Saturday, November 22, 2008

Will Journalism Shift to a Non-Profit Funding Model?

As America’s newspapers shrink and shed staff, and broadcast news outlets sink in the ratings, a new kind of Web-based news operation has arisen in several cities, forcing the papers to follow the stories they uncover.

Here it is, offering a brand of serious, original reporting by professional journalists — the province of the traditional media, but at a much lower cost of doing business. Since it began in 2005, similar operations have cropped up in New Haven, the Twin Cities, Seattle, St. Louis and Chicago. More are on the way.

Publishing online means operating at half the cost of a comparable printed paper, but online advertising is not robust enough to sustain a newsroom.

And so financially, VoiceofSan Diego and its peers mimic public broadcasting, not newspapers. They are nonprofit corporations supported by foundations, wealthy donors, audience contributions and a little advertising.

The biggest of the new nonprofit news sites, MinnPost in the Twin Cities and the St. Louis Beacon, can top 200,000 visitors in a month, but even that is a fraction of the Internet readership for the local newspapers.
I looked at 8 funding models to support digital goods creation and under the definitions I use there, the newspaper industry has used a model of advertising along with attaching their digital good to a physical product (the newspaper) and then selling it either as a stand alone item or as a subscription to fund their journalism. Now newspaper readership is shrinking and the classified ads that provided much of their revenue are shifting to the internet, making these funding models unable to support as many journalists, but it is not clear what model to support journalism will replace it. Four possible new models are: donations, government funding, unlimited use subscription, and volunteering.

This article describes a non-profit model where funding comes from donations of wealth individuals and audience viewers. Instead of paying $15 a month to have a newspaper delivered to your door, now you donate it to your favorite news organization.

The government could also help to fund journalism such as they do with PBS. While I would not want government to be the sole provider of funds, they could help out with a part of funding.

Another option is to take the subscription model of newspapers to the internet, possible charging $15 a month to access all newspapers and then dividing the revenue based on page hits. But, the subscription model has not worked very well so far with only the Wall Street Journal able to make it work.

Amateur reporting, such as bloggers who are motivated simply by the status of having others read their work, could also increase to provide a larger portion of journalism.

It is not clear which funding model for journalism will dominate in the future, but it will be interesting to see how it evolves. I am also curious to see what happens to the number of full time journalists and the total number of quality journalistic articles written.

via NY Times

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