations, crowdfunding and fundraising

While reader revenue is still a new model in the digital news industry, charities and nonprofits have had decades to test, refine, and perfect fundraising strategies. They don’t limit themselves to the digital sphere, instead going wherever necessary to meet philanthropic-minded individuals (or, people who just really care about their cause) where they are. 

Here are a few tried-and-true fundraising tips you can borrow for your next fundraising campaign.

Building relationships with donors

What is donor stewardship in fundraising?

Donor stewardship, or donor relations, is one of the top fundraising tips. It is the process of building and maintaining relationships with donors or supporters to ensure ongoing engagement, satisfaction, and support.

Why is donor stewardship one of the best fundraising tips?

One of the best fundraising tips we can give you is to go beyond a thank you email! Your supporters are your biggest fans.

When you have the capacity, consider building out a membership program. Survey your audience to see which perks they’d appreciate the most, like a monthly behind-the-scenes email, discounts to events, or swag. They’ll feel extra special and even closer to your newsroom, increasing the chance that they’ll recommend you to their friends or make additional contributions.

By prioritizing donor stewardship, publishers can cultivate deeper connections with supporters, enhance loyalty, and sustainably support their journalistic mission through continued reader support and engagement.

Crowdfunding strategies for news publishers

What is peer-to-peer fundraising?

Have you ever had a friend ask for donations on behalf of their favorite charity? Many nonprofits and charities rely on peer-to-peer (P2P) fundraising to generate revenue leading up to a flagship event, such as a walk or run.

Ask your supporters to be your ambassadors

The easiest way to do this is to ask your readers to spread the word about your newsletter (or revenue campaign!). You can use free design tools like Canva to create customizable assets for your readers to share.

If you’d like to take this a step further, you could ask your readers to put your publication on their birthday or holiday wishlist. 

When you have the capacity, you could create a referral program, rewarding your readers for bringing in new newsletter subscribers or donors. In its simplest form, this could look like a post-donation survey that asks new supporters the name of the friend or colleague who referred them, and having a team member track and follow up with top referrers.

👉Check out related content: Fundraising campaigns explained. Strategies for publishers and newsrooms

In-person fundraising events

What does it mean to fundraise through events?

Events are a great way to interact with your community, raise brand awareness and fundraise all at once. Large nonprofits and charities often do this through galas, where the admission ticket acts as a donation. These events usually include an auction featuring in-kind sponsorship donations. It’s completely possible to do this on a smaller scale with activities targeted towards the community’s interest. 

Keep in mind that organizing events also requires a lot of time and capacity. Don’t just host an event for the sake of hosting an event. If it is poorly planned and executed, it would likely damage your reputation more than it helps. Apply smart fundraising tips by listening to your community and hosting events that offer value — whether it’s meeting neighbors, learning something new, or sharing a meal.

Integrating merchandise into fundraising

Build out a membership program 

A membership model helps shift the mindset of your readers from thinking of your publication as just a news organization to an essential community organization that is doing impactful work. Often, membership programs offer something in exchange for financial support, such as branded merchandise, exclusive access or public recognition. 

According to The Membership Guide, written by Ariel Zirulnick, Emily Goligoski and Jay Rosen,  membership is, “…a social contract between a news organization and its members in which members give their time, money, energy, expertise, and connections to support a cause that they believe in. In exchange, the news organization offers transparency and opportunities to meaningfully contribute to both the sustainability and impact of the organization.” 

To build a successful membership program, ask readers what they want in return for their support. You can do this through audience surveys and user interviews.

It’s essential to take the time to talk to your readers. Ask them questions like, how are we doing? Do you still see value in our work? Is there anything that you want in exchange for a donation? If you don’t already give, what would motivate you to give?

Ethical considerations in revenue generation

When planning out your subscription revenue model, it’s important to consider how a digital paywall will affect your readers’ access to important information. Independent journalism is seen as critical to the function of modern democracies, and forcing readers to pay for such a service can turn vital journalism into a commodity. 

This can leave wealthier readers with better quality journalism about the state of their community, and force poorer ones to turn to unreliable news found on major social media platforms or clickbait sites. This can be catastrophic during emergencies affecting your readers. What would happen if, for instance, your publication’s paywall prevents someone from learning about a boil-water advisory in their hometown? 

This balance between stable revenue and an informed public isn’t easy to strike, but publications need to consider it seriously. As researchers at the University of Texas at Austin’s Centre for Media Engagement put it: “In the end, the ethics of paywalls may come down to the difference between what is good for business and what is good for society.”

Again, the question comes back to your audience. Who are you serving, and how? Understand your ideal audience. If you’re trying to cover the arts in a small region, and your ideal reader is a concert goer who wants to support the local scene, a hard paywall may push them away — even if it seems more lucrative to you. 

Case studies on successful diversification of revenue streams

The Kerr County Lead 

The Kerr County Lead is an Indiegraf network publisher that has implemented a membership model that provides access to premium content for its readers. 

This digital news publisher exemplifies an effective approach to local journalism by providing free access to most content while offering exclusive benefits to paid members, like access to their premium newsletter. They are transparent about how memberships contribute to their reporting and encourage community support, which helps fund their high-quality journalism.

The Palm Springs Post

To Mark Talkington, founder and publisher of the Palm Springs Post, most indie publishers are journalists first and foremost. He was first exposed to the ad business as a high school student while working for a weekly newspaper run by his future mother-in-law, but managing ads wasn’t in his job description. At MSN, where Talkington spent over 20 years, an entire team was devoted to ads. 

Still, when he decided to start the Palm Springs Post, an independent community news site covering the California city, in 2021, he understood just how tricky the ad business could be. “I knew how tough it was to sell ads,” he recalls. “I knew how tough it was to get people to pay for ads and I really wanted nothing to do with it.” 

Today, around half of the Palm Spring’s Post revenue comes from advertising. As Talkington found, there are ways to teach indie publishers with even a minimal understanding of the ad business how to monetize a website. It all comes down to understanding your publication’s value to its readership — and the sorts of advertisers who might want to reach them, too.

At the Palm Springs Post, Talkington says the vast majority of advertisers are service organizations like DAP Health, a nonprofit health provider in the Coachella Valley, as well as the city of Palm Springs itself. 

The publication’s reach in Palm Springs makes it invaluable to advertisers “[Advertisers are] now realizing that the best way to reach the majority of people who live in our city, full-time, is through the Post,” he says. “We have 16,000 subscribers, which is more than half of the actual physical homes in the city.” 

The key is to keep steadily raising your ad prices as your publication’s audience grows. At first, the Palm Springs Post got a contract with someone for $250 a week for prime placement inside their newsletter. Over the course of a year, Talkington says, the Post sold out of ad slots, thanks in part to the Post’s conversion rate: some ads can be in the double-digit range.

So the Post’s rates didn’t stay at $250 forever. “We went from there to $350, from there to $400,” Talkington says. “Now, I think we’re at $500 as our circulation grows and our reputation grows.” To be clear, not every advertiser at the Post pays this rate. Some advertisers are on longer-term contracts that pay less, while others are part of five and even six-figure deals for sponsored content and other ads. 

“They get a lot of value for what we do,” Talkington says of these larger deals, “but they work. They work, and it’s really nice.” 

The Palm Springs Post’s editorial team is just two people: publisher Mark Talkington, and editor/reporter Kendall Balchan. Talkington credits Indiegraf with handling the day-to-day business of drumming up ad revenue and handling audience development campaigns, leaving him and Balchan to cover Palm Springs. 

Tone Madison

Tone Madison, a Wisconsin-based arts and politics publication, has made advertising and sponsorship part of their revenue streams. Since their founding in 2014, they’ve racked up an eclectic list of longstanding sponsors: the University of Wisconsin-Madison (one of the largest employers in town), the Wisconsin Book Festival and a worker-owned taxi company called Union Cab. 

“It’s not a huge list,” says Scott Gordon, Tone Madison’s publisher, “but they’re folks who have all been consistently very good to work with.”

It can be tempting, especially in the early days, to take sponsorship opportunities from anyone. One of Tone Madison’s longest-serving advertisers is the Madison Music Foundry, a rehearsal space and recording studio for musicians. While they’ve been great advertisers, Gordon says he’s always been very ambivalent about taking a lot of money from venues or concert promoters. 

“I don’t want our coverage to come off as just promotional for venues and promoters,” he says, “even the ones that we like, or that we think well of.” Selling ads to people who might also try and butt into coverage, especially critical coverage, would be a tricky situation for Tone Madison. “It just creates such a mess, and it’s not a good recipe for having a publication that your readers can trust,” says Gordon.

“We’ve tried to get a little intentional about following up with long-term sponsors,” Gordon says. “I feel like that’s a better use of our time, on that front, than doing cold outreach and bringing in a bunch of new sponsors.” So far, it seems to be working. 

In 2023 alone, Tone Madison brought in $30,500 in sponsorship from businesses and nonprofits, according to its latest public financial report.

Oviedo Community News

Whether it’s T-shirts or tote bags, people love swag. Megan Stokes, the editor-in-chief of Oviedo Community News, has used merch such as branded tote bags and car magnets to run successful fundraising campaigns.

“I like offering swag in revenue campaigns because I think that even if people opt out of receiving it, they like that offer of a thank you gift,” said Stokes. “And when they do opt for the gift, I think merchandise can help a reader feel a closer connection to the organization.”

For a fundraising campaign that was themed around Earth Day and the environment, they offered tote bags made from recycled material to readers who donated. “I try to choose gifts that align with the theme of the campaign,” said Stokes.