Nonprofit Journalism turns towards the subscription model

Nonprofit Journalism turns towards the subscription model

 

Alfred Hermida and Mary Lynn Young

British Columbia, January 14, 2020

With all the stresses and strains on commercial models of news, the idea of nonprofit journalism is increasing being seen as an attractive option.

Journalism is an expensive business.

That was not an issue in the 20th century, when newspapers could count on profit margins of 20 to 40 percent. But once shareholders get used to such returns, it is hard to accept margins in the single digits.

Enter nonprofit journalism as a business model for funding activities that are public goods but may not be commercially viable.

According to the Institute for Nonprofit Journalism, nonprofit newsrooms have been launching at a pace of more than one a month in the US for almost 12 years.”

It now counts 212 news organization among its members.

And just last year, there were two books published on the topic: Magda Konieczna’s Journalism Without Profit (Oxford) and Bill Birnbauer’s The Rise of Nonprofit Investigative Journalism in the United States (Routledge).

Accelerated shift

An accelerated shift towards nonprofit journalism appears to be under way in the US, as noted by another prediction contributor and by regular articles on this site.

And it seems to be catching on north of the border in Canada.

One of the most prominent examples of this trend is The Tyee.

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The independent online news magazine based in British Columbia is aiming to become a nonprofit funded by readers after more than 16 years as a for-profit business.

The shift away from commercial structures is relevant for a profession driven by a sense of serving the public good rather than striking it rich.

But shifting from for-to-nonprofit is not in itself a business model.

Different corporate structure

It is a different corporate structure. Being a nonprofit does not change the need to make money to pay for the people, time, and resources needed to produce journalism.

It also does not change the economics of journalism or its value as an economic good.

While the work of journalists has value to society, anyone can enjoy these benefits without having to pay for it, being interested in it, or even being aware of it.

A major investigation by a nonprofit newsroom that leads to a positive policy change is good for everyone. But not everyone will be following the story closely or even be interested in it.

Hence the economic crux for nonprofits seeking to pursue public interest journalism.

Subsidised business

As media economics scholar Robert Picard has noted, the practice of journalism has been subsidised for centuries, from patronage to reader subscriptions to advertising.

Today, nonprofits have sought the patronage of wealthy individuals and philanthropic foundations or are asking readers to become subscribers, members, or patrons.

There is an increasing trend among journalism organisations to turn to their readers for financial support. Making the case for enough people in a community to provide enough funding to keep going for years and years is challenging and necessary.

It may be one way to start to repair the loss of trust in and public engagement with journalism in North America.

Alfred Hermida and Mary Lynn Young are both associate professors at the School of Journalism at the University of British Columbia. The above article, appeared in the Harvard Gazette.

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