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I don't mean to discourage him, but UCLA won a knight grant to develop an open-source college CMS last year. It's supposed to be tested on their site this year.
As I've mentioned elsewhere, the issue isn't really the CMS, it's the maintenance and hosting. There is a group of people grappling with this issue on the adviser side right now, too.
I think the CMS is a bigger problem than you think. Hosting is cheap and easy, maintenance can be handled with a good plan of action. But if you have to hack the CMS to put video or Flash graphics on the site, there's a serious problem.
I must agree fully with Megan. Hosting has been simple for us. There are many inexpensive commercial options, not to mention nearly every campus has web servers and staff who run them. Honestly, I don't understand -- what could the big problems with hosting be?
Of the student journalists I've talked to working on the Web, everyone is frustrated by their CMS. Nobody has mentioned hosting as a concern.
College papers have very little, if any, technical talent. Usually one or two dedicated guys, if you're lucky. Customizing on top of CP, et al, is an extraordinarily time-consuming headache -- even for the simplest of tasks. In my mind the CMS is *the* barrier to college papers doing real work online. I'd love to hear the easy solution to this multifaceted problem.
I too have heard of the UCLA project. It's certainly *really* well-funded and sounds incredibly (overly?) ambitious. Yet I've heard few details and minimal information about its progress.
Collaboration among all the tech grunts out there, drawing on all that experience trying to drag college newsrooms into the digital age, could be very beneficial. So far as I know, it hasn't been done yet.
I'm very interested to see where the UCLA project is at. They do have a significant amount of money to work with, but building an entire CMS (that works better than the other options) over the summer would be a commendable task.
Another argument I've heard for College Publisher has to do with their advertising network. This can't be terribly difficult to set up, though, and there are ad networks out there that I'm sure would love to have placements on student newspaper websites.