Mounting losses turn The Daily Tar Heel into a newspaper startup

Betsy O’Donovan got straight to the point.

“We have been losing money since 2011, and we have two years to figure our way out,” said O’Donovan, general manager of the University of North Carolina’s student newspaper, The Daily Tar Heel.

O’Donovan, a former Nieman Fellow who studied the newspaper industry’s collapsing business model, joined the 123-year-old newspaper earlier this month and didn’t waste any time shaking things up. At The Daily Tar Heel, she pointed out many of the same financial pressures that plague newspapers today: An outdated business plan, decreasing reserves and a lack of business-side experimentation.

She has a plan to stanch the bleeding, which has totaled about $200,000 annually in recent years.

“We have to choose a business model which is sustainable in the digital age, and hence re-invention is necessary,” O’Donovan said. “I have worked with community papers in the past and studied the models of institutions like the Texas Tribune, and I know that the only way to get back on track is to experiment.”

The Daily Tar Heel is a nonprofit newspaper run by the student journalists, advertisers and creators at the University of North Carolina at Chapel Hill. But the newspaper’s readership goes beyond students.

“I would say that we are more than just a college newspaper, we serve a community,” O’Donovan said. “Our readers are professors, neighbors, alums and longtime residents. But the engine and energy of the paper are the students.”

In 2018, The Daily Tar Heel will turn 125 years old. The staff wants to usher in the celebrations in startup mode. It’s doing that by rethinking several existing practices: its daily printing schedule, its sources of funding, the composition of the newspaper.

The next step? Follow the “Cs”.

Collaboration: The paper is asking donors and contributors to prioritize and support the sections of the Daily Tar Heel they like best, such as the sports department’s travel budget, the multimedia and podcast team or the reporting staff.

“We want to hear from our readers,” O’Donovan said. “We don’t receive any money from the university — we spend every penny we earn. So it makes sense to spend it on what the readers want most.”

Creativity: The Daily Tar Heel is looking to experiment with new sections in the paper. “We have long and often been asked why The Daily Tar Heel doesn’t provide engagement, wedding and anniversary announcements, or obituaries,” O’Donovan wrote this week on Medium. “Starting Sept. 19, we do.”

In 2017, the paper plans to launch a creative services agency composed of students led by an expert agency director. The agency will offer services such as graphic design, photography, social media and sponsored content creation to small businesses at a variety of rates.

The paper is also working on a series of new events to launch in the fall, which will be organized in collaboration with advertisers and local sponsors. On the tentative list is a travel photography workshop, a write-your-own obituary session, an iPhone video class and a podcast training session.

“Our journalism will always remain independent of these events,” O’Donovan said. “But if good stories come out of these gatherings, then the editorial board can (make) a call if they want to publish them. Our focus will always be storytelling first.”

Most importantly, O’Donovan wants the students to experiment and take risks. “Failures are incredibly illuminating,” she said. “We want to self-examine ourselves relentlessly in the process, and we want to do so in the public. We will write about the things that work for us and the things that don’t so that other community newspapers can also be part of the experiment.”

There is no single solution that will solve the Daily Tar Heel’s problems, Donovan said. “In fact, there are many solutions, many eggs. Which experiment works for which section, remains to be seen.”