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Ideas

The scope of media (3): structuring news outlets for a zero profit era

Clearly, the current market structure of news provision is such that no individual player can hope to stand atop dictating the rules. We have embarked on a path of distributed news production and aggregation. I described earlier how the barriers to entry have been irremediably lowered while the potential reach of a one-man operation has become nothing short of limitless. This is the new hand that news producers – established and incumbent – are dealt for the current "game". From oligopoly, the market has evolved to a pure(r) competition structure. 

 

One potential avenue that is increasingly explored by news organizations is that of reviewing their ownership structure in order to make better use of deflated income and more expensive assets. Turning away from profit-oriented ventures towards foundations (such as The Guardian's Scott Trust) and nonprofits (ProPublica, Watchdog.org, among others), journalists and editors have found new ways to finance quality investigative journalism and guaranteeing their independence further than is generally the case in for-profit endeavours. 

 

In this day and age, nonprofits have moved upwards in both scale and impact. In a 2012 piece in Stanford's Social Innovation Review, authors Peter Kim and Jeffrey Bradach describe the emergence of what they call "a new class of heavyweight nonprofits", most of which "were founded in the latter decades of last century". These organizations boast $50M+ in revenue, and are characterized by their focus on a limited set of donors – oftentimes private philanthropists – yielding specificity and stability in achieving their goals. 

 

In terms of governance, the specificities of nonprofits make them ideal vehicles for the advancement of investigative journalism. Force is to admit that, in the current state of the industry, most of the "surviving" players are factually supported by the deep pockets of billionaire-investors and owners which may or may not use them as vehicles to promote (though undoubtedly subtly, through editorial appointments and commercial policy) specific political and economical viewpoints. 

 

 

In recent months, Amazon's Jeff Bezos bought himself the Washington Post, aiming for nothing short of opening up a new "golden era" for the famed daily paper. He hopes to do so, admittedly, by transposing the recipe that made his online retail behemoth a success into the realm of investigation, commentary and opinion. Similar stories can be told for several news outlets which have changed hands recently, notably the Boston Globe (billionnaire John Henry) or Atlantic City's The Press (Warren Buffet). The trend is so deep that Times Magazine and the New York Times have dedicated lengthy articles to the exploration of this "phenomenon", the NYT describing these outlets as "trophies" for the amusement of the wealthy. 

 

A "finalist", qualified buyer in the days that lead to the acquisition of the Post, Pierre Omidyar decided to go his own way. He is quoted by Professor Jay Rosen on PressThink as expecting to invest 250M$+ – the exact same amount as his online rival – into a new venture to be built in partnership with Glenn Greenwald, the famous Guardian correspondent behind much of the Snowden coverage. "A company, not a charity" writes Rosen about Omidyar's new venture. Despite our admiration for some of these entrepreneurs, the trends allow us to question the motives behind the wave. Fundamental questions of what lies underneath this sudden interest in "saving the press" enacted by what seems to be nothing but a random group of billionaires, remain unexplored, and the typical puritanism that's put forward as justification should not easily be granted at face value. 

 

Counterexamples to this mingling of interests are provided when studying the (fragile) growth of the nonprofit journalism ecosystem. A mid-2013 study led by the Pew Research Center identified 172 U.S.-based nonprofit news organizations, of which only 29% have been in operation for more than 5 years. These recent news organizations are, as defined by the IRS, "meeting an educational need in society". An educational, and some would say, a political need indeed, which comes at the cost of renewed business models that focus on lengthy and in-depth study of contemporary phenomena.

 

In a recent, well-documented piece, The Atlantic reported how the nonprofit news site ProPublica spent $750,000 covering one story, uncovering hidden facts behind acetaminophen, the active ingredient in the well-known over-the-counter drug Tylenol. Though this may seem a disproportionate investment of resources into a single piece of work, the public-good value resulting from the availability of such new information to American (and, in fact, the world's) citizens dwarfs ProPublica's investment manyfold. 

 

The average depth, and thus, social and political contributions of such entities is doubtless essential to the continuation of a semblance of democracy. The Pew study cited above showed that an impressive 77% of the American nonprofit news organizations they studied published zero opinion stories in the period under consideration. In an era when Facebook and blog comments abound, awash in ideological meanderings and the meaningless chatter of opinionated dumbtards, such clarity and focus is not only refreshing, but absolutely necessary to the intellectual well-being of our societies. 

 

Undoubtedly, billionaires will keep lining up their trophies, adding the watchdogs of our political systems to their collections of fancy cars and professional sports teams. Will more news organizations chose to go the nonprofit way? It is difficult to predict, and depends largely on the willingness of key individuals to free the production of investigative knowledge from the shackles of interested instrumentalization of commerce and politics. A challenge, yes. But not unsurmountable. Many cards have not yet been played, and nonprofits hold what may be the best hand at that table. 

 

Images by PCCNYC,  freepress.net and ProPublica.

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