It’s understandable that journalists shocked at the financial state of their industry would at some point think about a non-profit business model.

 

Behind the cynicism of most reporters lies a romantic streak, for one. We like the idea of being able to pursue our dedication apart from the muddied waters of the profit motive.

 

For another, we’ve all seen the damage caused by the short-sighted drive for profits in the large companies that own so many of the nation’s daily papers.

 

It’s well established that cost-cutting and ever-increasing boardroom demands for higher returns crippled papers in various ways when they needed to figure out how to navigate the internet.

 

But it’s a dead end, for a number of reasons. Here’s a few.

 

1. There is no money in it.

As I have written about before, one of the unfortunate aspects of the debate about the future of newspapers is how little basic knowledge of the economics of the industry is brought to the discussion.

 

A precis: Newspapers didn’t sell news and we as readers did not pay for it. Subscriptions make (and made) up only a small percentage of the paper’s revenues.

 

Newspapers earn their money by selling ads on newsprint and delivering them, via a societal convention cum monopoly, to people’s doorsteps’ each morning. The value of that monopoly subsidized the news gathering.

 

Unfortunately, the monopoly is seeing its value plunge precipitously.

The point is this: Any plan to make money doing journalism that doesn’t contain a revenue source involving magic money on this scale isn’t going to work.

 

2. And that’s only half of it.

 

It’s likely that a lot of the people reading this essay fancy themselves news junkies or the like.

 

Most people aren’t like us.

 

They go—or rather, went—to the papers for the sports section, the ads, the stock tables, the comics, the TV listings, or because they always did, or because their parents did.

 

What was the percentage that actually, you know, read the news? 40 percent? 30 percent?

 

In the non-profit model we ask readers to pay us for the news, via tax-deductible donations or voluntary subscriptions. (I’m assuming the news wouldn’t be up behind a pay wall.) 

 

It’s far to take as a benchmark of the money available for this what people used to pay for the daily paper delivery; at least, it’s as good a measure as is available.

 

So if you want to transfer the economics of newsgathering to the web, you have to take the small percentage of revenue the papers actually got from subscriptions—10 percent, 20 percent?—and then take 30 percent of that.

 

I’m not saying my calculations aren’t crude, but I am saying it’s a realistic place to start.

 

Now, there’s an upside, actually, on the other half of the equation. Doing a high-minded nonprofit news operation on the web doesn’t have the same overhead as a big city paper does. Let’s start with no delivery drivers or printers, HR departments or page designers.

 

No more of those fluff non-news departments, and no unions, either!

 

Still.

 

The costs-to-potential-income ratio is vastly, fatally, lopsided.

 

3. It’s not just that the economic base of the operation will be small. The readership will be, too.

 

People say they want news, of course. World news! Investigative reporting! Reporters digging through public records!

 

Yeah, right.

 

Let’s stipulate the creation of your online news site, created as a nonprofit, that somehow managed to craft together donations from whatever sources to get a staff together and writing strong journalism.

 

If it spent that money presenting high-minded news, it wouldn’t get much readership.

 

At Salon.com, which I think is a fair example to give, in that it balanced serious and investigative journalism with, uh, lots of articles about sex and TV, we all saw how few people read the articles that took the most time and money and effort to produce.

 

Now, it didn’t always happen that way. If you kept banging on a particular issue, over time you could build up a decent readership for in-depth reported stories on the subject. As I recall, the series of articles Eric Boehlert wrote about scummy Clear Channel, which I had the privilege of working on, got some pretty good numbers after we’d posted a few.

 

But even those would be dwarfed by anything about “Survivor,” or Lord of the Rings, or certain sexual proclivities, or, in the tech world, the open-source darling of the time.

 

(Let me tell you, an article about a Star Wars/Lord of the Rings trivia contest between lesbian Linux programmers would have caused an internet meltdown.)

 

Here’s the issue: Trying to build readership for a nonprofit news organization from scratch will be extremely difficult.

 

The interest just isn’t out there.

 

4. Aha! say the non-profit proponents. We will leaven the investigative work and stuff that’s good for society with lighter fare!

OK, let’s do it.

 

We have two options. We can try to find that audience-building fare for free, or we can pay for it.

 

The first option can work, and sometimes does, even if it does tend to involve videos of cats playing the piano.

 

Let’s take a breath and examine our business plan for option one:

 

“People are going to give us money for a non-profit enterprise to produce high-quality journalism, which generally they don’t want to read, but we’re going to lure them in with non-high-quality but more popular things, which we will produce for free.”

 

Hmmm—time to fine-tune. The second option—paying for the other stuff—can be effective, too, given some sharp editors capable of finding and nurturing talent. But the editors cost money, and so does the talent.

 

And that puts you into another tangled position—raising money to pay for the lures to your site … to get people to read the stuff they don’t really care about reading, which you also want people to give you money for.

 

5. But let’s say you figure out how to thread that needle.

 

You get an extraordinary group of people together ready to create, for free, content that will bring readers to the site. That content will draw attention to your operation and its worthy and societally important hard-news reporting.

 

Never going to happen. Why?

 

Because in the old-fashioned terrestrial printing or broadcasting models, the organizations could always get a base audience just by virtue of the fact they existed. The magazines were on the newsstand, in the newspaper boxes on the street, on peoples’ doorsteps; the TV or radio stations were right there to be stumbled upon by potentials viewers or listeners.

 

On the web there is no de facto or built-in audience. You have to come up with something to draw attention to yourself.

 

But: A nonprofit company is a timid company.

 

I’m not saying they won’t publish tough articles on tough subjects.

 

But that’s the stuff we’ve already talked about: The stuff people say they want to read and never do, and that we journalists want people to read, but know they don’t.

 

I’m talking about things that will bring readers to the site. Elements that will take chances, create sensations, and draw attention to themselves.

 

Now, once in a while non-profits do that, too, and often laudably stand up and brave criticism, and even withdrawal of their funding.

 

But they don’t like it. And in the long run they can’t make provocation part of their day-to-day business model.

 

You want content that draws attention on the internet? It has to be provocative.

 

I don’t mean Glenn Beck provocative. But you need people to take counter-intuitive, iconoclastic positions, just to find some attention in the vast web.

 

That’s all well and good, until the people go a bit too far.

 

Going too far works in some ways. It draws in like-minded people, starts building a community. In that context, a provocative columnist, say, can feed them red meat.

 

But then that starts undercutting your reporters and the news gatherers. Soon, some of the people paying the bills, whether big ticket funders or, in the fantasy we’re working with here, the bunch of regular people willing to put up their hard earned money for good, straightforward hard-hitting journalism, will start having second thoughts.

 

“Is my money going to that?!?”

 

No no no, you explain. Your money is going for the reporters….

 

“… But see, since no one cares about what the reporters are doing, we have to find alternative ways of getting eyeballs on the site, and our scheme is to have Fred, there, develop a crazy following to bring in people to read the actual journalism….”

 

It would be great if a nonprofit news site had the cojones, if you will excuse the expression, to make that argument. It actually makes sense, and a talented person could probably pull it off. (More on that in a minute.)

 

But I don’t think that DNA is going to be in the makeup of these sites.

 

5. What you really need to do is find a visionary.

A strong and capable leader, committed to the non-profit model, willing to use his or her flamboyance and charisma to keep the money coming in and get the company through the inevitable crises with good humor and reputation intact, could, in theory, lead a non-profit news site to success. .

 

There’s not a lot of people like that. They are valuable if you can find them, of course, and that’s their major drawback: They cost money.

 

That site in SF is already taking heat for the $400,000 salary it’s doled out to its CEO, a veteran not of publishing but of the the McKinsey consulting firm … and we’re still waiting to hear what it’s paying the top editor.

 

ProPublica pays nearly $600,000 for its editor.

 

That’s a fair model, I guess, if you don’t care about money, the publication’s image, the morale of its employees, or just basic standards of what’s appropriate and what isn’t in the nonprofit sphere.

 

Alan Mutter, on his site Reflections of a Newsosaur, notes there’s another available, like the one used in Minneapolis, where a $1 million or so annual budget keeps 18 people on salary and a lot of freelancers writing.

 

That’s a model that can make an honest appeal to contributors. But whose going to donate to a local news site where editors are getting paid $400,000? Who’s going to contribute free content?

 

6. And finally, non-profits are too goddamned wholesome.

 

Here’s a cheap shot, but I think it’s a good example.

 

That startup in SF got a local rich guy to pony up $5 million for a nonprofit news site there. Some other groups are involved and there are some other funding sources, too.

 

It was originally called the Bay Area News Project.

 

The new name? The Bay Citizen.

 

What a crummy name. It’s hokey, wishful, dishonest, smarmy and abstract all at the same time. It sounds like something out of a Hardy Boys book.

 

Is that what that $400,000 McKinsey consultant is bringing to the table?

 

Take a look through some of the home pages of the nonprofit sites up and running now — in San Diego, Orange County, Minneapolis — and you will see very little that’s compelling.

I’m not saying they are bad. I’m sure a lot of the information they are generating is worthy, too. I’m just saying that most people aren’t going to give those sights a second look. The headlines are turgid; the designs are cluttered.

 

As for the lighter material, check out some of the provocative commentary on the Minneapolis site: “In defense of libraries, both home and public”; “Whistling songs: at least 15 ways to annoy your friends and co-workers.”

 

——–

 

The trouble behind all of this is that we want people to be different from the way they are.

 

In reporters’ dreams, we all chip in a little to give them a livelihood, and their earnest, dutiful stories are the talk of the town.

 

But it didn’t happen that way before, and it’s not going to happen in the future.

 

 

——–

 

Five Key Reasons Newspapers Are Dying (but don’t get talked about), part one.

 

Five Key Reasons Newspapers Are Dying (but don’t get talked about), part two.

 

 

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