Reloading an old business model for new media

Veteran journalist Tom Stites writes on the Nieman Blog that new digital media might be overlooking a venerable method of sustaining themselves -- the cooperative.

The cooperative is defined as a business organization owned and operated by a group of individuals for their mutual benefit. Today we might call it crowd-funding.

When the market fails

Stites says that people form cooperatives when the normal for-profit market forces fail to supply a service or product that their community needs.

There are many examples of user-owned news cooperatives in other countries but none in the U.S.
Stites is trying to launch one here.

Stites reviews recent studies of attempts to establish sustainable business models and concludes that many of the media currently held up as models depend too much on foundation support, which rarely is maintained over the long haul. In addition many of these operations depend on volunteer work, and volunteers burn out. There is thus an urgency to find a new model.

A hybrid model for local news

What is appealing about the cooperative model is that there are many news organizations already functioning. They can be replicated. They mix characteristics of for-profit and non-profit businesses and they can be tailored to the needs of the local community.

More than any other type of news, local community coverage has suffered in the recent downturn of the news industry. The co-op might help give it life again.


Related:
Robert Niles: How to Make Money Publishing Community News Online
How much to charge advertisers? As much as possible
More paywalls won't save journalists' jobs
Google takes magic out of advertising sales process
How I ran my newspaper monopoly
Language barrier helps publisher paywalls
How to tailor news for 4 different platforms? 'Responsive design' 

African news service thrives as cooperative

Justin Arenstein never really wanted to work for a big corporation, but that is how he started out in journalism. He was a reporter working on contract covering one of the desperately poor shantytowns of his native South Africa.

He and his colleagues ran afoul of corporate management by covering the death squads that were assassinating black activists opposed to apartheid. They quit en masse and decided to start their own news organization, which was the beginning of what is today the African Eye News Service.


African Eye functions as a cooperative, with each reporter keeping half of the revenue generated by his or her own stories and the rest going to support the enterprise. Launched 18 years ago, it has 15 full-time journalists and a network of correspondents covering six countries -- South Africa, Zimbabwe, Mozambique, Swaziland, Tanzania and Malawi. It has gained a reputation for editorial independence and aggressive investigative journalism.