What’s Working and Where Do We Go From Here?
To survive in the 21st century, both local and national news publishers are scrambling to correct an overreliance on advertising by diversifying their revenue streams. This strategy includes increasing digital subscriptions, experimenting with new salable products and services such as podcasts and video, and cultivating new revenue sources, including philanthropic donations or memberships from organizations and people who believe in the mission of journalism. To do this, news publishers must keep pace with rapid changes in technology that define the “attention economy.” These efforts are further complicated by the fact that local media’s fiercest competitors in digital ad space, Facebook and Google, also hold great power over content discovery and distribution as well as audience engagement online. A host of other media — including Netflix, YouTube, gaming platforms, and more — are also competing for every American’s time and attention.
It is still unclear whether national networks will manage to find economies of scale and a sustainable business model for commercial news outlets. But the opportunity is ripe for local communities to test new models and develop new revenue streams for sustaining high-quality local journalism that meets critical public information needs.
“Blame Google and Facebook, blame tariffs and newsprint costs, blame Amazon and Uber for hiring away would-be early-morning newspaper deliverers — it makes little difference. We are on the brink of seeing major cutbacks in daily delivery and daily printing of newspapers, as soon as 2020,” according to media business industry analyst Ken Doctor of Newsonomics. “It’s possible, certainly, that a new, more truly hybrid print/digital brand can create new meaning and value. But that will take reinvestment in more and smarter news coverage and in mobile products that deliver it all well.”
It is still unclear whether national networks will manage to find economies of scale and a sustainable business model for commercial news outlets. But the opportunity is ripe for local communities to test new models and develop new revenue streams for sustaining high-quality local journalism that meets critical public information needs.
Many are turning their attention to community-supported local news that builds trust through membership and reader loyalty. The Membership Puzzle Project (MPP) has cataloged and reported on the benefits of news outlets of all business models adopting a membership mindset by establishing ongoing feedback loops with local communities in order to build trust, investment, and sustainability. A 2019 MPP study of international newsrooms found that adopting a wide range of proven practices — including involving readers in news gathering, fact-checking, or flagging disinformation — could result in increased trust and engagement among members and increased revenue for outlets.
The American Journalism Project (AJP) has coined the term “civic news organization” to describe “a local news organization that has a public service mission and a commitment to meeting the critical information needs of the community — in areas such as government, environment, education, social and criminal justice, or public health. It is supported by a mix of commercial media tactics and sophisticated charitable fundraising.” AJP is raising a $50 million “venture philanthropy fund” to support a portfolio of 25 to 35 civic news organizations across the U.S. that can serve as models for a new generation of “ecosystem leaders, high-potential newsrooms, and promising startups.”
Meanwhile, the number of nonpartisan, nonprofit U.S. news outlets has grown from 27 in 2009 to more than 230 members of the Institute for Nonprofit News (INN) today. In 2018, nonprofit news outlets employed
3,000 people (two-thirds of them journalists) and brought in $450 million in annual revenue, up $100 million from the previous year. Individuals and families are stepping up as well, now contributing nearly 40% of all revenue going to news nonprofits. Nonprofit news sources’ reliance on foundation funding is likewise decreasing, falling below 50% of revenue for the first time in 2018.
Among these, two exemplars are often held up as successful, sustainable models by both AJP and INN. One is the Texas Tribune, a statewide, online-only source of political and public-interest journalism that earns revenue from corporate sponsors, individual donors, statewide community forums, and splashy political conferences. Another is Chalkbeat, a national network of K-12 education bureaus founded in Colorado that now covers seven locations, supported with revenue from national and local foundations, individuals, corporate sponsors, and a smaller number of local events. Based on a decade of experience from both outlets, AJP’s vision for a sustainable nonprofit business model for the future is generally to raise 30% to 40% of annual revenue from each of three sources: audience (individual members and event attendance), philanthropy foundations and major donors), and corporations (event and product sponsorships).
The philanthropic sector can and should play a bigger role in local civic journalism. While U.S. foundations poured $2.1 billion into arts and culture in 2012, investigative reporting got just $36.1 million. There is much room for Colorado foundations to grow, in this sense; local and state nonprofit news organizations received only about 5% of a total $1.8 billion in foundation grantmaking in journalism between 2010 and 2015, according to a recent Harvard University analysis of U.S. journalism grantmaking. The lion’s share of journalism philanthropy is still concentrated at the national level and goes to a small number of news outlets and universities.
Public support can add another slice to the revenue pie for Colorado’s local news outlets — especially when targeted to spur business innovation or address the information needs of rural or underserved communities.
Colorado Media Project leaders believe that public funding can add another slice to the revenue pie for local journalism and help inject innovation into the industry. Public support can also help ensure that public service journalism exists and expands in communities without the individual philanthropic member or subscriber base required for other models. We see a collaborative ecosystem emerging in Colorado that we believe can provide a new model for a “value network” of local civic news organizations working in the public interest.
In Colorado, we already see public media outlets stepping up to fill the void in local news production by taking on more significant backbone roles for the entire journalism ecosystem. Currently, Colorado Public Radio (CPR) employs the only reporter covering the Colorado delegation in the U.S. Congress and is the only Colorado newsroom with significant growth plans, aiming to employ a force of 70 reporters by the end of 2020. CPR recently acquired Denverite, a digital-only news source covering city politics, community issues, and culture. CPR is also expanding its partnerships with community- owned radio stations, pursuing collaborations in ways that nurture local talent. Meanwhile, KUNC in Northern Colorado and KRCC in Colorado Springs have teamed up with four other Western radio stations to form the Mountain West Journalism Collaborative to expand and coordinate coverage of land, water, agriculture, and growth in the expanding West, including the rural-urban divide. Rocky Mountain Community Radio Coalition is a long-running collaboration among 18 community radio stations that pool funds to underwrite a KUNC reporter at the state Capitol who covers local issues and elected officials on members’ behalf.
Rocky Mountain PBS is building a new facility in downtown Denver that includes a collaborative newsroom, known as COLab, on its third floor. In spring 2020, at least 10 media entities — the Associated Press, Chalkbeat Colorado, the Colorado Freedom of Information Coalition, the Colorado Independent, the Colorado Sun, the Colorado Media Project, the Colorado Press Association (representing nearly 150 print newsrooms statewide, and two online-only outlets), KGNU Community Radio, RMPM’s investigative news team, and Open Media Foundation — plan to participate in the COLab and are already developing new ways to work together to benefit Colorado communities. COLab partners, all mission-driven nonprofit organizations and public benefit businesses, are committed to working with existing newsrooms throughout Colorado to better serve communities beyond the Front Range.
The Colorado Sun also has emerged as a promising model for statewide news coverage. The digital-only newsroom launched in September 2018, when
10 Denver Post reporters and editors left the newspaper following a deep round of layoffs that had inspired the paper’s editorial board to mutiny the previous spring. After just a year of publication, the Sun has published more than 1,600 news articles, including more than 450 from locations outside the Front Range. It has earned financial support from nearly 6,000 paying members — which currently provides 40% of the outlet’s revenue — sends daily newsletter updates to nearly 40,000 subscribers, and has racked up more than 6.2 million page views from 2.7 million unique visitors. A research team from the University of Colorado Boulder’s Media Enterprise Design Lab recently evaluated the Sun’s impact as a public benefit corporation and concluded: “The Sun’s achievement of its stated benefit purpose was remarkable… Public Benefit Corporation status is an emerging strategy for better reflecting the dual role of journalism as a public service and a business. It may help to protect local news from the profit-seeking, outside interests that have dominated newsrooms in Colorado and throughout the country.”
A growing number of nonprofit newsrooms operate in Colorado, from High Country News, a nationally distributed print and digital magazine that celebrates its 50th year of operation in 2020, to Aspen Journalism, which specializes in in-depth coverage of water and environmental issues, to the all-volunteer Longmont Observer, which live webcasts city council meetings, hosts community forums to vet local candidates and supports local residents producing their own podcasts. A 2018 Colorado Media Project study of the state’s nonprofit digital-native news outlets found that this emerging field would benefit from more start-up support, more focus on revenue generation and diversification of partnerships to increase reach, and more attention to recruitment and retention of journalists of color. The study concluded that the sector is a bright spot but severely under-resourced, an area ripe for local investment and talent development of local entrepreneurs, especially beyond the Denver metro area.
What is the unique value proposition emerging in Colorado? Mission-driven newsrooms operating as a network in collaboration with commercial media may provide a new model to sustain a diverse array of voices, communities, geographical areas, and coverage topics in local media. However, a significant shift in thinking among local residents, local philanthropists, local officials, and local newsrooms themselves is required to reach a future where
community interests are driving the metamorphosis. The industry is still very much in transition, and stimulation, innovation, and reinvention will take
investment from the public, private, and philanthropic sectors. New models and pathways are emerging for public support of local journalism:
- In July 2018 New Jersey passed a Civic Information Bill creating a state-level fund to seed innovation and transformation of local news, overseen by an appointed 15-member Civic Info Consortium board of academics and journalists. In 2019, the state legislature allocated up to $2 million to seed the fund, with bipartisan support.
- In 2019 Canada passed a $595 million, 5-year package to support commercial and noncommercial journalism through tax incentives.
- Civic leaders and citizens in Longmont are exploring whether the state’s Library District framework can be used to support nonpartisan local news, while libraries nationwide are already taking on new roles to support strong, informed communities.
- In the U.S. Congress, lawmakers have introduced legislation aimed at making it easier for media outlets to gain nonprofit status and to work
together to negotiate financial deals with businesses that have gobbled up local advertising revenue.
An October 2019 report from the Australian Competition and Consumer Commission (ACCC) examined nine countries — the United Kingdom, United States, Canada, France, Germany, Norway, Denmark, Sweden, and Finland — and concluded that while there is no single “right way” to provide government support for journalism, a variety of “useful schemes… can deliver effective outcomes, value for money, accountability and independence from government.” Quoting the report, a common “tool kit” of measures has emerged, which includes:
- “Indirect support: For example, a range of tax reliefs and exemptions that reduce costs to news providers and/or encourage higher consumption of news products and services.
- Direct support: For example, direct grants that support various types of news production, marketing, and distribution or long-established public funding of public service media, such as the BBC.
- Encouraging philanthropic support: For example, government support for private donations to support news provision.”
The ACCC report also concluded that “while some have expressed concern that public funding of this sort might compromise the independence of the press, measures have been designed in various countries to address this risk, including:
- clearly specified objectives for funding each scheme;
- use of independent bodies to oversee the scheme(s) — for example, with an independent board or panel of journalists, as exists in
Sweden and as proposed in Canada; - transparent and clear criteria for determining eligibility for funding and for allocation of funds;
- periodic reviews of funding and evaluation of its impact.”
Applying lessons from these models to Colorado’s state and local media landscape is uncharted territory. But as scores of local news outlets fade and state and local civic leaders face growing news deserts, public and philanthropic funding are becoming bigger slices of the revenue pie for independent local news and information. To prevent the spread of news deserts and misinformation in Colorado, the state’s residents are going to need to consider new ways to support local journalism that leads to civic engagement and strengthens our democracy.
