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Monday, April 4, 2022

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New business models for journalism: profit, nonprofits, and hedge funds

One of the reasons used to explain the crises in the journalism market is profit – or lack of it. We have to agree that it’s hard to compete with giant tech as Facebook and Google when it comes to advertising, which has been the main revenue resource for media outlets for years. 

Credit: Pixabay

However, if everything has been consistently changing due to technology, the key to survival is to change and rethink the business models to find an applicable alternative to make a profit meeting communities’ needs instead of laying off journalists and shutting down newsrooms. It's known that when local newspapers disappear, the society responds with less civic engagement, more polarization, misinformation, corruption, and dysfunction. 

As Steven Waldman and Charles Sennott say in their article on Report for America, “we need a radical shift in our thinking about local media models, including a different attitude toward the role nonprofits play in journalism.” Non-profits are as innovative as commercial outlets, with the addition of quality content rather than sensationalism and quantity of views. 

Nonprofit news is often more representative, responsive, and more closely tied to local communities. Since they don’t pay taxes on their income, their activities must serve the public and not the interests of owners, shareholders, or politicians. 

I was pleased to find that many non-profits are creating and investing in new business models and that they are doing well despite all difficulties. The co-op, in particular, seems to be an outstanding option for me. The idea of having readers as part-owners and having them participate in editorial and business decisions is very interesting. It’s a way of compelling the audience and making them feel an active part of the whole news process. 

Another engaging model has been used by Chicago’s City Bureau on the project called “The Documenters”. It trains people to collect information from their communities and neighborhoods. They can participate in government meetings, and enhance their knowledge, relationships, and capacity to create a new information resources. 

Engaging the audience is also important to have them advocating for the local news cause. One instance is what happened in New Jersey. With a push from Free Press and the public, the State created the Civic Information Consortium, which will give grants to collaborative projects that improve access to information, storytelling, and newsgathering. 

In the article “Nonprofit journalism finally builds scale” published by NiemanLab, Jim Friedlich says that in 2022 several nonprofit news organizations are accelerating their growth. He mentions that The Texas Tribune has continued to grow and inspire other organizations, and Spotlight PA now distributes its content to over 75 newsrooms in Pennsylvania reaching over 35 million visitors monthly. 

Other enterprises plan to launch with corporate resources and commercial models rarely seen in nonprofit news. Such as The Baltimore Banner, which will be launched with an annual budget of $15 million and will sell subscriptions to support its operation, and Chicago Public Media, which will be completely acquired by the Chicago Sun-Times. 

To sum up, I agree with Friedlich when he says that nonprofit news has created meaningful new reporting capacity for journalism, but its long-term success and impact depend upon it becoming a much larger and smarter business. “Enlightened new capital, business acumen, and a capacity to build at scale are required to truly rebuild — indeed, reinvent — American local news.”

*This article was submitted as a memo assignment for the course "Current Issues of Journalism" at the University of Illinois.

About Manu Ferreira

Hi, my name is Manu Ferreira. I am multimedia producer. I hold a bachelor's degree in Social Communication - Radio, TV, and Internet, and a Master's degree in Journalism. Here, I want to share my ideas and some of the work I've done in my career.


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