The case for non-profit news

With the many challenges facing the newspaper business, many different ideas on how to save the industry have been trotted out.

One that I had pretty much dismissed immediately was the non-profit model. Maybe it's the capitalist in me, but I thought the quest for profits to be a great catalyst for innovation, and a required element of any attempt to revolutionize the newspaper business.

But the more I think about it, the more I'm beginning to see the genius of the non-profit news model, at least as it pertains to local media.

To understand this change, you have to understand the huge problems facing local news. I read a recent piece by Vin Crosbie that lays out how the industry got behind the supply and demand curve, to a point where the value of what we produce just isn't enough to pay the bills. I would add to that the supply and demand difficulties on the advertising side as well, which has dropped online advertising rates to levels that make it increasingly hard to make sustainable revenues for online-only enterprises.

Local newspapers have been viewed by the community as performing a public service, informing them of the news they need to know. But as newspapers cut back on staff and newshole, this perception is changing. Readers are becoming increasingly aware that our motives are private profit, not public service. They can see all those years when we pulled in 20 and 30 percent profit margins that flowed out of the communities and into corporate coffers, usually to buy more newspapers. But now during the tough times, there is no reserve left to maintain the level of public service the readers expect.

And then we hit them with our efforts at "community journalism," trying to get our readers to write the stories and shoot the photos that we don't do anymore. I'm not knocking the concept of getting readers to participate in the journalism. But when you cut back on the public service you used to offer and ask readers to take up the slack, the "public service" perception starts breaking down. Why should the readers help subsidize a for-profit business that was too short-sighted to deal with this crisis?

I think this is where non-profit Internet news start-ups have an opening. As non-profits, they can successfully gain the advantage with the public in terms of providing a public service. They can call out for volunteers and donations without the for-profit hypocracy hanging over their heads. And while you can't become the next Rupert Murdock becoming a non-profit publisher, but you can earn a decent paycheck. And in this economy, that's doing OK.

I'm not too optimistic about the success of newspapers companies to survive much longer. If they economy turns around next year, they may live to print another day. But if the downturn goes into 2010 and longer, they are toast. McClatchy stock was at $75 three years ago. The last I saw, it was at $1.50. Gannett was at $90, and is now at $8. Pretty soon, someone is going to realize that they can make more money liquidating these companies than keeping them going.

If newspapers start going under, those who are set up as non-profit news organizations in their communities could see a huge benefit.

In the midst of writing this post, I came across this article from the New York Times about non-profit news outlets like Minnpost.com and voiceofsandiego.com. Here is a good quote from Buzz Woolley, president of voiceofsandiego.com:

“Information is now a public service as much as it’s a commodity,” he said. “It should be thought of the same way as education, health care. It’s one of the things you need to operate a civil society, and the market isn’t doing it very well.”

(cross-posted to Sustainable News Project)