Paræ-Techs: Is Non-Profit the Only Hope for Online News?

In our most recent Fresh Tech Friday feature, Steve Guengerich wrote about the newly launched Texas Tribune’s use of Django as its development framework. Hailing the startup political news site as “the poster child for the next generation of investigative news reporting,” Steve rightfully applauds the efforts and early success of the Trib in establishing a quality online news site.

The Tribune is, of course, not alone in seeking to outline a new path for news in an era when publications are floundering, and their online equivalents are still attempting to define themselves in an awkward dance of balancing print and digital paradigms. When the New York Times Company can wax optimistic at losing only $35.6 million in this year’s third quarter, and that primarily by hatcheting its newsroom and assets, clearly we are past the point of innovation as merely a luxury.

What may be most revealing about the Times’ “earnings” report in October, however, is nestled further down in the article: “The largest segment of the company reached a watershed moment, collecting more from readers than from advertisers, in an industry where advertising revenue traditionally outweighed revenue from circulation by at least three to one.” That’s a daftly-worded take on the minor rise in circulation revenue to $175.2 million versus the precipitous drop in ad revenue to $164.5 million.

Those ad revenues are not likely to return in any substantial form.

Which is why one of the most interesting aspects of the new Texas Tribune is not necessarily its online platform, but rather that it is forced to establish itself as a nonprofit startup. The nonprofit status isn’t novel for a news outlet, but it suggests a necessary trend to what was once an anomaly.

The Tribune has already raised $3.6 million in support, primarily from co-founder John Thornton’s $1 million in initial seed money. Another $750,000 has been gained through grants from the Knight Foundation and Houston Endowment, and more coming from benefactors ranging from former Lt. Governor Ben Barnes to T. Boone Pickins.

Other local online news startups like the Austin Post have also emerged out of the gate this year in the not-for-profit arena. [Full Disclosure: I serve on the advisory board of the Austin Post]. Backed by Trilogy Enterprises, the Post presents an almost opposite approach to reporting as the Texas Tribune, but also quickly realized its limited likelihood of survival as a for-profit endeavor.

The two sites together offer an informative juxtaposition of conceptions for online news organizations as that future is being written. The Tribune is staffed by A-List investigative journalism talent, well paid, and with an aggressive, if purportedly non-partisan, editorial direction. The Post, on the other hand, seeks to serve as a community outlet propelled by unpaid contributors and bloggers and with its editorial focus outsourced to the crowd. Likewise, the Trib is currently limited by its scope to primarily political concerns (though it is reported to have larger ambitions), while the Post is currently mired in the unruly sprawl of diverse content and quality.

The trend towards non-profit online journalism, while certainly not yet a proven avenue of success for the future of news, has seemed to touch off a rather absurd debate of the actual editorial viability of the sources. The Tribune states its position with unflinching idealism: “Journalism in the public interest is too vital to a civilized society, to a functioning democracy, to be left to the vagaries of the free market. Philanthropy must and will become a bigger part of the equation.”

Detractors, however, point to several potential flaws with the nonprofit news model (and notably, most of the detractors are entrenched in the interests of for-profit print publications). In response to the announcement of a new non-profit news project in San Francisco, East Bay Express’ Robert Gammon flogged the idea for its “free-labor workforce” of 120 UC-Berkeley journalism students. Likewise, Jack Shafer recently declared on Slate that unlike the need of conventional commercial journalism to attract actual readers, “nonprofit outlets almost always measure their success in terms of influence, not audience, because their customers are the donors who’ve donated cash to influence politics, promote justice, or otherwise build a better world.”

These are skeptics that face both the Tribune and Post as they attempt to establish their role among local news sources. Yet mainstream news outlets have increasingly drifted towards partisan and opinion journalism precisely because they have followed the wants of their audiences. And of course, traditional publications are no less immune to the constant plague of conflicts of interest.

While Shafer may declare that the new non-profits are simply “substituting one flawed business model for another,” we have yet to see the emergence of any kind of viable alternative to either model. Paying for online news content seems inevitable, but that will likely neither provide enough revenue to properly bolster newsrooms nor prevent the trickle down of aggregated news to smaller outlets.

If customer subscriptions/donations and ad sales will only make up part of a news organization’s needed revenue, then perhaps we need to be thinking of other assets that online sources can provide to supplement their journalistic offerings. For example, one of the Texas Tribune’s most valuable features is its impressive set of databases, which as they are expanded and developed to be more precise and cross-referential, could provide an extremely powerful resource for which they could charge. While their intent to keep them open and accessible is noble, well organized data is a hot commodity.

My concern with the non-profit model being established for online news is not the potential conflicts of interests, but rather the variety of publications that such a model can support. The charitable route will work well for a number of outlets, but that number is limited. The future of news online may need to be more than quality of coverage and number of readers to find financial support, but valuable peripherals as well.

As the lesson of the music industry’s turmoil should have served to highlight for publications, the singly-oriented value of the product itself is no longer sustainable on its own, and must instead be supported by a network of related revenue sources. What exactly those will be will be more likely define the future for journalism online rather than who has a beneficent bankroll.

Paræ-Techs: Is Non-Profit the Only Hope for Online News?