Ethan Zuckerman’s online home, since 2003

Financial models for “difficult” journalism

One of the themes I was struck by at the Berkman at Ten conference was the idea that the net is now mature enough that we should be studying what’s actually happening, not just what we think should happen. While that doesn’t sound like that much of a breakthrough, it’s useful to me, at least, in thinking about how the center takes on projects and research topics. A good bit of the early work at the Center – especially our work on ICANN – was far more prescriptive than descriptive. A project like the Open Net Initiative, on the other hand, is careful to focus on documenting what’s happening around the Internet, leaving change of those realities to related projects like Psiphon and Global Voices Advocacy.

The focus on journalism at the Berkman Center over the past couple of years has been a focus on what’s really happening, not on what we thought might happen. I suspect that had you asked Professors Zittrain, Nesson and Lessig in 1998 whether the survival of high-quality journalism in a digital age was part of the Center’s mission, your question would have been met with a curious look. Now you’re likely to get a curious look because it’s so apparent that the question is central to our research.

I’ve spent a lot of time with Berkman colleagues – and colleagues throughout the Boston/Cambridge community, including friends at the Business School, the Nieman Center and local newspapers – talking about business models for journalism in a digital age. A conversation we had on Wednesday makes me wonder whether there’s an opportunity here to move from the prescriptive to the descriptive. In other words, while I’ve spent a lot of time lately agonizing about how Global Voices might find a revenue model to sustain our work, the answer may be to look closely at revenue models people are already using to support substantive journalism in the era of blogs, Craigslist and media consolidation.

One of the groundrules for these conversations has been a focus on journalism that’s difficult to finance: investigative journalism and international journalism. This isn’t meant to imply that other types of journalistic writing – political opinion or entertainment journalism, for instance – are somehow inferior… just easier to finance. Investigative and international journalism is expensive, requiring travel, research and time. Many of the stories that result are “long-tail” stories – they’re not going to be interesting to the entire news audience as, for instance, Iraq war stories were in 2003. The people who’ve been participating in these conversations believe firmly that there’s a public interest in reporting these stories, and that this work is essential for partipatory societies even if it’s not easily supported by pure for-profit models.

A conversation about supporting this sort of journalism tends to start with a good deal of despair about the state of American newspapers and the dismal future young journalists face. Newspaper layoffs are so common that graphic designer Erica Smith is maintaining an interactive layoffs map, called “Paper Cuts“. Jill Carroll, in a paper for Harvard Shorenstein Center, documents a 30% reduction in the number of foreign correspondents employed by US newspapers. Media critic David Shaw bemoaned a shrinking “newshole” for international news, reduced 70-80% between the mid-1980 and 2001.

If we’re interested not in preserving newspapers, or the ability to make a living as a professional journalist, it’s possible that the picture changes somewhat. Accepting Dan Gillmor’s observation that people will “commit acts of journalism” – and observing that some people appear to commit these acts serially – it’s possible that there are a number of business models that might support “difficult” journalism on an ongoing basis.

Some models that have come up in conversation:

The 5% Model – One of the problems American newspapers suffer from is the difficulty of delivering a 20% return on investment year to year to investors, a level of return that’s evidently demanded by financial markets. Perhaps traditional newspaper models are sustainable if the goal was to return a much more modest – say 5% – return on capital investment.

Cross Subsidy – Related to the 5% model is the idea that newspapers support “difficult” journalism with more lucrative content – entertainment, sports and local news. If other parts of a newsgathering operation are sufficiently profitable, it’s possible to finance in-depth reporting.

The Membership Model – Newspapers outsourced much of their reporting to the Associated Press, using a shared news bureau to provide a breadth of coverage difficult for any one paper to provide. While AP is now large, powerful, and sometimes critiqued by newspapers for high fees, there’s still room for membership-based bureaus. Eight Ohio newspapers are sharing resources on state-wide political coverage in a new collaboration called OHNO, an interesting swipe at AP.

Ad Supported – The default internet business model – supporting coverage through a combination of banner and keyword ads – may be able to support “difficult” journalism, either through cross-subsidy or just attracting sufficient attention to key stories. The concern on the model is that there’s a constant temptation to fish for attention-grabbing stories. This can be a benefit in a cross-subsidy model, but it might be dangerous for a tightly subject-focused news outlet.

Niche Content – High-quality niche content can survive on subscription models. One example offered in our discussions is statehouse newsletters. Local newspapers find it expensive to provide deep statehouse coverage – subscribing to specialist newsletters may well be cheaper. And lobbyists find the content to be mission-critical and are willing to pay a premium for the information.

Foundations Pay – A great deal of high quality journalism is already foundation funded – listen to the credits at the end of an NPR show for a sense for some of the major players in the field. ProPublica, with backing from the Sandler Foundation, is promising a newsroom of 26 journalists, “all of them dedicated to investigative reporting on stories with significant potential for major impact”. This is, for better or worse, the model that Global Voices is currently using to find support.

One Rich Guy – A variant on the foundation model – which comes complete with program officers, oversight boards and all sorts of checks and balances – the one rich guy model has been responsible for some excellent journalism in the case of Al Jazeera. It’s known to be a weak model for investigative stories about the rich guy in question.

Public Funding – The BBC’s funding comes from television license fees, a form of public funding for public interest reporting. That said, it’s hard to imagine a future in which public broadcast funding is massively increased in the US – and even harder to imagine a future where independent reporters and bloggers could successfully compete for that funding. We raise this model so we can talk longingly about working as journalists in Europe.

Advocacy Journalism – Highly partisan political organizations have turned out some excellent investigative journalism – see the Polk Award Talking Points Memo won for coverage of the US Attorney’s controversy. A major concern is that while advocacy journalism on different sides of a political issue may serve to provide balance and fact-checking, it’s not hard to imagine situations in which a key issue might only be investigated by highly partisan journalists on a single side of an issue.

Sponsor a Beat – In one of our conversations, someone mentioned blogs raising money for reporters to cover specific stories. David Axe of War is Boring uses this model – I’d love other examples of international and investigative journalism sponsored this way.

Indirect Revenue – This is the model I end up advising most new bloggers to take: don’t expect your blog to make money directly, but look for the indirect ways it benefits your work. Blogs lead to freelance work, to books, to speaking invitations – it’s possible that serious journalism in whatever medium may have indirect benefits to the author that outweight direct benefits.

Our conversations have included some theoretical models as well. If you’ve got examples of people trying these models, I’d love your links.

Multimedia production – A small team might produce the same story in different media – text, video, audio – and sell to various news outlets. The ability to sell stories across platforms might make a model more fiscally sustainable. (Circle of Blue, a non-profit effort focused on covering the world’s water crisis, is pursuing this sort of model)

Translation as cross-subsidy – This is a model that’s come up a few times in talking about sustainability and Global Voices. We translate lots and lots of content to produce our site, and our translators are phenomenally talented. A service like Global Voices could serve as a showcase and legitimator for translators, a front-end to a web-based human translation marketplace, and profits from that marketplace might cross-subsidize our translated coverage. (I’m firmly convinced that someone will build a strong, multi-lingual, reputation-based online translation marketplace in the next couple of years. A major regret in life is that I don’t have the time to do it right now.)

TookTheBuyout.com – More a joke than an actual model – a site designed to give all the talented journalists who’ve taken buyouts from mainstream newspapers a place to publish independent investigative reporting. Given the name recognition of some of the people who’ve stepped down from papers recently, this might well be ad supportable.

I’d love your input on other models that people are pursuing or thinking about. This isn’t a theoretical issue for me – over the next few years, Global Voices needs to pursue one or more models to support our work, even if that model involves continuing to persuade foundations that our work is important and worth supporting. Examples focused on investigative and international journalism are the ones that are most helpful; models that are in use and supporting high-quality journalism are the most interesting ones. Please share what you know and help me get beyond a short dozen of models here.

28 Responses to “Financial models for “difficult” journalism”

  1. Jared says:

    Hey Ethan,

    I’ve been thinking about this as well – although I don’t have time to do much right now. One of my concerns isn’t just financial, it’s fact checking. I see so often the NYT quoting a source out of context; the recent run up in Iraq is a wonderful example of journalism run afoul. I think the business model has to tie in collaborative editing – so something perhaps a mixture of social networking and wikipedia. If you were successful then I would try to tie in several revenue sources – hiring for expertise (an economist is a good example), advertising, and maybe some sort of ad sharing with the content providers (the journalist/expert). What about tracking a story to suggest book material to publishing companies? You could even offer e-books of a particular story?

    Looking back at this note I’m not sure how much help it is but I share your concerns and would be happy to help in any way I can…

  2. Chris says:

    Hi Ethan,

    I’ve been thinking about this a lot as well, and I think your “Translation as cross-subsidy” point is close to what I am hoping for. But I also think there is a gap in understanding about the potential of translation in journalism because it has historically played such a background role in global media. What I see in the Japan case is that some of the most interesting English-language bloggers here are bilingual (J/E), and many are actually professional translators themselves.

    My view, and it is a very tentative one, is that there is an opening for the “translator/journalist” to emerge, but that it will take a long time for media (particularly English-language media) to even contemplate this role, because translation has traditionally been seen as “reproduction” (into another language). Translators are expected to be invisible, whereas journalists tend to be very visible. There’s an interesting juxtaposition there that will become more significant as time goes on.

    How to get a funding model out of that is more tricky, but not as hard (I think) as finding a funding model based on straight “journalist”, because in the case of translation you can offer the news article/blog entry pro-bono as publicity, and use that to find paying translation work.

  3. epc says:

    You might be interested in the work Chris Allbritton has done with back-to-iraq.com and his new gig with a “Knight Stanford Fellowship, one of America’s big journalism fellowships, to go study the feasibility of various business models for online news.”, see
    http://www.back-to-iraq.com/2008/05/your-attention-please.php

    for details and his blog.

  4. James says:

    I wonder if in fact it is the other way around. That the other journalism does not pay. If you look at successfull online media most of them have broken a story to initially get traffic. This also applies to traditional media outside of local monopolies.

    If you just factor raw page visits that people come to view the story the numbers may not stack up. But if you look at the traffic past the event then they probably do.

    Media as whole is difficult to fund. Take out the natural monopolies that develop with traditional media caused by start up costs, and then is it worth building. With a business to business magazine (the industry I am in now) most of the magazines in the stable are in effective duopolies. If we moved one of our magazines to the web then the our costs would fall by about 70%. Assuming the same staffing levels of journalists. No production costs, no distribution or printing costs. But we would lose most of our advertising revenue and all our subscription revenue.

    Most of our online revenue is supported by the offline titles. By a full page ad at rack rate and we will give you $x of online spend. It also gives us a weapon against all the online competition that does not provide editorial, like the job sites.

    For us any investment into a major investigation would have to be justified that it brings long term traffic to our site that we could then monetise. If somebody could tell us how to monetise our page views we would be grateful.

    Above you list a series of bussiness models. Ideas are cheap but which ones are working, and which titles are applying which ones?

    The other challenge is that online we probably do need as many journalists as we did offline. So where is the work cover when one of the journalists is working on a story.

    Online with blogs our competition may come from professionals in the industry sectors that we cover. They know the industry that they are in as well as us. We will lose traffic to them. But we will they have the guts to break a story? For example would you ever break a scandal about the Berkman center?

  5. David Sasaki says:

    Another (upcoming) example of the ‘sponsor a beat’ model is Spot.us. My concern with this model is that anyone willing to fund a particular article or series of articles will have a very specific interest in how the subject of that article is portrayed. I worry that those who are actually willing to put money down on the table will do so hoping to advocate their position rather than fund investigative journalism.

    I am entirely skeptical of any media operation that depends on advertising. Advertisiers and marketing firms know that it is just as easy for them to make their own media – they don’t need to piggyback on anyone elses. The only exception that I see to this are elite and exclusive communities like TED and Pop!Tech.

    Regarding international investigative journalism, one of my favorite blogs is Untold Stories from the Pulitzer Center on Crisis Reporting. Freelance journalists pitch them stories and the Pulitzer Center funds travel grants between $3,000 and $10,000. Some very insightful journalism has been produced as a result, but the model only works because there are so many recently layed off journalists who are trying to figure out what to do while floating on their severence packages. $3,000 travel grants will not fund a career, and eventually freelancers will reach an age where they need health insurance and benefits.

    In the end, I don’t see any viable model for ‘difficult journalism’ other than philanthropic or public support. (The influence of foundations on the non-profit media organizations they fund is a separate post in itself.) Indirect revenue from coffee table books and contract translations gigs can help keep an organization going, but it doesn’t seem likely to me that they can cover the core expenses of editors, copy-editors, site admins, etc. I am fairly sure that one day we will have a National Journalism Foundation similar to the National Science Foundation.

    I love that the two words I must type in for reCAPTCHA are “Cuzco Witherspoon.” If not already, there will one day surely be a Cuzco Witherspoon enrolled at a liberal arts college in New England.

  6. My last attempt at a comment seems to have been eaten (or censored!!) so will make this quick.

    What works?
    The Economist model of EIU + conferences + high frequency publication is quite powerful. This mimics the business-to-business style media.

    Dangers
    Sponsor-a-beat has huge potential for conflicts of interest.

    Public service
    Journalists pitching to foundations could provide an interesting avenue, but that focuses the journalist on the desires of the foundation, not readers.

    For me, the highest quality journalism must focus on readers, readers, readers. If the topic is something not naturally of interest to the readers, the writer must find a way to write more compellingly.

  7. Brad says:

    For what is essentially a real-life TookTheBuyout.com (plus Foundation money) in Minneapolis, see MinnPost

  8. Bev Clark says:

    This is an issue that we’re grappling with in regard to Kubatana.net. I tend to agree with David Sasaki – I don’t see many other options out there besides assistance from foundations and donors.

    We’ve tried the advertising route but haven’t had much revenue back from this especially in terms of trying to cover core costs like salaries.

  9. Ethan – thanks for launching this continuation of our discussion. I do think that all possible versions of the Economist model of cross-subsidy from related enterprises (could be books, conferences, consulting, research, paid subscriptions for early access to high-value or very specifically packaged information, translation agency) should be explored extensively.

    As a card-carrying “language monkey” I am really intrigued by Chris’ translation remarks. I think there could be a lot of places where combined linguistic and cultural translation of good reporting from various countries could be really popular. Look how much we xenophiles love the BBC and the Guardian (and would likely love Al Jazeera English if our annoying cable system carried it) – do we know that La Stampa, France 3, NHK, Gazeta Wyborcza, etc. etc. aren’t reguarly producing stuff that’s just as interesting for at least a certain American audience? I’m sure this is heretical but maybe GV’s cross-subsidy business product is selection and translation of mainstream international media? (GVLite?) You could sell not only US-based ads but also to the foreign media whose stories you were translating – what better place to reach Americans planning their next overseas vacation?

    On foundations pay – Is it only me who dreams that there might be ways for non-profit funding that avoids the pitfalls of fickle foundations, rich guys with agendas and also of the popularity contest approach, where people contribute in order to fund more investigations of Britney? A special tax on search advertising that funds a Corporation for Public Media? Len Witt’s experiment to get a community, including its local online citizen media, to support one professional journalist to cover them, is really interesting, still waiting to hear if it works. And of course Doc Searls is getting closer every day to making it possible to support your favorite media with a touch of your smartphone screen.

    Persephone

    PS I hope Jon Sawyer will jump in with clarification on the “Pulitzer Center” model – my understanding was that often these foundation-support grants pay travel for working journaists at existing media, not only freelancers. If that’s true, the “Co-funding” model seems to me like a good one to add to our list – mechanisms for even commercial media to take philanthropic money for special projects.

  10. Yvette says:

    Translation, I believe is a profitable service, whether it be an English media seeking foreign news or foreign media seeking English news. Many news companies in Korea attract readers through translation of specific foreign news (Daum, for instance, translates Wired). The translating team at Reuters Korea is larger than the reporting team.

    But while translation serves as a revenue source, I don’t think a model where reporters serve as translators would work out.

    At the JoongAng Daily (an English daily newspaper that is a sister paper to the IHT and run by a media mogul), reporters were translating as a side job because the salary of a reporter never was (and as we perceived never would be) enough for us to carry out the lifestyles that we wished. Reporters make very good translators because they have command of both languages; translating is quite profitable because there is always a consistent demand and not everyone has the expertise.

    When the company, however, tried to get reporters to do translating work as part of the job, most were very opposed to doing so. It was not just because translating for the company would not create side revenue for the reporter (although that was certainly one of the reasons). It was more because reporters had pride in what they considered to be the role of a journalist. In the end, full-time or part time translators were hired. It was interesting that while a part-time translator would earn more money, reporters who were able to do that job opted to be a reporter and not a translator. I suppose I am still old-school in that I believe that journalists, like firefighters, are not (or should not) be in it for the money. In that sense, I support the 5% model.

    Going back to translation, I think it is a good source of generating revenue (such as hosting marathons). More than a decade ago, the Korea Herald operated for a long time a translation company that was quite profitable; the people there, however, all left and created their own company.

  11. Digidave says:

    Ethan
    Excellent post. Are you aware of my project http://www.Spot.us, which just got funding from the Knight Foundation.

    It’s closest to “fund a beat” – although it’s more like “fund a story.” Community funded reporting is in my mind an option that needs to be experimented with further. At this point it’s largely untested, so I make no promises with Spot.Us, besides… I have plenty of challenges. But it is worth a serious effort to explore the territory.

  12. Steve Katz says:

    Mother Jones has struggled with this issue for all of its 32 years and we still don’t have the answer. We’re a non profit, always have been, and in practice, we’ve developed a mix of earned revenue to (more or less) pay the bills. On the earned side it’s primarily sub and newstand revenue from the 230,000 circ print magazine, which essentially pays for manufacturing and distribution) and advertising in print and (increasingly) online. On the donation side it’s contributions large and small. In effect the donations pay for the actual content (and editing).

    Foundations haven’t historically been big MoJo funders (with some important exceptions) – most of the contributed $ is from individuals (over the years, with a pretty aggressive direct mail/phone program, we’ve built a donor file of about 25000 – although the beast needs to be fed constantly).

    We’re looking a lot more closely at different online approaches for giving, pretty much all of them building off of some sort of targeted micropayment approach. No golden answer though.

    All I can say is that like any other NGO (I’ve been doing this stuff since the 70s) to make a go of it you need to mix it up, diversify, get good folks to raise $ with you, bring in your community as partners – all the stuff we already know, but that’s always hard to put into practice.

  13. Ethan et al

    Your comments about building a global translation community are on the short -> medium term drawing board at dotSUB. As our global network of volunteer translators continues to increase, we are in parallel attracting more and more paying work for all types of video content to be translated – corporate, education, entertainment, healthcare, media, news, etc., and we are working on a model to create a nascent industry of ‘born digital’ professional translators.

    The major advantage is that they will not have been trained with the traditional ways of doing things, and therefore will not find the digital world threatening. We have just signed a partnership agreement with SDI Media of LA, the world’s largest subtitling and dubbing company, with offices in 29 countries, who is using dotSUB to expand their previous ‘analog’ reach into the digital world – and they are most excited about recruiting and training new translators who have found a passion about translation – and would want to pursue a career, either part time or full time, in translation.

    This is not citizen journalists as translators, but new translators enabling citizen journalists to repurpose their content across cultures.

    Hope to discuss this further with you in Budapest.

    Michael Smolens

  14. sohbet says:

    Translating and journalism The following is a comment I made to Ethan Zuckerman’s post on Financial models for “difficult” journalism

  15. sohbet says:

    Translating and journalism The following is a comment I made to Ethan Zuckerman’s post on Financial models for difficult journalism

  16. For what is essentially a real-life TookTheBuyout.com (plus Foundation money) in Minneapolis, see MinnPost

  17. Billigflug says:

    Great and sophisticated article as usual. Thanks for this one. We all should recognize that a free and critical journalism is a fundamental thing to allow for a free folk.

  18. saç ekimi says:

    Financial models for “difficult” journalism

  19. Translating and journalism The following is a comment I made to Ethan Zuckerman’s post on Financial models for “difficult” journalism

  20. key says:

    Translating and journalism The following is a comment I made to Ethan Zuckerman’s post on Financial models for “difficult” journalism

  21. toki says:

    Great and sophisticated article as usual. Thanks for this one. We all should recognize that a free and critical journalism is a fundamental thing to allow for a free folk.

  22. Dofollow says:

    I am entirely skeptical of any media operation that depends on advertising. Advertisiers and marketing firms know that it is just as easy for them to make their own media – they don’t need to piggyback on anyone elses. The only exception that I see to this are elite and exclusive communities like TED and Pop!Tech.

  23. Photomania says:

    The major advantage is that they will not have been trained with the traditional ways of doing things, and therefore will not find the digital world threatening. We have just signed a partnership agreement with SDI Media of LA, the world’s largest subtitling and dubbing company, with offices in 29 countries, who is using dotSUB to expand their previous ‘analog’ reach into the digital world – and they are most excited about recruiting and training new translators who have found a passion about translation – and would want to pursue a career, either part time or full time, in translation.

  24. Medyum says:

    Perfect article. i read it and love it..

  25. Travel says:

    i translate it to turkish and write it on my blog. thax to you..

  26. chat says:

    The major advantage is that they will not have been trained with the traditional ways of doing things, and therefore will not find the digital world threatening. We have just signed a partnership agreement with SDI Media of LA, the world’s largest subtitling and dubbing company, with offices in 29 countries, who is using dotSUB to expand their previous ‘analog’ reach into the digital world and they are most excited about recruiting and training new translators who have found a passion about translation and would want to pursue a career, either part time or full time, in translation.

  27. kabin says:

    Translating and journalism The following is a comment I made to Ethan Zuckerman’s post on Financial models for difficult journalism kabin

  28. Kovancilar says:

    i translate it to turkish and write it on my blog. thax to you..

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