The Social Media Challenge
B.C. is becoming an incubator for emerging forms of journalism. From NowPublic, one of the largest participatory news networks worldwide, to independent online news sites such as TheTyee.ca, Vancouver-based companies are finding new ways to communicate with audiences in a digital environment. The big question is, who will pay for the content?
This isn’t a new issue. News has been a loss leader since the early days of printed leaflets and the party press. It has not been the economic driver of any of the media industries that it defines, largely relying on advertising revenue to pay its way. Some media economists believe that the current economic model, based on delivering mass audiences to advertisers, is failing. Fragmenting audiences, new competitors, technological change and declining revenue are reframing possible business models.
Two Vancouver-based companies suggest future business models for journalism. Take TheTyee.ca, which was founded five years ago as a for-profit online news startup, funded mostly by local labour-affiliated venture capital and more recently by an angel investor. The site has built a dedicated readership through news and information content targeted at an underserved regional audience defined largely by its political leanings.
To pay for its journalism, the site uses a combination of limited advertising revenue and venture philanthropy. Its hybrid model includes a for-profit firm and a non-profit arm that manages audience charitable donations through a fellowship program to support some of its large journalism projects.
The second company is NowPublic, a for-profit participatory media firm also seeded with venture capital, which produces its content online. NowPublic relies on unpaid citizens, not journalists, to provide content on global issues. This crowd-sourced information is then made available on its website and can be sold to other mainstream media players. NowPublic has been in business for almost three years and defines itself as “pre-revenue.” It provides limited advertising on its website and relies on content-sharing models with conventional media for revenue.
These organizations both face challenging economic roads. Online advertising on average generates one-tenth – or less – of the revenue of a conventional media ad, and it remains to be seen how much conventional media are prepared to pay for social media content as a service. They can get user information for free on their websites or create their own aggregation tools. However, the fact that most conventional media seem to be missing the ability to think like digital media players may make it worth their while to buy these kinds of services.
NowPublic believes that its value proposition lies in building up its user base and inventory of information tools. But simply ripening yourself for takeover still leaves the question up in the air of who is going to pay for the crowd-sourced content. If news continues to be seen as a commodity with limited value, who is going to provide citizens with quality information about important issues to democracy? The current mass-audience business model shapes journalism and news production in particular ways. A number of research institutes have been launched in the U.S. to look at the potential of hybrid economic models, digital media and journalism. We need to do the same here in B.C.
Finding new ways to pay for journalism is an issue for policy makers, news organizations and citizens concerned about maintaining a thriving media environment. Of course, in Canada, it is important to acknowledge that we also have a public broadcaster, the CBC. But if news continues to be seen as a commodity with limited value, who is going to provide citizens with quality information about important issues to democracy?
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