Who Will Pay for It? The Conundrum for Journalism

I’m gearing up to teach a course this Fall in the Business and Future of Journalism at the Cronkite School, where there is a renowned Digital Media Entrepreneurship program run by Dan Gillmor, formerly of the San Jose Mercury News, and a New Media Innovation Lab headed by former BET interactive content manager and Washington Post staffer Retha Hill. The biggest question about the future of journalism for the past decade has been “who will pay.” Nothing has changed. Stellar sites like the New York TImes and the Economist have been successful with paywalls, and the Wall Street Journal has been living on subscription revenue for at least fifteen years, but there

In startup land, where I operate, when you find a way to get customers to pay for your service, it is known as the product-market-fit, or the business model.

Journalism’s tried and true business model was always advertising. That model has been disrupted for reasons I won’t go into here. It’s enough to say that when any startup team comes to me with a business model based on advertising, I laugh in their faces. Advertising is an impossible business model for an online business these days. It takes too many site visitors and takes too long to produce a reliable revenue stream.

So one of the people I’ve asked to guest speak at the class is Hamid Shojaee of Scottsdale-based software company Axosoft. Hamid is a startup junkie; after Axosoft got on a firm footing, he started AZDisruptors, an incubator program out of Axosoft’s Scottsdale offices. But AZDisruptors had a problem: at its pitch days, it didn’t see good enough startup teams.

So Hamid went one step further and started a blog to cover the local tech startup scene; it’s called AZTechBeat. AZTechBeat covers the startups the Business Journal doesn’t cover, because they are too early to make “news.” But they are important; they’re part of the ecosystem and they should be surfaced so they can build teams and perhaps get customers and funding.

Which leads me back to the future of journalism. I don’t believe the Business Journal’s type of reporting will ever go away; it is very necessary.Not every company is a startup, and the number of companies covered by the Business Journal is huge; Arizona is built on small businesses, many of whom have been in the Valley for fifty years. And they aren’t tech businesses.

But there is an increasing place in the future for the kind of local discovery in a specific niche that a blog like AZTechBeat can provide. I’ve seen how successful it can be in the Bay Area, and how it helps the startup culture grow. As I understand the model, some of its writers are being paid a bit, and some are volunteers looking to build their portfolios as journalists. It’s all good!

There were several other digital journalism startups in the Valley, the most notable of which was the Arizona Guardian, which went dark earlier this summer after existing for three years. It covered the Arizona legislature, and existed through a combination of subscription revenue and advertising. In retrospect, its niche appeared a bit too small and specialized, although we all had high hopes for it as a new model for journalism.

So perhaps the future of local, niche journalism will lie in “patronage,” or the support of a site by a strategic partner who needs good journalism for indirect reasons.


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