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April 21 2011

14:00

The newsonomics of a single investigative story

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

It’s a week to celebrate great investigative work. ProPublica made some history with its Pulitzer for online-only work about the financial meltdown, and the Los Angeles Times crowned its success with the larger-than-life Bell corruption tale, winning its own top prize. Both well deserved.

Meanwhile, as journalists sat around their terminals awaiting the Pulitzer bulletin, an investigative series broke across California, perhaps reaching more audience more quickly than any previous investigative piece. There were no bodies to count, nor billions or millions of ill-gotten gains to uncover.

Rather, California Watch’s “On Shaky Ground” series is aimed at preventing disaster, getting ahead of the Grim Reaper. The series took a big look at the likely safety issues in the state’s schools when (not if, right?) The Big One hits. It found, not surprisingly, that although state law mandated seismic preparations, all kinds of bureaucratic nonsense has contravened that intent. It found that about 1,100 schools had been red-flagged as in need of repair, with no work done, while tens of thousands of others were in questionable and possibly illegal shape. The so-what: Some of the very institutions providing for the kids of California have a certain likelihood of actually falling on top of them and killing them.

It’s old-fashioned, shoe-leather, box-opening, follow-the-string journalism, and it is well done.

While it’s fun to celebrate great journalism, anytime, it’s vital to look at the newsonomics of this kind of investigative journalism. What did it take to get it done? How much did it cost and who paid for it? And, to look at the plainly fundamental question: How do we get lots more of it done in the future?

The series took more than 20 months to complete. The interactive timeline, “On Shaky Ground: The story behind the story,” tells that tale with tongue in cheek; it’s a great primer for any beginning journalism class. Corey G. Johnson, freshly hired from North Carolina and part of a young reporting contingent that has been mixed and mentored well by veterans like editorial director Mark Katches, stumbles on a list of 7,500 “unsafe schools” as he’s doing a routine story on the 20th anniversary of the Loma Prieta earthquake.

Along the way, the story grows in import and paperwork. California Watch, the less-than-two-year-old offshoot of the Berkeley-based Center for Investigative Journalism (CIR), adds other staff to the effort, including reporter Erica Perez, public engagement manager Ashley Alvarado, distribution manager Meghann Farnsworth, and director of technology Chase Davis, among other reporters.

In the end, the series rolled out in three parts — with maps, databases, historical photos, its own Twitter hashtag, a “My Quake” iPhone app — and a coloring book (“California Watch finds a new consumer group, kids“), intended to reach kids, the most important subject and object of the reporting. Already, the state legislature has scheduled hearings for April 27.

The reach of the roll-out is one of the new lessons here. Six major dailies ran at least some part of the series. ABC-affiliate broadcasters took the story statewide. Public radio news leaders KQED, in the Bay Area, and KPCC, in L.A. ran with it. KQED-TV. The ethnic press signed on: La Opinion ran two seismic stories Sunday and Monday, while at least two Korean papers, one Chinese paper, and one Chinese TV station included coverage as well. More than 125 Patch sites in the state (California is major Patch turf) participated.

A number of the distributors did more than distribute. They localized, using data from California Watch, and reporting on their local schools’ shape. KQED-TV produced a 30-minute special that is scheduled to air on at least 12 PBS affiliates in the state.

San Francisco Chronicle managing editor Steve Proctor is frank about how priorities and resource use have changed in the age of downsizing. When Proctor came to the paper in 2003, he says, the paper had five to seven people assigned to a full-time investigative team. Now there’s no team per se, with the Chronicle investing investigative resources in an “investigate and publish” strategy, getting stories out to the public more quickly and then following up on public-generated leads they create. It’s an adjustment in strategy and in resource allocation — and the California Watch relationship makes it even more workable. “We’ve been pretty sympatico with them from the beginning,” he said. “We’ve used the majority of what they’ve produced.”

So let’s get deeper into some numbers, informed by this series, and see where this kind of work can go:

  • “On Shaky Ground” cost about $550,000 to produce, most of that in staff time, as the project mushroomed. That’s now a huge sum of money to a newsroom, even a metro-sized one. Ask a publisher whether he or she is willing to spend a half a million on a story, and you know the answer you’ll usually get. It’s a sum few newsrooms can or will invest. Consequently, the economics of getting a well edited, well packaged series for a hundreth of that price is an offer few newsrooms can (or probably should) refuse.
  • California Watch, not yet two years old, runs on a budget of about $2.7 million a year. That budget supports 14 journalists, whose funding takes up about 70 percent of that $2.7 million number. That’s an intriguing percentage in and of itself; most daily newspaper newsrooms make up of 20 percent or less of their company’s overall expenses. So, disproportionately, the money spent on California Watch is spent on journalists — and journalism.

The project is about midway through its funding cycles. The ubiquitous Knight Foundation (which has contributed about $15 million to a number of investigative projects nationwide through its Investigative Reporting Initiative), the Irvine Foundation, and the Hewlett Foundation, all of which have provided million-dollar-plus grants, are reviewing new proposals.

The key word, going forward here, is “sustaining.” Will foundations provide ongoing support of the “public good” of such journalism? There’s lots of talk among foundations, but no clear consensus among journalism-facing ones. “There really isn’t a foundation community that thinks with a common brain — same situation as in the news community,” Knight’s Eric Newton told me this week. “Each foundation makes its own decisions using different criteria. Some foundations see their role as launching new things and letting nature take its course.” CIR executive director Robert Rosenthal is among those trying to find a new course. Although he’s a highly experienced editor, he finds that most of his time is found fund- and friend-raising.

  • California Watch is building a syndication business, feeling its way along. Already, six larger dailies — the San Francisco Chronicle, the Sacramento Bee, the Orange County Register, the San Diego Union-Tribune, the Fresno Bee, and the Bakersfield California — are becoming clients, paying a single price for the all-you-can-eat flow of daily and enterprise stories California Watch produces. They, a number of ABC affiliates (L.A.’s KABC, the Bay Area’s KGO, 10 News San Diego, 10 News Sacramento, KSFN in Fresno), and KQED public radio and TV in the Bay Area are also annual clients pay between $3,000 and $15,000 a year each. A la carte pricing for individual projects can run from $3,000 to $10,000. The California Watch media network, just launched in January, is an important building block of the evolving business model. It is clear that while syndication can be a good support, at those rates, it’s a secondary support.
  • So, if California Watch were to be totally supported by foundation money, it would take an endowment of $54 million to throw off $2.7 million a year, at a five percent spend rate. Now $54 million raised one time isn’t an impossible sum. Consider just one gift: Joan Kroc left NPR more than $200 million eight years ago. Consider that the billionaires’ club started by Bill Gates and Warren Buffett (encouraging their peers to give away half of their wealths) is talking about newly raising a half a trillion dollars for the public good. Last summer, I suggested the group tithe a single percentage point of the club’s treasury for news-as-a-public-good. It seems to me that stories like “On Shaky Ground” make that pivotal education/health/journalism connection; send “Shaky Ground” to your favorite billionaire and urge him to sign on.
  • Let’s do some cost-benefit analysis. How much is a single child’s life worth? How about a school of 250? We could consult a liability lawyer, who undoubtedly would put assign a six- and seven-figure number per life, and then tie up the courts, post-disaster, making the math work. So if California, bereft as it is of capital, were to invest in the infrastructure, per its own laws, wouldn’t it be ultimately cost-effective? Of course it would be, and in this case we see in microcosm, the question of American infrastructure writ large. Are we a country that will let more bridges fall into mighty rivers, more schools fall onto our children and more poor roads cause preventable injury and death? You don’t need my political rant here. Rather, let us just make the point that journalism — old-fashioned journalism, newly digitally enhanced — is a key part of forcing America to face its own issues, whatever the solutions.

In this project and in California Watch generally, we see the reconfiguring of local media. An owner — whether AOL, Hearst, or private equity — can hardly reject the offer of paying one-hundreth of the cost for space-filling, audience-interesting content. Welcome to a new kind of content farm, to use that perjorative for a moment. Yes, California Watch operates on the same Demand Media-like principle of create-once-distribute-many, realizing the digital cost of the second copy is nil. Let’s consider it the organic, cage-free content farm. It makes sense for a state the size of a country (California = Canada); smaller versions of it make equal sense for Ohio, North Carolina, or Illinois.

Older media outsources journalism and in-sources (affordable) passion. There are lots of lessons here (“3 Reasons to Watch California Watch“), but that fundamental rejiggering of who does the work and how it is distributed and customized is a key one. As Mark Katches points out, “They [distributing partners] put their voices on our story.” That’s a new system in the making.

Old(er) editors can learn new tricks. For a good show-and-tell of that principle, check out Rosenthal’s talk to TEDxPresidio two weeks ago. I first saw him give the talk at NewsFoo in Phoenix in December. Amid more tech-oriented talks, his stood out and was much applauded. It’s a clarifying call for real journalism, perfected for the digital age. Share it.

September 09 2010

14:00

The Newsonomics of public radio’s Argonauts

[Each week, our friend Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of the news business for the Lab.]

Overnight, it seems, journalism has been transformed from a daily grind to an heroic quest. Rupert Murdoch has dubbed his adventure to get readers to pay for tablet (and other) content Alesia (after a Roman/Gauls battle) and now public radio formally launches Project Argo. Ah, journalists pursuing the golden fleece. Forget Woodstein — the pursuit of journalism itself is now an against-all-odds mythic trip against budget monsters and business model slayers.

If last year was the year of massive cutting, this is the year of new news creation popping up from unusual quarters. AOL’s Patch is probably the biggest hiring agent, with more than 400 new full-time jobs covering local communities. Sites like TBD.com and Bay Citizen are crafting new products and strategies and hiring dozens of journalists. Now Argo pushes forward, in a quest to stick a new flag of public media in terra incognita, and is hiring journalists in the process.

Argo is intended to bring a high level of attention to hot button topics, covered from a regional perspective. “We want to be the best means of authoritative coverage,” NPR Digital Media G.M. Kinsey Wilson told me recently. [We want] to be the top-of-mind choice for issues like immigration [now covered out of L.A. by KPCC with the Argo site Multi-American].”

Coverage is handled by the increasingly familiar reporter/blogger/curator, finding the most relevant coverage for readers. Largely providing a single new full-time position for each new site, “hosts” come from some impressive reporting backgrounds, like WBUR’s Carey Goldberg, former Boston bureau chief of The New York Times, and Rachel Zimmerman, former health and medicine reporter for The Wall Street Journal. Much of the content — and there’s an impressive amount at launch — is text, not audio.

At first, Argo seems hard to put in context. It’s public radio becoming public media becoming locally topical, but in ways that can inform more than local audiences — which we used to think of as public radio listeners, but who are now public media listeners and readers. Got that?

I’ve talked to a number of people in the emerging public media landscape — a fairly merry lot of Argonauts and other dragon slayers who see lots of upside — so let’s take a look at the emerging newsonomics of projects like Argo.

By the raw numbers, Argo is a $3 million investment. That’s not much by traditional journalism standards, but in this day and age, it wins headlines, like the minor economic development miracle of a new big-box store being covered on the Metro front. The money comes both from a foundation — the omnipresent Knight Foundation at $1 million — and from the Corporation for Public Broadcasting at $2 million.

That Knight funding reminds us of the good that’s still being done by the once dependable profits of newspaper companies, as Knight Ridder funding built one of the 25 foundations in the country, one that has been instrumental in seeding sprouts of the new new journalism.

That CPB funding reminds us that our tax dollars have been supporting news for more than four decades now, even as the debate rages abstractly on whether it’s a good idea to have “government” in the news business. NPR’s news effort — supported by members, philanthropists like Joan Kroc and yes, our tax dollars — makes a pretty good case that some government funding is a good idea, especially if we compare NPR radio news to what is elsewhere generally available in the growing desert of commercial radio news coverage.

Argo itself is 12 sites, produced by 14 public radio stations (two sites are jointly produced), each specializing in major topics like education, health, immigration, and ocean health, and exploring that topic regionally. Journalists are hired by individual public radio stations, each of which applied for the funding. The initial funding is intended to sustain the sites through the end of next year — and to provide “prototype products,” according to Wilson.

So that funding is one of the first things that tells us about the business of this effort. Like Silicon Valley startups, the effort is about building a product that seems to meet a clear audience need, building that audience — and then finding a sustainable business model. That’s what has built companies for decades in the valley, and it’s in contrast to how much of the journalism business has long gotten funded.

Looking under the covers, though, here are three more things to watch about the emerging economic model underneath Argo:

  • It’s local and vertical. In the conundrum that the web has been for newsies, publishers often felt compelled to choose “local” or “vertical,” the fancy term for topical. Of course, readers’ concerns encompass both, and an education site that focuses on local education (such as Minnesota Public Radio’s Argo site On Campus) creates double value and may multiply audience. Even though, it’s “local,” just as WBUR’s CommonHealth, it will find national audiences as well.
  • It’s built for networking. Public radio used to a fairly one-way street, with national NPR and then Public Radio International and American Public Radio essentially licensing or syndicating shows to local stations, of which there are more than 250. Now built on increasingly flexible technologies like NPR’s emerging API and PRX’s exchange, local stations can increasingly both syndicate their own work, Argo-funded and other, to each other — and pick up other stations’ work more easily. In a sense, we see an alternative wire in creation, especially as the Public Media Platform goes forward.
  • It builds on public radio stations’ local news push. A number of stations represented in Argo have also begun building out their local/regional/statewide news presences. KQED, in the Bay Area, which is launching MindShift through Argo, just hired eight new news staffers as it launched KQEDNews.org (Good piece by MediaShift’s Katie Donnelly on the initiative and its context.) So in KQED’s case, as in WBUR’s, KPCC in L.A.’s, and Oregon Public Broadcasting’s, the topical initiative receives more play due to the expanded news reach — and the expanded news reach gets more public notice because of the new topical coverage.

Each of those factors are multipliers, multipliers of public radio’s emerging digital news business. They multiply audience. They multiple the ability to get members and membership income. They multiply sponsorship opportunities, the “advertising” of public radio. That’s on the business level. On the journalism level, public radio’s news values — the closest to newspaper’s traditional ones — get to flex their muscles, another early test of just how far public media wants to go in filling the yawning local news vacuum.

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