Tuesday, 18 November 2008

Public-to-Private, socially minded rich New Yorkers and Crowdfunding as a possible way out for the New York Times.

Regular followers of this blog will have noted that I've been blogging a lot on the idea of the NYT taking the company private/charitable status with the help of a group of very wealthy, socially minded rich New Yorkers.

I'm indebted to a Think! reader, Simon Garner at PBS, for tipping me off to another variable in this equation which is crowdfunding.

Two projects are cited: spot.us and Representative Journalism.

Now my crowd idea was just a smaller one, involving some very rich people, rather than lots of micropayments, which is essentially what a subscription or kiosk purchase is, and that sure ain't working.

However Leonard Witt's idea over at Representative Journalism is closer to my thinking. He's talking about 1000 people (at a local level) making donations of $100 a year to cover a particular issue.

Well, roll that thought out to where I am and you come to say 100 people in the U.S.A. making a one off donation of $10 million dollars. That would pay off $1 billion of the NYT's debt of $1.2 billion, the company goes private/charitable status, and a lot of your problems are over.

Here below, is the piece written by Mark Glaser, a colleague of Simon's at PBS, about exploring crowdfunding for economic sustainability in journalism.

Below the piece, but check the link to see the comments of readers on how this idea was received. There are nice ideas in this piece, but as re. the NYT Company and in the real world I prefer mine. (If it comes off I want a seat on the charitable board btw. Seriously.)

Can Crowdfunding Help Save the Journalism Business?

Mark Glaser, November 13, 2008
Bands do it. Filmmakers do it. President-elect Barack Obama made an artform out of it. "It" is crowdfunding, getting micro-donations through the Internet to help fund a venture. The question is whether crowdfunding can work on a larger scale to help fund traditional journalism, which is being hit by the twin storms of readership and ad declines at newspapers and the economic recession.
Two experiments in crowdfunding, Spot.us and Representative Journalism, are testing the concept at the local level. Spot.us allows freelance journalists to pitch story ideas and get funding from the public in the San Franciso Bay Area, while Representative Journalism (or RepJ) is running a test in Northfield, Minn., funding one full-time journalist to cover that community.
[Full Disclosure: I am on the advisory board to RepJ and, like Spot.us, have also received a grant from the Knight Foundation.]

Spot.us is the brainchild of journalist David Cohn (a.k.a.
Digidave), who worked on NYU professor Jay Rosen's groundbreaking NewAssignment.net citizen journalism project and helped research the chapter on crowdfunding in Jeff Howe's Crowdsourcing book. Cohn won a $340,000 grant from the Knight Foundation for Spot.us, and writes about the project on MediaShift Idea Lab, the sister blog to MediaShift where Knight grantees write about their projects. Here's how Spot.us works:
1. Anyone can come up with a "Tip" or story idea they'd like to see covered. People can "pledge" money toward that story.
2. Freelance journalists can sign up to cover those story ideas or pitch their own stories, attaching a cost to writing the story.
3. Once a story has a journalist attached to it, people can donate money to help fund it (but no one can give more than 20% of the total cost of the story).
4. When the story has full funding, the journalist writes the story, and a fact-checker is paid 10% of the funding to edit and check it.
5. Before the story is posted, news organizations have a chance to get exclusive rights to the story by paying the full cost, which is given back to the donors. Otherwise, the story is posted online and any news organization can run the story for free.
The site officially launched last Monday, but had already funded three stories through a simple wiki set up beforehand. Cohn told me that the challenge for Spot.us isn't so much the technology as it is the fundraising, something that is new to him as a journalist. He said that Spot.us is just one possible alternative business model for journalism.
"I never try to sell Spot.us as a silver bullet that will support a whole news organization," Cohn said. "But I do see it helping a news organization so they can do something beyond their regular means. They can strive for excellence, but it won't support day-to-day reporting. It has its limitations...Community-funded journalism relies on two basic shifts. First, the audience has to think of journalism as a public good like art that's worth sustaining with their own money. The second shift is with reporters who have to realize they are a personal brand and they can pitch the public."

Unlike Spot.us and its piecemeal approach to crowdfunding per story, RepJ takes a longer term outlook by hiring a full-time journalist to work for a local community or cover a specific issue. Leonard Witt, communication chair at Kennesaw State University in Georgia, came up with the idea for representative journalism and
got a $51,000 grant from the Harnisch Family Foundation for the trial project in Minnesota. Witt believes that a community or interest group could raise $100 donations (or $2 per week) from 1,000 people to support a journalist who covers their locale or issue for a year.
Witt has yet to test this donation model; he's first trying to get his initial representative journalist, Bonnie Obremski, more ingrained in the community in Northfield, Minn.
"We are dealing with a total Northfield population of just 17,000," Witt told me via email. "We have to literally weave together an information community of members willing to pay for high quality journalism. So we have to work on three fronts: 1) we have to provide high quality journalism; 2) we have to get the community to know our journalist; and 3) the community has to feel that their membership in the community and the news and information it produces has value worthy of their financial support."
Crowdfunding Bloggers
MoveOn.org pioneered getting small donations to pay for political advocacy campaigns, and Barack Obama raised small donations from millions of people in the '08 campaign. And independent bloggers and online journalists have for years been asking their audience to help support their work through small donations. Political bloggers such as
Josh Marshall and Andrew Sullivan, and tech blogger Jason Kottke have raised thousands of dollars from online fundraisers in the past. And freelance reporter/blogger Chris Allbritton financed a trip to cover the Iraq War in 2003 by raising nearly $15,000 from his readers, and wrote dispatches on his Back to Iraq blog.
Allbritton was able to finance a drastic change of beats, going from being a media and technology reporter to becoming a foreign correspondent covering war zones in the Middle East. By supporting his trip to Iraq, Allbritton's readers helped him gain steady work as a freelance correspondent to Time magazine, the San Francisco Chronicle and New York Daily News. Now, he is a
Knight fellow at Stanford University on a year-long quest to see if the reader-supported model can work at an institutional level.
When I contacted Allbritton for this story, he was amused at the term "crowdfunding" and noted that its advocates might not realize how expensive foreign reporting really is -- especially in a war zone. Even with nearly $15,000 for his Iraq stint, Allbritton quickly went through the funds in just one month because of the high cost of being a foreign correspondent in Iraq. "There was no guarantee that more moneys would be forthcoming from an already tapped audience," he said. "Trust me: You don't want to suddenly find yourself broke in Iraq."
Even so, Allbritton was amazed that he could go cover a war at the behest of his audience, without approval from any editor or news organization.
"I didn't have to ask anyone's permission or check with anyone," he said. "I was relying on my own judgment. It was an amazing sense of freedom to do stories and explore things that I thought were really interesting. That said, it also carried a great sense of responsibility. I mean, when you're at a newspaper or magazine, you have an editor or two to answer to. Now, I had thousands of people watching me and I didn't want to let the donors down. I took that very seriously."
On a less serious subject -- satirical political blogging -- Ana Marie Cox was on the campaign trail covering John McCain for Radar Online when the magazine went belly up. She posted a
Rate Card on her personal blog, asking her readers to support her coverage for the last week and a half of the campaign. For $10, you would get a personal thank-you email, and for $250, Cox would pose your question to a McCain advisor.
Cox was surprised that she raised more than $7,000 from her fans in just a few days.
"Words cannot properly convey my gratitude and amazement in the faith you people seem to have in a little Midwestern girl and her fondness for foul language, politics, and hard-luck stories -- not in that order," she wrote
on her personal blog.
Still, Cox was quick to note that "due to the astronomical costs of traveling with a campaign, I am pretty sure that amount will run short of covering the trail through election day."
Not long after the pledge drive happened, Cox was picked up by the Washington Independent to continue providing reports from the McCain campaign.
Another blogger that recently started a crowdfunding drive is Jim Hopkins, a former USA Today reporter who writes the
Gannett Blog as a watchdog to the newspaper chain and media conglomerate. For the past month Hopkins has been asking for $5 subscriptions from readers via PayPal, and raised nearly $1,500. But he had one particularly vexing problem: Most of his readers want to remain anonymous because they work for Gannett, so using PayPal would reveal who they are to him. To get around that problem, Hopkins set up a post office box to accept cash from them in the mail.
Hopkins told me he is trying to make money from Google AdSense ads, and is using online video to strengthen his appeal for funds.
"I had read that video is a good way to make an appeal because it's more emotional," he told me. "Until recently, my readers had not heard my voice or had a sense of who I was as a person. Just last week I figured out a cheap way to produce video, and people's reactions have been interesting. They said I might have come across as a mean, anti-management person, but the video made me seem more like a real human being. So if I used it as a fundraising tool it could result in more money coming in."
Hopkins is interested in using Spot.us to fund other story ideas, but he is worried that if he puts his pitches online, they could be scooped up by competitors.
"I have to think about ways to present my ideas without having them taken by someone else," he said. "That's an issue that
Profnet has wrestled with for years; [it's a site] where a journalist presents a story to [potential] sources, but they have figured out a way around it."
Supporting Crowdfunding Operations
While an independent blogger or journalist might raise funds from readers directly, it's not something that comes naturally to most writers, who might have a gift for words but not business. That's where the "hub" idea makes more sense, and a platform such as Spot.us -- properly marketed -- could help connect writers with potential funders, and handle financial transactions. That hub model has worked at
Kiva.org for funding entrepreneurs in the developing world; at DonorsChoose.org for matching charities to donors; as well as entertainment sites such as Sellaband for funding bands directly and IndieGoGo for funding films.

IndieGoGo launched at Sundance last January, and has raised more than $70,000, with more than 800 film projects posted on the site. Filmmakers pitch the public, and they can then micro-finance projects. IndieGoGo takes a 9% cut of all donations, and donors do not share in the proceeds from the film, instead getting quirky "VIP perks" such as film credits or trips to the set. IndieGoGo co-founder and head of marketing and strategy Slava Rubin told me one filmmaker who made a documentary about Iraq gave donors strips of a Persian rug that came from one of Saddam Hussein's palaces.
Rubin thinks the crowdfunding model could work in journalism as long as the journalists can engage the right audience.
"If someone writes [a story about] corn in our energy supply, and they try to get money from people in Iowa, that could work," he said. "You need to be able to engage your audience. You have to be closely connected to your niche, and take advantage of the tools out there to engage that audience. There's Sellaband for music, and there are others, but you have to make a connection with the audience."
Cohn told me Spot.us would try to become sustainable by asking for donations to support the overall operation at the point of sale for story donations. He said that's been a successful strategy for Kiva.org, whose president told him that 79% of people giving money to entrepreneurs will give an extra 10% to cover the costs of Kiva.org's operation. Cohn also would like to get money from advertisers in new ways.
"[Someone like] Macy's could have a survey on our site, and Spot.us users can fill out a survey for them, and in return, they would get credit," he said. "So instead of Macy's giving money to a pitch, they would give it to users, and the users would decide where the money would go. I don't know if it's advertising, but it's a win-win -- the user gets real money to donate, the company gets a survey filled out. But that's in the future."

Wired contributing editor and "Crowdsourcing" author Jeff Howe told me that he was bullish on the crowdfunding model, because it takes much less effort to get someone to throw in a few bucks online than to do the free work of crowdsourcing. Howe thinks Spot.us has promise because of the low cost involved for freelance journalists.
"You just have to pay someone to write the piece, and as you and I know, a couple grand in our pocket will fund a week or more of reporting for us, and that's what the Spot.us model is," Howe said. "I'm really optimistic and hopeful for this as a model for journalism. We're in such disarray right now, where the music industry was in '02 or '03, because of changing mediums and a fickle audience."
One worry he did have was that journalism funders would expect a particular outcome from the story pitch -- and would get upset if the result didn't fit in their assumed world view.
"What you get with a newspaper is a convention to find the facts and write the story," Howe said. "I'm not sure how that convention changes with crowdfunding. I expect that the writers will come back with stories that the funders wanted to see. There's going to be an imperative -- unconciously or not -- to please the funders. And what we know of online communities is that they tend to gather around shared viewpoints and interests. Crowdfunding will work by tapping those communities and they are not disinterested, they will have an axe to grind. People who want you to investigate the local utility will already believe that the local utility is guilty of malfeasance."
What do you think about crowdfunding efforts by Spot.us and RepJ? Do you think micro-donations can support local freelance stories or a long-term journalist covering a particular community or issue? What potential conflicts do you see with these operations and how much could they help bridge the gap in the changing business model for traditional journalism? Share your thoughts in the comments below.



"Books about cosmopolitan urbanites discovering the joys of country life are two a penny, but this one is worth a second glance. Walthew's vivid description of the moral stress induced by his job as a high-flying executive with the International Herald Tribune newspaper is worth the cover price alone…. Highly recommended."
The Oxford Times

Ian Walthew

'I read
A Place in My Country with absolute unalloyed delight. A glorious book.'
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‘Ian Walthew was a newspaper executive with a career that took him round the world, who one day did a mad thing. He saw a for-sale sign on a cottage in the Cotswolds, bought it, resigned and moved in. For the first few weeks he just lay on the grass in a daze. Then he started talking to his neighbours and digging into the rich history of this beautiful part of England. Out of his inquiries grew this affecting and inspiring memoir.What sets it apart from others of its ilk is the author’s enviable immunity to cliché and his determination to love his homeland better than he used to.
His elegiac account of relearning how to be an Englishman should be required reading for anyone who claims to know or love this country. Financial Times


Ian Walthew

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