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November 11 2010

16:00

The Newsonomics of journalist headcounts

[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.]

We try to make sense of how much we’ve lost and how much we’ve gained through journalism’s massive upheaval. It’s a dizzying picture; our almost universal access to news and the ability of any writer to be her own publisher gives the appearance of lots more journalism being available. Simultaneously, the numbers of paid professional people practicing the craft has certainly lowered the output through traditional media.

It’s a paradox that we’re in the midst of wrestling with. We’re in the experimental phase of figuring out how much journalists, inside and out of branded media, are producing — and where the biggest gaps are. We know that numbers matter, but we don’t yet know how they play with that odd measure that no metrics can yet definitively tell us: quality.

I’ve used the number of 1,000,000 as a rough approximation of how many newspaper stories would go unwritten in 2010, as compared to 2005, based on staffing reduction. When I brought that up on panel in New York City in January, fellow panelist Jeff Jarvis asked: “But how many of those million stories do we need? How many are duplicated?” Good questions, and ones that of course there are no definitive answers for. We know that local communities are getting less branded news; unevenly, more blog-based news; and much more commentary, some of it produced by experienced journalists. There’s no equivalency between old and new, but we can get some comparative numbers to give us some guidelines.

For now, let’s look mainly at text-based media, though we’ll include public radio here, as it makes profound moves to digital-first and text. (Broadcast and cable news, of course, are a significant part of the news diet. U.S. Labor Department numbers show more than 30,000 people employed in the production of broadcast news, but it’s tough to divine how much of that effort so far has had an impact on text-based news. National broadcast numbers aren’t easily found, though we know there are more than 3,500 people (only a percentage of them in editorial) working in news divisions of the Big Four, NBC, ABC, Fox, and CBS — a total that’s dropped more than 25 percent in recent years.)

Let’s start our look at text-based media with the big dog: daily newspapers. ASNE’s annual count put the national daily newsroom number at 41,500 in 2010, down from 56,400 in 2001 (and 56,900 in 1990). Those numbers are approximations, bases on partial survey, and they are the best we have for the daily industry. So, let’s use 14,000 as the number of daily newsroom jobs gone in a decade. We don’t have numbers for community weekly newspapers, with no census done by either the National Newspaper Association or most state press associations. A good estimate looks to be in the 8,000-10,000 range for the 2,000 or so weeklies in the NNA membership, plus lots of stringers.

Importantly, wire services aren’t included in the ASNE numbers. Put together the Associated Press, Reuters, and Bloomberg (though some of those workforces are worldwide, not U.S.-based) and you’ve got about 7,500 editorial staffers.

Let’s look at some areas that are growing, starting with public radio. Public radio, on the road to becoming public media, has produced a steady drumbeat of news about its expansion lately (“The Newsonomics of public radio argonauts,” “Public Radio $100 Million Plan: 100 Journalist Per City,”), as Impact of Government, Project Argo, Local Journalism Centers add more several hundred journalists across the country. But how many journalists work in public broadcasting? Try 3,224, a number recently counted in a census conducted for the Corporation for Public Broadcasting. That’s “professional journalists”, about 80% of them full-time. About 2,500 of them are in public radio, the rest in public TV. Should all the announced funding programs come to fruition, the number could rise to more than 4,000 by the end of 2011.

Let’s look at another kind of emerging, non-profit-based journalism numbers, categorized as the most interesting and credible nonprofit online publishers by Investigative Reporting Workshop’s iLab site. That recent census includes 60 sites, with the largest including Mother Jones magazine, The Christian Science Monitor, ProPublica, the Center for Investigative Reporting, and and the Center for Public Integrity. Also included are such newsworthy sites as Texas Tribune, Bay Citizen, Voice of San Diego, the New Haven Independent and the St. Louis Beacon. Their total full-time employment: 658. Additionally, there are high dozens, if not hundreds, of journalists operating their own hyperlocal blog sites around the country. Add in other for-profit start-ups, from Politico to Huffington Post to GlobalPost to TBD to Patch to a revived National Journal, and the journalists hired by Yahoo, MSN and AOL (beyond Patch), and you’ve got a number around another thousand.

How about the alternative press — though not often cited in online news, they’re improving their digital game, though unevenly. Though AAN — the Association of Alternative Newsweeklies — hasn’t done a formal census, we can get an educated guess from Mark Zusman, former president of AAN and long-time editor of Portland’s Willamette Week, winner of 2005 Pulitzer for investigative reporting. “The 132 papers together employ something in the range of 800 edit employees, and that’s probably down 20 or 25 percent from five years ago”.

Add in the business press, outside of daily newspapers. American City Business Journals itself employs about 600 journalists, spread over the USA. Figure that from the now-veteran Marketwatch to the upstart Business Insider and numerous other business news websites, we again approach 1,000 journalists here.

What about sports journalists working outside of dailies? ESPN alone probably can count somewhere between 500 and 1000, of its total 5,000-plus workforce. Comcast is hiring by the dozens and publications like Sporting News are ramping up as well (“The Newsonomics of sports avidity“). So, we’re on the way to a thousand.

How about newsmagazine journalists? Figure about 500, though that number seems to slip by the day, as U.S. News finally puts its print to bed.

So let’s look broadly at those numbers. Count them all up — and undoubtedly, numerous ones are missing — and you’ve got something more than 65,000 journalists, working for brands of one kind or another. What interim conclusions can we draw?

  • Daily newspaper employment is still the big dog, responsible for a little less than two-thirds of the journalistic output, though down from levels of 80 percent or more. When someone tells you that the loss of newspaper reporting isn’t a big deal, don’t believe it. While lots of new jobs are being created — that 14,000 loss in a decade is still a big number. We’re still not close to replacing that number of jobs, even if some of the journalism being created outside of dailies is better than what some of what used to be created within them.
  • If we look at areas growing fastest (public radio’s push, online-only growth, niche growth in business and sports), we see a number approaching 7,500. That’s a little less than 20 percent of daily newspaper totals, but a number far higher than most people would believe.
  • When we define journalism, we have to define it — and count it — far more widely than we have. The ASNE number has long been the annual, depressing marker of what’s lost — a necrology for the business as we knew it — not suggesting what’s being gained. An index of journalism employment overall gives us a truer and more nuanced picture.
  • Full-time equivalent counts only go so far in a pro-am world, where the machines of Demand, Seed, Associated Content, Helium and the like harness all kinds of content, some of it from well-pedigreed reporters. While all these operations raise lots of questions on pay, value and quality, they are part of the mix going forward.

In a sense, technologies and growing audiences have built out a huge capacity for news, and that new capacity is only now being filled in. It’s a Sim City of journalism, with population trends in upheaval and the urban map sure to look much different by 2015.

Photo by Steve Crane used under a Creative Commons license.

August 19 2010

18:30

Seeking Sustainability, Part 3: VOSD’s Scott Lewis and others on engagement, community-building

Seeking Sustainability: Presentation on engagement and community-building from Knight Foundation on Vimeo.

This spring, the Knight Foundation hosted a roundtable discussion exploring a crucial issue in journalism: the sustainability of nonprofit news organizations. This week, we’re passing along some videos of the conversations that resulted (and, as always, we’d love to continue the discussion in the comments section). We posted Part 1 of the series, a talk focused on business-model viability over time, on Monday, and Part 2 — on revenue-generation — yesterday.

In today’s pair of videos, Scott Lewis, CEO of Voice of San Diego, leads a discussion on the crucial topic of community engagement: how to leverage limited resources to build community, how to develop meaningful comments boards and conversations, how to use new technologies to develop audience affection, how to translate loyalty into money — and how to measure the murky issue of “audience engagement” in the first place. Scott’s introduction is above; the video below features a conversation among Knight’s panel of heavy-hitters.

Among them, in general order of appearance: the Center for Investigative Reporting’s Robert Rosenthal, Texas Tribune’s Evan Smith and Higinio Maycotte, The Bay Citizen’s Lisa Frazier, the St. Louis Beacon’s Nicole Hollway and Margaret Wolf Freivogel, the Chicago News Cooperative’s Peter Osnos, Voice of San Diego’s Buzz Woolley and Andrew Donohue, the New Haven Independent’s Paul Bass, the Gotham Gazette’s Gail Robinson, the FCC’s (and formerly Beliefnet’s) Steven Waldman, the Huffington Post Investigative Fund’s Nick Penniman, and Seattle CrossCut’s David Brewster.

Seeking Sustainability: Discussion on engagement and community-building session from Knight Foundation on Vimeo.

August 18 2010

16:30

Seeking Sustainability, Part 2: John Thornton and others on strategies for nonprofit revenue generation

This spring, the Knight Foundation hosted a roundtable discussion exploring a crucial issue in journalism: the sustainability of nonprofit news organizations. This week, we’re passing along some videos of the conversations that resulted (and, as always, we’d love to continue the discussion in the comments section). We posted Part 1 of the series, a talk focused on business-model viability over time, yesterday. And in today’s pair of videos, John Thornton, chairman of the excitement-inducing Texas Tribune, leads a discussion about a topic near and dear to the hearts of even, yes, nonprofit news outlets: revenue generation.

“It is nowhere in the mid-life venture capital playbook to start a nonprofit news organization,” Thornton noted; “and so none of us would be doing this if the central mission weren’t about public service.”

Thornton’s introduction is above; below is a discussion that it sparked among the nonprofit all-stars Knight brought together for the occasion — among them The Bay Citizen’s Lisa Frazier, the Chicago News Cooperative’s Jim O’Shea and Peter Osnos, the Texas Tribune’s Evan Smith, Voice of San Diego’s Scott Lewis, The Atlantic PhilanthropiesJack Rosenthal, Seattle CrossCut’s David Brewster, the New Haven Independent’s Paul Bass, California Watch’s Mark Katches, J-Lab’s Jan Schaffer, and the St. Louis Beacon’s Nicole Hollway. The group discussed finance-crucial issues like publicity, community, membership incentives, collaboration, demographic measurement, branding, corporate sponsorship, and more…not from a theoretical perspective, but from the point of view of practitioners who spend their days thinking about how to keep their organizations thriving.

The conversation, by the way, is well worth watching all the way to the end: The video closes with group members discussing some of their more outlandish — and, so, intriguing — ideas for revenue-generation.

August 17 2010

20:00

Seeking Sustainability, Part 1: Voice of San Diego’s Woolley and others on the role of the “venture mindset”

This spring, the Knight Foundation hosted a roundtable discussion exploring a crucial issue in journalism: sustaining nonprofit news organizations after an initial injection of funding gets them off the ground. The Seeking Sustainability conversation sought to examine nonprofit outfits not just as recipients of philanthropic funding, but also — and more so — as businesses that share many of the same concerns that their for-profit counterparts do.

“Traditional media companies have been particularly distressed by shifts in the markets and business models that historically supported them — and the conversation about how to ’save’ or ‘reinvent’ journalism has been largely focused on their concerns,” Knight noted in its summary of the roundtable. But

to a growing group of practitioners, funders and observers…the challenge is not saving traditional news organizations or traditional forms of journalism. The challenge is creating, strengthening and protecting informed communities and local information ecosystems, of which journalism is a necessary component.

Thus enters the nonprofit model, which allows organizations to pursue a journalistic mission without the competing demands of operating a for-profit business. Nonprofit news startups have been created in communities across the country, most with funding from major donors or foundations. The Knight Foundation alone has funded more than 200 experiments with what it calls a “build to learn” approach.

To benefit from the education those startups have been receiving, the foundation convened a group of experts to share practical insights about improving and sustaining nonprofit journalism. It also, thankfully, recorded the conversation that resulted. In a series this week, we’ll pass along the videos of those conversations (and, as always, we’d love to continue the discussion in the comments section).

In today’s first pair of videos, Buzz Woolley, chairman of Voice of San Diego, discusses the power of what he calls the “venture mindset” in journalism (above). In the second video (below), he is joined by an all-star panel of nonprofit startup leaders, including — in general order of appearance — J-Lab’s Jan Schaffer, the Chicago News Cooperative’s Peter Osnos and Jim O’Shea, the St. Louis Beacon’s Margaret Wolf Freivogel, Texas Tribune’s Evan Smith, Voice of San Diego’s Andrew Donohue and Scott Lewis, Knight president Alberto Ibargüen, the Center for Investigative Reporting’s Robert Rosenthal, the Connecticut Mirror’s James Cutie, The Bay Citizen’s Lisa Frazier, Oakland Local’s Susan Mernit, and the New Haven Independent’s Paul Bass.

December 14 2009

16:30

Are news nonprofits doomed to reliance on big gifts? A study in fundraising — and sustainability

I’ve been studying journalism nonprofits one way or another for about five years now, and I confess that in all that time, I’ve looked at their business models really as being slightly different iterations of the same species. But now, I’m not so sure.

As part of my graduate studies in nonprofit management at George Washington University, this fall I took a closer look at the finances of a dozen journalism nonprofits, keeping in mind the most pressing question for many: How can they diversify revenues and achieve some level of sustainability?

I acknowledge up front that my method was not perfect — I’ll explain at the end — but I think I’ve discovered what may be two critical distinctions within the group I studied.

First, the six nonprofits that served geographically defined communities — whether they be cities, states or regions — generally did a better job of diversifying their revenue sources than did those that attempted to speak to a national audience.

Second, among these “regionals,” there appeared to be some correlation between bigger budgets and greater diversity in revenues sources. This pattern suggested to me that there is a happy dynamic at work here — a virtuous cycle in which diversity of revenue helps create institutional heft that in turn attracts additional philanthropy in the form of major individual gifts and foundation grants.

What are the diverse sources that these nonprofits are tapping? For lack of a better descriptor, I lumped them together under the heading of “transactional” revenues — advertising, subscriptions, memberships, royalties, event ticket sales, contract research, and anything else that didn’t go under the “direct public support” line on Form 990. Some of these sources are taxable, some are not, and the difference was not always clear. Different nonprofits treated similar revenues in different ways. But I digress.

Regional news nonprofits: With size comes funding diversity

Here’s the graph that shows the correlation between average annual budget and a declining dependence on direct public support:

If this trend holds true, I think it would portend a relatively bright future for the nonprofit model as a major contributor in places like city halls and state capitals where newspaper bureaus have been emptied out. These are the places where the disintegration of the newspaper business model is most obvious to readers — and where for-profit alternatives have a hard time realizing returns on investment. Here, the case for philanthropy is clear — and so is a nonprofit’s potential to supplement its revenues with advertising and other market-driven revenues streams as it scales up its operations.

The trend also suggests a cruel and ironic corollary: The journalism nonprofits that can demonstrate the least dependence on foundations and large gifts may be the most likely to succeed in winning them.

National news nonprofits: Greater dependence on large gifts

At the same time, studying the finances of six “nationals” caused me to look at those organizations in a wholly different light.

Like the regionals, journalism nonprofits with national aspirations are feeling pressure to diversify their revenue base beyond foundations and founding donors. And at least some are looking to the regionals’ success for tactics they can replicate — witness ProPublica’s hiring of Watershed Co., a consultancy with expertise in online and grassroots fundraising. But from what I’ve seen, most depend on major gifts and foundation grants regardless of size. Here’s a graph showing average annual budget and dependence on direct public support:

As I reported here in September, Madeline Stanionis, Watershed’s CEO, pronounced herself “skeptical” of prospects for building a national network of small donors. As Stanionis said at the time, donors to political and other “citizen-powered” campaigns have been conditioned to believe that the candidate or institution that receives their donations will respond directly to their demands. But journalism does not — and should not — operate that way, she said. “I just think trying to force a journalistic endeavor into a hole created by these campaigns is not correct,” she said.

My suspicion is that the “nationals” also suffer from being one too many levels of abstraction from readers’ lives. Their reports, however compelling in their conclusions, don’t explain to the reader why city sewer rates are so high or why the state legislature just slashed school spending. As Mike Worth, my graduate advisor and GW’s former vice president for development, remarked: “The problem with the case (for philanthropy) is that it’s intellectual. Nobody ever died from lack of public journalism.” The latter might be debatable, but I think he’s got it right.

What’s the lesson here? I think there are two, either (or both) of which may be a blinding glimpse of the obvious.

First, the nationals have a solid track record of tapping foundation support and keeping it flowing over a long period. Here, I’m thinking of the Center for Public Integrity, which has relied almost exclusively on foundations and major gifts since Chuck Lewis founded it 20 years ago. Why tamper with success? The only real benefit from the time and effort required to build a grassroots network may be the added credibility of having to answer to an audience. This is doubly true for those such as CPI and ProPublica that specialize in investigative work and also claim to be nonpartisan and/or non-ideological.

The second lesson is that any effort to build a grassroots network at the national level is going to require a lot of refinement. There are simply too many competing news sources and too many requests for support. Breaking through all that background noise is an enormous challenge. Best of luck to those that try.

Except for Mother Jones

Now here’s the big exception to the rule: Mother Jones. Among the nationals, MoJo stood out in its time-tested ability to pull revenue from all kinds of sources — advertising, memberships, events and investment income. Steve Katz, the magazine’s chief fundraiser, tells me that the model is an outgrowth of a deliberate effort to define and serve a particular constituency.

In an email, Steve told me that MoJo has “worked mightily to make the case that you won’t find our kind of point of view anywhere else, and that our journalism is also rooted in a ‘value proposition’ a.k.a. a point of view a.k.a. a politics, and hence our journalism — which must stand on its own as professional grade work — is also about changing the world.”

I’ll buy that. But I also think that if you take Steve’s view to its ultimate conclusion in our current economic and technological environment, it points to a tough road ahead for news organizations trying to replicate the newspaper model of objectivity in the online world. The new national news organizations most likely to prosper are those that already have a built-in constituency — or a primary purpose other than producing journalism.

Here, I am thinking of David Westphal’s reporting on Human Rights Watch and its transformation from journalism source to journalism producer. As David noted in his recent testimony at the Federal Trade Commission: “A key point here is that not all of the new players are news organizations.” This trend raises important questions about governance and process within nonprofits — how they try (if they try at all) to insulate their news-gathering operations from their advocacy, much as newsrooms were separated from advertising departments at newspapers.

Where does it all go from here? In my view, the nonprofit model will shake out into two, three or maybe four discrete models, depending on reach and mission. Like cousins, at first glance, they’ll look somewhat alike and may get together once a year for reunions. But each will have its own distinct direction, habits, inclinations — and contributions to the public debate.

A note on the methodology: How’d I select the 12 nonprofits for my study? Frankly, it wasn’t very scientific; it was more an exercise in putting together a fact pattern. I began by listing the nonprofits I knew that (a) existed primarily to produce journalism and (b) had revenues of $100,000 or more a year, and 3) had filed their Form 990 tax returns someplace where I could find them online.

The list worked out to an even dozen, with six that I considered to be national in reach (ProPublica, Center for Public Integrity, Center for Investigative Reporting, Mother Jones, The Nation, Grist) and six that were primarily regional (Texas Observer, High Country News, MinnPost, Voice of San Diego, Chi-Town Daily News, New Haven Independent).

From there, I assembled all available revenue data from 2002 onward a developed an annual average for each nonprofit’s revenues and the percentage of revenues derived from “direct public support.” Then I plotted them on two graphs, one for regionals and the other for nationals.

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