From me to you: A usergenerated niche-site cashcow (idea)

  • Jon Lund 

Lot of folks tries to get a grip on how to monetize the “social web” these days. Here’s a shot at it, free for you to use, if you feel like it: start up your own mediahouse, publish a large number of different, globally oriented, niche, user-generated content news-sites, all of them edited by professionals: rich, deep, interesting, appealing sites, prioritised, following up and giving the user an overview of what-ever the site is about.

Niche-sites of today lacks either content or editors
Here’s what I mean: To a start think about a niche site. Think of a site dedicated to stamps. Or to birds. Or skateboards. Or tropical flowers. Or cats. Any of the thousands of hobbies or special interests around will do.

Now go try find one! Not a problem, you should think. With millions of sites on the internet, sure there are lots of these.

Surprisingly, it’s not easy. Really very few of the sites are worth mentioning. Either they’re brochure ware of international print magazines, rarely updated and with very little content. Or they belong to organisations, mostly focused on internal organisational issues. Or they’re stuff done by amateurs: occasionally great in substance, but mostly unfocused and not really mediated: you really have to do an effort to dig through blog after blog, discussion forum after discussion forum to find the bits and pieces of information you’re looking for.

In other words: there’s a hole in the market. The guys who can put together a great stamps-site, a great birds-site or a great skateboard site (etc…) very likely should be able to make a great business.

Bloggers seeks audience
Paradox: the content really is out there, only it’s (much against the will of its creators) hidden as the needles in the haystack of +50 million blogs.

Hidden in blogs, written by bloggers with the sole purpose of sharing their knowledge – though only very seldomly read by more than a handful of  trespassers on the net.

Could you do something to help these bloggers getting an audience greater than 10, surely your offer would be appreciated.

Solution: well-edited user-generated niche-sites
My idea, which now also is yours (if you want it!) is exactly this: I’d offer the ordinary philatelist, skater, ornithologist etc. a site covering this one particular subject he’s in to. I’d give him the news-site he lacks today. A site with lots of very detailed, rapidly updated information. A site with fact-checked and carefully rewritten stories edited and picked by a staff of editors.

At the same time I’d offer the nerds of the world an audience. I’d give them a site, where they themselves were the main source of information. And which due to its editorial qualities would attract hundreds of thousands of visitors. I’d even give them a name: they’d be “community writers” (like the “citizen journalists” of ohmynews.com). Do this, and you’ll see them coming to write for you just in order to see their names in the byline.

A quick and dirty mockup of a fictous stamps-website illustrates the idea. (Again: it’s free for you to use):

Filatee.com
 

Follow the money
The money in this is all about advertising. What kind of revenue you’d be able to make depends on how much traffic you’d be able to generate, which in turns relies on the number of sites you’d start up.

And it depends on the quality of the audience you attract. Advertisers like people sincerely interested in their areas of business, as they are the ones most likely to be turned into customers. And hence advertisers are willing to pay more to get in contact with them. The audience of most niche-sites makes great target groups for specific advertisers.

Main costs would be the monthly pay-checks for your editorial staff – though, remember: the content itself is free, provided to you from the users themselves, not from expensive journalists.
To futher keep down costs, my idea would be to organise the sites you’re running in clusters around the same subject, allowing each editorial team to cover more than one site. One editorial team could cover both a “stamps website”, a “coins websites” and a “watches website” (all collectors items), while another could cover both “skateboards”, “rollerskates” and “BMX”.

The more niche sites you get up running, the money you should be able to make. Truly you should be able to think of hundreds of different niche-areas with a global audience worth launching. Most of these I think would find their audience, generating enough revenue from advertising to make it worthwhile. A few would really hit the roof. And some would turn out disasters – these you’d have to shot down again very rapidly, and move on to something else.

I did some rough calculations one this. Let’s pretend starting up 12 global, niche-websites over a period of one year, had two of them shot down after four month of operations due to lack of interest. And then pretend after a year you had six sites having reached their max audience with some 200.000 visits a week, three sites being visited some 600.000 a week and one site hitting a million visits a week. At full operations I guessed at costs around € 250.000 a month. I then set the prize of advertising to a cpm of € 4 and pretended each visitor were exposed to10 ads per visit.

I then entered all this into my pocket calculator. This is what it said in return: “Net profits after three years of operations:  € 4.000.000.”

Want the money? Go get ‘em!

6 tanker om “From me to you: A usergenerated niche-site cashcow (idea)”

  1. Funny post. I dare you: If the idea is so great, I would expect you to leave your post and become the Rupert Murdoch of citizen created media :-).

    Seriously while there may be some truths in what you’re saying, I would like to get your taking on the following challenges:

    (1) The commoditization of web concepts: Everybody does a me-too, so how would you cope with others copying your niche concept? And how would you keep attracting the audience you require, when there are 15 stamp sites just like yours?

    (2) How would you keep your bloggers happy? You know that the most hardcore bloggers have started their own companies where they make a living from blogging (now that’s a real business ;-)), so don’t you think they will come asking for more – or just jump ship to one of the 15 competitors mentioned above?

    (3) Most blogs have zero readers, so how do you compute that a site can attract the audience you mention within a year? What is it that makes you think it’s so dead easy to build traffic over night?

    (4) Who would sell your ads? And what are your thoughts regarding pricing? (which seems a bit low to me)

  2. Hi Mads,

    Great questions! Here’s my take on them:
    1. Nothing is really unique in the concept, and entry barrieres surely are low. Survival in a competitive market therefore mostly depends on the quality of the job your doing. If you do it good enough, users will like you, and stay with you and your site.
    However note that even if someone should come around with a site more appealing to (parts) of your users, they won’t necessarily abbandon your site alltogether. What they’ll do is more likely starting to use this other site alongside using yours. There’s room for several good sites within a particular field of interest.
    If however someone should succesfully wipe you out, I’d advice you to move on, launching yet another site in another area of interest.

    2. Keeping the “community writers” happy is very crucial to the idea. They’ll have to feel that the sites are their sites. Probably you’ll want to engage trendsetters, experts and organisations within the different areaas of interests your involved in. Get them to join your advisory board etc. – and make sure they see it as a win-win project. Remember: you’re offereing them a professional mediaproduct within their very area of interest. Your offering them fame. And your offering them power. They’ll like that!

    3. It’s very diffucult to say how large an audience the sites will attract. In my guessing sites vary from 200.000 to one millions weekly visits, which would put the sites somewhere between number 15 and 30 on the Danish top-list. But really you’re adressing a worldwide english speaking audience a size of factor 100 or more compared to the size of the Danish speaking population. I think this might be possible.

    4. Selling ads would at a start be done by thirdpary salesmen – perhaps Google, Ouverture, MSN or the like. Pricing is a bit low. If you’re good at it, and have a dedicated sales staff, you might be able to make a cpm of 32 euros – not 4 euros! – on a niche site like the ones I propose. So you might say this figure is somewhat conservative.

    Best Jon

  3. Hi Jon,

    What a wonderful provocation – the incarnation of many peoples’ dream. If it was that simple more would have done it. But those who have tried may have thought too small.

    Between the two of us, thank you for the idea !

    Best Morten

  4. Here is an example. I just launched http://www.localdatespots.com – it is a community based site (for dating ideas), which I consider to be a pretty niche area. Yet I’m having trouble generating user content – people might come, browse, but they do not contribute. How do I get people to contribute?

    Thanks!
    Marina

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