When government fails, 'business has to step up'

Businesses like to devote part of their marketing and public relations budget to promote how they are  giving back to society. We are not just about profits, they try to say. And the message is arguably true, not just propaganda, as far as it goes.

Fink, from BlackRock.com

But we are starting to hear a different kind of message from business people, and it goes like this:

"Around the world, frustration with years of stagnant wages, the effect of technology on jobs, and uncertainty about the future have fueled popular anger, nationalism, and xenophobia. In response, some of the world’s leading democracies have descended into wrenching political dysfunction, which has exacerbated, rather than quelled, this public frustration. Trust in multilateralism and official institutions is crumbling." -- Larry Fink,
(emphasis mine)

Business people will have to fill the gap left by polarized and paralyzed national governments: this is the message of Larry Fink, CEO of BlackRock, the world's largest mutual fund company. Businesses have to show that they have a higher purpose than just making money. And, by the way, it's in your own interest to do so, he says. BlackRock has used its position as a major shareholder of some companies to push for more socially conscious policies.

(More coverage of Fink's letter was in Bloomberg, Forbes, and Reuters, among others.)

Users will own the media: how journalism is evolving

Alfredo Triviño has worked largely behind the scenes on some of the biggest digital media projects for some of the biggest brands in the world. But you might not have heard of him.

Alfredo Triviño: users will own the media, in every sense

He spent seven years in senior management roles at News Corp., ultimately as director of innovation, where he worked on development of a pay model for digital journalism and on long-term editorial and commercial growth strategies. (He is a 1999 graduate of the University of Navarra School of Communication, where I teach.)

He was invited to give the closing keynote address last week to the annual conference of the Spanish Journalism Society (SEP, Sociedad Española de Periodística). He ruminated casually about trends he sees in the worlds of digital journalism and digital commerce, mixing some English terminology into his Spanish presentation. Among the shifts he sees:

A shift from journalism and commerce to journalism vs. commerce. That is, the two will operate in separate worlds. Journalism will depend on the support of user communities rather than advertising. Brands will create their own digital media rather than publishing their messages on TV, radio, and in print.

Versión en español

A shift from paid editorial (subscriptions) to shared ownership. By this Triviño meant that groups of users will form around a topic of shared interest--local news of a community, a social issue, or a shared cultural interest, for example. They will be active participants rather than passive consumers. They will interact with the journalists, suggest topics to editors, share their knowledge, create content, contribute money, and support the mission of the publication because they feel they are part of it and it speaks for them. "This is ours; we own it".

100 digital news startups in Latin America show paths to achieving sustainability

A new study of 100 digital news startups in Latin America by SembraMedia in partnership with Omidyar Network -- Inflection Point -- offers many clues to achieving the elusive goal of sustainability.

Extensive interviews with the founders -- 25 each from Argentina, Brazil, Colombia, and Mexico -- produced data that clarified the elements of successful business models and showed the best places to invest resources and training.

Janine Warner, co-founder of SembraMedia and an ICFJ Knight Fellow, directed the study, which was managed by her co-founder, Mijal Iastebner. (Disclosure: I participated in the study as an editor.) Among the insights:

• You don't need a lot of money to get started. 71% of the media in this study had startup capital of less than $10,000, but a tenth of those now generate at least $500,000 in revenues (p. 8). 
• Those that focus on business development do best. Those with at least one sales person reported median annual revenues of  $117,000; those with no sales staff had a median of $3,900 (p. 9).
• Women are playing a key role in development of new digital media in a region where men traditionally have held almost exclusive control of the industry: 62% of the 100 organizations  had at least one woman founder, and women represented 38% of the total founders of all the media (p. 41).  
• Differentiation is key. In terms of content, technology, distribution, or style, these media positioned themselves as offering something different from traditional media and independent of political or business interference. In some cases, they exposed the cozy relationships between big media, politicians, and business (p. 25). 
• Even a small organization can have big impact nationally and internationally. Although these organizations had median staff size of 13 employees, 72% have had their stories picked up by national news media in their home countries and 66% by international media (graphic above).

Versión en español

How digital media monetize their social capital

From GDJ's Clipart, Openclipart.org

Lately I have been reading a lot about a new way of valuing media that would benefit entrepreneurial journalism ventures, which nearly always lack capital to launch and sustain themselves.

Sociologists and economists have been writing about it for years -- social capital -- and I am embarrassed to say that I have just started learning about it. 

Social capital is a value that media entrepreneurs possess through their ethnic, social, professional, and business networks. It is also a value that they create through their work's impact on society. Below I will show how three entrepreneurs are making it work, in France, Holland, and Spain.

Versión en español

Hard to value

Investors, the public, and the media entrepreneurs themselves have tended to undervalue their work because it is hard to place a value on their social capital. By contrast, it is easy to value a publication through the advertising and subscription revenue it generates and the capital assets it owns. 

12 road maps for sustainable digital media worldwide

Renaissance maps showed monsters, hazards to avoid.

The future of journalism is increasingly digital, mobile, and in flux. It is unexplored territory. 

Like the explorers and navigators of the Renaissance, various organizations – governments, NGOs, journalism groups, and universities, among others – have been trying to map the most promising routes to sustainability in the new media ecosystem. 

It's not just about making money; it's about providing news and information crucial to a democratic society. 

Versión en español 

(At left, a map from Chet Van Duzer's book Sea Monsters on Medieval and Renaissance Maps. Click to enlarge.)

As traditional news media organizations have lost revenues, laid off employees, and reduced coverage, new digital media have emerged as important players in providing public-service journalism, especially on the local level.

Databases and promising routes

Researchers from a variety of organizations have created databases of thousands of new digital media to study best practices and find new models for sustainability. Below are the 12 studies that I have found useful, mostly taken from a paper I presented at the World Media Economics and Management Conference May 5 at Fordham University in New York City.

On 5 continents, thousands of digital media startups

Versión en español.

As traditional media organizations cut back on staff and coverage, thousands of new digital media are popping up all over the world to fill the gaps.

I've compiled 14 lists of startups below. Some startups are included on more than one list. Can you think of any lists that I've left out?

Many of the organizations that compile lists also share tutorials, especially on revenue-generating models, to help others launch and sustain their news sites. Sustainability is the Holy Grail. Part of the reason digital media are springing up is because of the gaps left by cuts in coverage and staff at major media (graphic below, from Mark J. Perry's Carpe Diem blog via Clay Shirky's Medium post, "Last Call").

Mark J. Perry's graphic shows newspaper decline. A digital opportunity?

United States

1. The Pew Center has done a study of 178 nonprofit journalism websites with a detailed breakdown of their business models, "Nonprofit Journalism: A Growing but Fragile Part of the U.S. News System."

Gigaom followed up with an analysis of the study, and the Knight Foundation sponsored a roundtable discussion on the topic, with videos of the sessions.