In the past two parts of my series, I have examined the organizational structure of a newspaper (the Bucknellian) and the problems facing the industry. In short, the newspaper industry is losing readers to the internet, while its print advertising revenues are decreasing quickly. In order to survive, the newspaper industry is going to have to change.
Interestingly enough, some newspapers (albeit, the small ones) are working to become non-profit organizations. As a non-profit, a newspaper would have some clear advantages. First, a non-profit can receive donations and support from philanthropic organizations that would be tax-deductible, tapping a totally new income stream. This model has been successful for other types of media, especially National Public Radio (NPR) and the Public Broadcasting Service (PBS).
One organization that is currently following the non-profit model is MinnPost. Started by Joel Kramer, MinnPost is a non-profit newspaper that operates an online newspaper that focuses on the Minneapolis area as well as national news. It started up with financial support from donors and foundations and hopes to break even using a mix of memberships, advertising, and sponsorships. According to Kramer, MinnPost should be able to breakeven before 2012. From a content perspective, MinnPost publishes many “short quick hits” types of stories to draw in readers. Even though it still publishes long stories with in depth reporting, the shorter stories have been bringing more traffic to the site. It also allows readers to comment on articles, giving readers a way to feel connected to the news source as well as reason to come back more often. The site is also cutting edge when it comes to Web 2.0 features as the site posts links to other sites in the form of affiliates. Affiliates host a link to MinnPost and Minnpost will return the favor.
To make money, the site does have Google Ad Sense ads on its site as well as traditional ads. MinnPost also has started selling sponsorships for certain sections of its online page, which according to Kramer, bring more exposure to the advertisers. The newspaper (if you can call it that) also sells memberships to satisfied customers. There seems to be little incentive for making a donation, besides a tax exemption and a shout out on their site, but from a quick look at its donor list, MinnPost has received a generous amount of donations. It will be interesting to watch MinnPost in the future to gauge its success.
Similarly to MinnPost, is ProPublica. ProPublica is another non-profit newspaper but only receives its financial backing from large foundations, such as the Sandler foundation. Its main purpose is to do investigative reporting, which is a very costly affair and is one of the first things to get cut from a failing newspaper. Investigative reporting has made a huge impact on the American society and has held people accountable for their actions all over the nation, such as the Watergate scandal. ProPublica is run by some very experienced people including the former managing editor of the Wall Street Journal, the former managing editor of the Oregonian, and the former investigative editor of The New York Times. ProPublica gives its most important stories to traditional news sources for free and then will later post it on their website. ProPublica has broken some large stories including about a story about the medical personnel involvement in interrogations in Iraq. The story then started a congressional review.
Another interesting newspaper company is called Spot.Us. Spot.US is basically the Kiva of the newspaper world. Funded by the Knight Foundation, Spot.US connects journalists with the public, similarly to the way that Kiva connects lenders to people in the developing nations. People can go to Spot.Us and submit tips, or stories that they want to have investigated. A reporter will then accept the story and set a fee. Other people can donate money (tax deductible) to have that story written. The story can be picked up by any other news source for free, but if an organization wants exclusive rights, they have to pay 50% of the donor fee back to Spot.Us. Some of that money goes back to the original donors as credits to fund another story. Right now, Spot.Us is focused on the Bay Area and has plans to launch in other cities in the United States. Here is a video explaining the concept.
As intriguing as Spot.Us is, I do not feel this model will become the archetype of newspapers in the future. I think it can be successful for local areas where people are curious about the issues around them but I do not feel it would be capable of handling large-scale investigative reporting, especially concerning international politics. Of the three organizations that I profiled, I feel that the Minnpost and ProPublica will become the role models in the newspaper industry. Newspapers cannot expect to turn a profit in the future with the current revenue models that they have in place. They cannot produce a good product without substantial capital investment, which the stock market will not provide to a hurting industry. At the same time, the newspaper industry should not receive government bailout money as it could possible interfere with its objectivity. Instead, most modern newspapers, especially those in financial trouble should restructure as a non-profit organization. This would give them the necessary tax breaks and the ability to receive donations from the public. Modern newspapers need to offer a connection between the news and its readers, like Minnpost has been trying to do. They need to accept the internet and embrace it.
Why do we even need newspapers? Vince Stehle of the Chronicle of Philanthropy sums it up pretty well, “Who cares if newspapers do go out of business? We all should. Newspapers are the first draft of history, and they provide a critical check on the abuse of power by political and corporate interests. A healthy democracy and a just society depend upon a free and vigorous press.” Newspapers keep people accountable and society will always need this important service.