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Granville Williams – the future of the media

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To sustain journalism for the rest of the 21st century, governments must fund journalism, as they have funded the car industry or banks

  • Media companies are returning to profit – but this will not lead to a return of well-resourced journalism
  • Paywalls are unproven and online advertising does not supply the resources to fund good journalism
  • Journalism will be compromised if journalists have to spend too long thinking about sources of funding

There are two divergent perspectives on today’s media. One is apocalyptic – it is that of Robin Sloane and Matt Thompson in Epic 2015 (epic.makingithappen.co.uk). They predict that in three or four years, The New York Times will be a newsletter aimed only at elite readers.  It is the future predicted by Bob Garfield, who argues that we are seeing the collapse of the media infrastructure that we have known for the past 400 years; and by Clare Enders, who predicts that 650 local newspapers will close in the next five years.

The same view can be found in Michael Grade’s evidence to the Culture Media and Sport subcommittee, which he told ‘viewers would gain if ITV dropped all regional news’.

The opposing view was expressed in the last edition of the USA title Editor and Publisher. It said: “The newspaper business is rebounding from the depths of this worst-in-memory recession and big city papers are poised for a strong performance this year.”

That view is supported by figures showing the profit margins in the regional press groups – Trinity Mirror 11.1% in the last 12 months;  and, Johnston Press, debt-ridden, slashing jobs and job-cutting though it is, made profits of 17.5%.  By way of comparison look at Tesco – where the profit margin last year was just 5.1%.  Regional media companies are still healthy. ITV pleads poverty, but its portfolio of channels still draws in 40% of the commercial tv audience.  Those eyeballs translate into advertising revenue – revenue which, year-on-year, in the year to the end of December, was up by 14%.

Viewed this way, the media industry is financially in quite a good position – because it has torn out costs and overheads are low.  But our papers have been hollowed out and are filled with press releases and syndicated material. There is nothing to suggest that the return to profit means a return to well-resourced journalism, however.

So what is the solution, if we believe that news is a key component of a democratic society? Murdoch is pinning his hopes on paywalls.  I have my doubts about them.

Another possibility is web advertising – but all the evidence is that the revenue is miniscule. Big websites in the USA, such as The Huffington Post, are, at best, breaking even.  Others, such as talkingpointsmemo.com, is funded by venture capital, individual donations and volunteer labour.

Others rely on just donations – such as the aggregator commondreams.com, or Open Democracy in the UK.   According to Chuck Lewis, the founder of the Center for Public Integrity in the USA, all the foundation grants in 2008 gave around $20m for non-profits to undertake investigations.  That is about one tenth of the annual newsroom budget of the New York Times. Also, there is no equivalent of the foundation grants in the UK.

My message is that there is a key role for the state, if we want a vibrant journalistic sphere.

Government has made a token gesture. Ofcom and DCMS have set up three Independently Financed News Consortia, serving Scotland, Wales and the Borders.  These should be opened up, not to the old structures – newspapers and tv channels, but to new, innovative, bids.  At the moment it looks like the old gang – the regional newspaper groups and ITV companies – will be allowed to rearrange the deckchairs.

We have to forget about the old ways.  It is all too easy to compromise journalism if journalists have to worry about finance.

We are at a key point where government could intervene to sustain and support a new model for journalism in the UK.  They should not support organisations that have abandoned journalism, but instead, make money available so that young people, with serious ideas to put forward, can be sustained.  There are lots of technological developments that are very interesting, but few generate any money. 

Even if the economy is resurgent, companies that have given up on journalism will not change their priorities.  For this reason, government must rethink its role and fund journalism as it has the banks and car industry.

 

Granville Williams is a writer, media commentator and member of the national council of the Campaign for Press and Broadcasting Freedom (CPBF ) for whom he is directing a research project, Media Ownership in the Age of Convergence . He has written or edited books on media topics – Britain’s Media: How They Are Related; Shafted: The Media, the Miners’ Strike and the Aftermath.

Dominic Ponsford

How are we going to make journalism pay? By saying to advertisers that we can help them reach a mass audience online, an elite audience in print, and, get to interact with readers at events

  • Despite the recession, the media has remained profitable, and is now poised to bounce back
  • There are opportunities for micro publishing, some examples of which are already making money
  • There are signs that even traditional local newspapers are bouncing back

A year ago, the media seemed to be facing an apocalypse.  Johnston Press’s shares went down to about 12p and Trinity Mirror’s to 15p – that from companies that used to have share prices in the region of £5.  To those who invested in journalism, it seemed like the end.  There were big redundancies and closures of papers. Looking today, media share prices are nowhere near where they were – the share price of the above companies is now above £1.  That means that the worst of the crisis is over and people are starting to launch new products.

Press Gazette (PG) has gone into administration once, closed twice and gone from weekly to monthly – so we are not a shining example of a media brand that has triumphed.  We have survived, however, when everyone had written us off – and there are some lessons in how we did it.

Like most B2B magazines, the bulk of our income used to come from jobs ads.  The internet did for that, as did holdthefrontpage.com, which is jointly owned

Written by Tim Dawson

March 28th, 2010 at 12:38 pm

Gavin MacFadyen

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Foundations have become the key to funding investigative journalism in the USA

  • Similar initiatives are now underway in the UK
  • USA tax and libel laws made foundation-funded journalism a powerful force in that country, but conditions in the UK are not as favourable
  • University-based journalism projects have also created some important new models for investigative reporting

Today 75% of investigative reporting is not done by the media, but by foundations and foundation-supported NGOs.  There has been a profound shift away from newspapers and television.

That is why we started the Centre for Investigative Journalism – we were mainly former Panorama and World in Action staff.  We had realised that there was no training going on in the BBC or ITV for investigative reporters – that is why we set up the centre, as a means of training people.

We were frustrated that we couldn’t raise the funds to do the work that we wanted to do.  That has changed profoundly now.  We have raised more funds than have ever been raised before to do the things that we want to do, at least in the UK.

In the USA there are now 50 or 60 nongovernmental organisations (NGOs) that employ journalists. There are 65,000 unemployed journalists in the USA so there is no shortage of good people, and now organisations like Amnesty, Human Rights Watch and Greenpeace all have research staffs.  And those organisations all raise money from foundations.

These foundations are now moving to the UK.

In 2006, Chuck Lewis formed the Center for Public Integrity (publicintegrity.org).  Lewis decided that he needed to raise funds to research corruption in Washington – no small task.  He was able to raise $4m a year, from lawyers’ groups, free-speech groups, civil-liberties groups.  As a result, the Center produced 160 publications and four bestselling books.  It was the most successful single investigative operation undertaken.  Lewis was a genius at raising money.

Lawyers were an important element of his work.  Lewis went to the biggest, toughest law firms he could find and asked them to help the Center, on a pro bono basis, to defend the Center’s work.  That said, libel laws in the States are nowhere near as tough as they are here. Armed with these prestigious law firms on his board, the law suits started to melt away.

The only successful legal challenge mounted against the Center for Public Integrity was by an oligarch.  Four years ago, he almost succeeded in sinking the entire investigative community in Washington.  The Center only survived because of the massive influx of lawyers to support it.

In the USA, foundations are now spending between $75m – $95m a year on niche and investigative reporting.

At Berkley university, in March each year, there is a big meeting of all these funders.  The biggest is a guy called Sandler who owns about a quarter of downtown Los Angeles.  He is not a modest man, in resources or anything else.  He funded the biggest investigative unit ever assembled in the USA – called Propublica (propublica.org).  It is based in New York in swank offices in midtown Manhattan.  It employs 28 journalists, 13 researchers and 20 production staff.  Propublica’s annual budget is $20m a year. They now have enough money to operate for three years.

The interesting thing about this kind of foundation-supported approach – with the money put up by one family – is that they devised a system of control, like CBS.  There is a corporate wing, that deals with all the money, and an editorial wing.  Communication between the two is allowed only if there is a lawyer in the room to keep an independent minute.  That is intended to ensure that commercial pressures are never brought to bear on the editorial side of the organisation.

The Bureau for Investigative Journalism is our attempt to do something similar in the UK.  It has now raised £2m. It is supported by, but not controlled by, City university.  The Bureau can produce research, but it can’t publish.  We could not find a single lawyer who would recommend that we could publish under our own imprint. We have to go through media outlets with deep enough pockets and liability insurance.  This is the only place in Europe where this is the case.

Libel costs are now estimated at £1,350 an hour.  And it could take two months work from a major law firm just to survive one bad judgement.  So, we must either operate out of Honduras or publish through The Guardian, C4, or whatever.  We also have options to publish through France, Germany, Sweden, Mexico and, the USA.  Currently we arein discussions with CBS Sixty Minutes, PBS Frontline and two outlets in French tv, all of whom are more favourably disposed to publish our work than anyone in the UK.

We have looked at the crowd-sourcing model for funding. There are several operations in the USA where that has been tried.  For example, the Voice of San Diego (voiceofsandiego.org) was started by four restaurant owners and a millionaire backer.  It looks at public health issues, fraudulent accounting and so on.  It has been successful.

I wish that outlets like National Public Radio could survive without money from huge and powerful foundations, but they can’t.  Every single outlet in public radio and television in the USA is funded by three large foundations.

The Park foundation is one, for example (parkfoundation.org).  Without it, there would be no social democratic television and no drama on USA television.  Today drama in the USA is better than here.  PBS Frontline is entirely funded by foundations and has an annual income of $40m a year. It is probably the best-regarded investigative programme in the world. It has roughly the budget that Panorama and World in Action had during the 1970s.

‘Spot.us’ is a new technique that organisations are using in the USA.  It announces, for example, that it wants to investigate road building or sewer malphesance.  The public can then decide whether to send in money, or not.  If the appeal generates enough money, the investigation goes forward.  That would not work in the UK because journalism is competitive and everyone would go after that story.  There is a lot of collegial and cooperate working in the USA that would not work in the UK.  In South Korea there is an internet newspaper with a staff of 30 and 27,000 reporters. Each reporter has his own web cam.  They produce all this stuff, the staff work as editors.  I think that it makes money, I don’t quite know how.  No one quite knows how anything on the web makes money.

Spot.us also has a model which is being investigated for Europe.  French, Italian and funders here, wondered if you could reduce journalism to niche groups – cultural, sports – and get money just for that. Then a federation of all those could be created.

There are some other novel models for funding journalism

The university funding model: unemployed journalists go to a university and extract a commission to train students. In exchange, the university provides research, publication and technical facilities.  That allows the journalists work to get out there – on the web, tv or radio.  There are 130 programmes of this kind in the USA at the moment, three of them very large.

Chuck Lewis has a big one at the American University in Washington (investigativereportingworkshop.org).  Their stuff is very good, so students, trained by professionals are now regularly reporting for the NYT, CBS Sixty Minutes and PBS Frontline.    Part of their success is down to having no material costs. The university has liability insurance.  That model has taken off in a number of universities.  The rich mix of people at most universities also adds to the mix.

Medill Innocence Project (medillinnocenceproject.org) at Northwestern University, is run by David Protess, who had been a Sunday Times reporter.  Protess put one law student with one journalism student to create 20 or 30 teams.  Each team was assigned a person on death row, and asked to exhaustively review their case.  There were plenty of people on death row in Illinois.  At the end of one year, the students’ investigations had led to 13 prisoners being freed because of police corruption, the planting of evidence and so on, uncovered by the students. The Chicago Sun Times jumped in and launched a similar campaign.  Total cost of the project was just $3,000 and it saved all these lives and turned around the way that journalism was perceived in that area.

Three or four UK universities are investigating this model – although you will, of course, have to reintroduce the death penalty.  Conventional funding from foundations, remains the main funder of investigations, however.

Ford Foundation started it, when they became independent of the Ford Motor Co.  It moved further and further to the left as time went on.  It has $35 billion to give away.  The Park Foundation gives away $240m a year.  Its money came from local newspapers in upper New York state.  Those papers provided the family with all the money.  The family split on left-right grounds and the left got the foundation.  They don’t even ask us questions about what we do with the money, they just say, ‘more power to your elbow’.

We get money from George Soros, from the Open Society Foundation.  We have not had a word of interference from them.  They just say ‘do your worst’, and we do our best.

The Lorana Sullivan foundation, is a British foundation. She was a Wall Street Journal journalist who ended up on The Observer for many years.  She was one of the best investigative financial journalists ever.

The Foundation supports the training of young female investigative reporters here and at Columbia in NY.  Her foundation supports the Centre for Investigative Journalism and will hopefully fund the Bureau.

These foundations support organisations such as Propublica, the Centre for Investigative Reporting at Berkeley, the Fund for Investigative Reporting in Washington DC, the Investigative Reporting Workshops at American University in Washington. Lowell Bergman (who was played by Al Pacino in The Insider) does the same at Berkeley. The Logan family give him $5m a year.

The real difference between here and the USA is that, in the USA, the laws are sympathetic to giving. If you can satisfy what is known as the 501c3 provision, you get a huge tax break for giving money.  So rich people get a tax write-off, plus they get a bit of a glow about their name. And this model is moving out of investigative reporting, into arts and sports journalism.

The Huffington Post has its own investigative bureau funded by the Huffington Foundation and another foundation.

The Fund for Investigative Reporting is very different.  It gives completion money or funds travel, if a reporter needs it.  The model is a similar fund in the USA that gives grants of $3 – $5000.  It’s not much money.  But, it was funding like that which gave Seymour Hersh the money to start My Lai – so is very powerful. We could not find anyone who would do that under the current tax law in the UK, however.  So, tax law is as important as the libel law.

Gavin MacFadyen is director of the Centre for Investigative Journalism and is one of the founders of the newly formed Bureau for Investigative Journalism, both foundation-funded non-profits and based at City University. These organisations were established to provide hands-on training for independent, skeptical journalism and to provide funds and resources to encourage high standards in public-interest reporting. He was a long-serving World in Action producer-director and has produced investigative current-affairs television in all the main channels in the UK and the USA.

Written by Tim Dawson

March 26th, 2010 at 8:16 am

Ian Reeves

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There are an increasing number of examples in the United States of media outlets being funded by community donations

  • National Public Radio raises 30% of its revenue from ‘pledge drives’
  • News sites in New York, Chicago and Minnesota have also had some success with this model
  • A handful of individuals have also sought reader-funding for their work, although there aren’t any examples of this working particularly well

There are some interesting examples of community-funded journalism from the United States.  It is plausible to ask a diverse community to donate to something that they consider a common cause.  The election of Barak Obama is a great example.  He used digital media to mobilise and raise funds for his campaign.  He raised record sums, more than $600m dollars from more than 2.5m individuals. More than that half of that was from individuals who gave between $5 and $200.  The average online donation was $80.  So, yes, it is plausible.

But is it plausible to ask a diverse community to pay for journalism?  There is a news-based organisation that operates more foreign bureaus than any other mainstream USA media; that has an operating budget of $150m per annum. And its audience has grown 47% in the last decade.  It is called National Public Radio (NPR) – which is rather an old fashioned brand, but its model depends on donations from its listeners.  It is actually a network of radio stations.  They frequently have ‘pledge drives’.  Station presenters directly ask the audience for money.  About 30% of NPR’s revenue comes from that source.

WAMU is Washington-based.  Its main pledge drive is in February.  Last year it raised $1.2m directly from pledges.  NPR, although not entirely community-funded, demonstrates that people can be persuaded to pay for something that is free-to-air.

It is an established organisation, however, with an entrenched infrastructure.  Is the model workable further down the food chain of journalism?  Would it work on a smaller outfit, or help to fund a start-up?

There are news organisations where they are trying to make it work.  The Gotham Gazette (gothamgazette.com) regularly runs reader appeals, usually for specific purposes.  In a recent one, the Gazette said that it wanted to fund a reporter for a particular part of the city.  So, they ran a $25,000 funding campaign for a reporter to cover that beat – and they were successful.

Chi Town Daily News (chitowndailynews.org) – is another not-for-profit news site.  Most of its funding comes from grants – but it has raised $25,000 from reader appeals.  The site has now closed.  Its owners thought that it was falling 60% short of funding needed.

The most positive example is Minnpost.com, based in Minnesota.  All its content is free-to-view, but they have a ‘membership approach’ to raising funds.  Depending on the amount that you pledge, then you are accorded ‘media baron’ status, or ‘city editor’ or, ‘cub reporter’ for a $10 donation.  In the first 12 months, 1,250 people signed up to the Minnpost.com as donor members at different levels. It was initially funded by various grants, but they have a robust business plan.  They hope to break even by 2011 or 2012, and appear to be on line for that.

The Miami Herald has started soliciting donations from readers. You see at the bottom of all their online stories a tip-jar style feature.  The paper is making positive noises about how they are doing, but some argue that it amounts to begging, and will damage their brand in the eyes of prestige advertisers.

Could you scale it down for an individual journalist to use a similar model on line? There are examples which give some credence to the idea.  Chris Allbritton (back-to-iraq.com) is a former AP and New York Daily Post journalist.  He was covering Iraq for the NY Daily Post.  They called him home and he wanted to stay.  He had been doing a blog that had quite a lot of readers, so he asked his readers if they would stump up to keep him there as a non-embedded war reporter.  He got $15,000, which was not enough for what he wanted to do, but it was enough for him to stay there for several months, just writing for that audience.

In 2005, tech blogger, Jason Kottke (kottke.org), had a three-week fund raising drive, made $40,000 from ‘micro patrons’.  He found the pressure of that number of owners to be far too onerous –  1,500 bosses was too many.  His relationship with the readers changed.  He could not go on holiday.

Jim Hopkins, launched a blog about Gannett (gannettblog.blogspot.com).  He is a former editor from USA Today.  He set up a blog about the company and asked if followers would donate.  He wanted to raise $24,000 to cover the costs he felt he was incurring running this blog.  In six months he raised half of that, but again, the pressure grew too much.  “I have grown weary of people second-guessing how I live.  Imagine having dozens of parents chastising you for taking a vacation?” he said.

So, the idea of community funding is plausible; but it is not a silver bullet.  There aren’t any examples going on over here, to speak of.  But it is worthy of investigation.

Ian Reeves is director of learning at the department of journalism at the University of Kent and a former editor of Press Gazette. He has made a study of how ‘crowdfunding’ works in the USA, both in the national public radio network and on news websites and of how the approach might be applied in Britain.

Written by Tim Dawson

March 26th, 2010 at 8:16 am