Business Models for Local News: A Field Scan
This post is one section of a new report published by The Shorenstein Center on Media, Politics and Public Policy at the Harvard Kennedy School and The Lenfest Institute for Journalism, “Business Models for Local News: A Field Scan.” On May 18, 2018, Shorenstein and The Lenfest Institute gathered industry leaders discuss prospects for finding and seeding new business models for local journalism — and how best to support those working in communities across the country to facilitate change. The report is based on those conversations. The full report is available here.
It’s well understood that the traditional print advertising business model that once enabled high-quality, local news is under extreme threat. Meanwhile, platforms such as Facebook and Google increasingly dominate how people access information, garnering the majority of the digital advertising revenue that previously flowed to publishers. Most say that local journalism is in crisis. But maybe it’s also at a crossroads.
On May 18, 2018, the Shorenstein Center on Media, Politics and Public Policy at the Harvard Kennedy School and The Lenfest Institute for Journalism gathered industry leaders from news organizations, platforms, and philanthropic sectors to discuss prospects for finding and seeding new business models for local journalism — and how best to support those working in communities across the country to facilitate change. The conversation was energized and, ultimately, optimistic.
The gathering identified five principle needs and opportunities for the revitalization of local news:
- Increased financial investment in startups
- Growing philanthropic commitments
- The need for growth capital for existing organizations
- Improved collaboration among both news organizations and platforms
- Greater emphasis on diversity,equity,and inclusion
Above all, attendees identified opportunities for growing financial investment in local news. This included a range of approaches, most of which already have live case studies in operation: Participants highlighted programs such as the News Revenue Hub, Membership Puzzle Project, and Knight-Lenfest Newsroom Initiative, which are working directly with newsrooms to develop models that create audience-focused journalism and promote reader revenue through individual financial contributions. They also cited Civil, an organization experimenting with blockchain and cryptocurrency to link journalists directly to their patron readers.
Conversations also focused heavily on field-building to grow a larger culture of philanthropy. This, in tandem with reader revenue, will rely on greater consumer messaging and marketing around the merits of journalism as a public service. Attendees reflected on the power of NewsMatch, a national gift-matching campaign that has motivated non-journalistic community foundations to support nonprofit news. To create formidable philanthropic muscle, the news industry must conduct more outreach that educates and informs potential donors — beyond those who regularly fund media — about the civic value of funding news.
While much of the current investment and philanthropic capital is focused on aiding startups, participants agreed that as many local news businesses mature, they’ll need growth capital to help stabilize and mature. Publishers, they said, must assume the responsibility of building viable products and creating opportunities that are attractive to those funders interested in a return on investment. Berkeleyside, an independent news site in Berkeley, California, launched a direct public offering and sold an interest-bearing debt offering in the company to the local community.
Beyond talk of revenue, there was also extensive discussion around the opportunity for stronger cross-industry collaboration both among news outlets and with platforms. Newsrooms must share resources and engage in joint technology development. Local newsrooms need better tech stacks, including content management systems and consumer relationship management platforms that are explicitly designed for journalism and can help develop efficient workflows and funnel casual readers into paying supporters. Participants identified possibilities for creating new education resources, especially within journalism schools, that will help develop the next generation of news entrepreneurs and business leaders within the industry. They referenced existing training programs such as Columbia University’s Sulzberger Executive Leadership Program, and the Poynter and ONA women’s leadership initiatives for working journalists — while also emphasizing the value of communities of practice that can connect people from across the news sector.
In the midst of all this, diversity, equity, and inclusion should be paramount to the conversation, attendees urged, as news organizations must better reflect and engage the communities they seek to serve. This means greater diversity and inclusion at all levels of local journalism: reporting, management, voice, and audience.
This gathering was but the first part of a larger conversation about how news organizations, funders, and other groups can work together to move local journalism forward. And as discussions continue, the Shorenstein Center and The Lenfest Institute will work to ensure that a greater variety of voices have a seat at the table.
This report captures the discussions of the day, which were organized around five areas of problem and opportunity. The following setups framed the roundtable conversations.
1. Diversifying and Strengthening Revenue Streams for Journalism
Growing a sustainable journalism enterprise in the current environment requires seeking out diverse sources of revenue. At the same time, audience attention is a scarce resource and chasing too many revenue opportunities at once can be a waste of investment. How should publishers be thinking about diversifying and strengthening revenue streams? What particularly promising experiments and practices are in operation currently, and what are the open questions?
2. Field-Building to Grow a Culture of Philanthropy
Journalism as an information good has always required subsidies in addition to direct payments to be produced at the scale required by a functioning democracy. But in the current environment, both advertising and government resources are drying up as sources of production subsidy. What would it take to build an ongoing source of philanthropic support? How can news organizations and other interested parties help build a culture of philanthropy to support journalism and the production of news?
3. Finding and Seeding Startup Capital for Mission-Driven Journalism Enterprises
While many local news startups are philanthropically funded, the sector as a whole holds great market promise — as exciting new models are being tested that combine elements of nonprofit and for-profit approaches. How should media entrepreneurs who care about journalism think about pursuing market opportunities and finding funding? How can we increase the overall availability and access to seed capital and growth capital for promising journalism and news media ventures? What are the roadblocks and what are the opportunities?
4. Talent-Building at the Enterprise Level — Growing the Next Generation of Publishers in Business Acumen and Leadership
Many journalists in small and growing newsrooms don’t have the business and technical skills necessary to become publishers who can nurture their organizations into revenue sustainability. How can we help grow the next generation of publishers? Where are those people likely to come from within the news ecosystem? What kinds of support and training do they need? What entities are best poised to support them?
5. Building Products to Increase Revenue and Engagement
In the shift from ad-driven to reader-supported revenue streams, journalism must be something people are willing to pay for and support. What might be the features of its products — both in terms of content and user experience? What kinds of product development do niche and local sites need to experiment with? What different storytelling formats might be required? How can we push the boundaries of news reading beyond the traditional front-page or news feed algorithm model? And where does it make sense for these kinds of product development cycles to happen?
Organization of the day
Participants were asked to present current experiments or initiatives with which they were involved relative to the problem area; to think about which areas of collaboration might be seeded between existing initiatives; and to volunteer ideas around what experiments or initiatives don’t exist yet but should.
Attendees circulated through each discussion once, offering them an opportunity to meet a new mix of fellow participants in each round. At the end of the day, the entire group was asked to discuss who else should be included in these kinds of conversations, and to reiterate the most promising ideas to arise from the day’s roundtables.
This post is the executive summary of the complete “Business Models for Local News: A Field Scan” report. You can find the full report here.