Monday, November 28, 2016

If you don't have money, use social capital

Image from MCMcapital.com
Digital media entrepreneurs often lack the financial capital and business savvy to launch and sustain a high-quality news operation.

They could improve their reach, impact, and sustainability if they knew how to harness social capital in the form of partnerships with universities, broadcasters, foundations, for-profits, and nonprofit organizations.

Most digital media startups have trouble raising financial capital. They can't get loans because they don't have anything to pledge as collateral other than their personal home and auto. They can't get investors interested because they lack a business model with a promise of profit.

 What is their social capital?
  • A veteran journalist has a reputation in the community as a trusted source of information. Their name is their brand with readers and potential sponsors.
  • They may have a relationship with a university where they have occasionally lectured or even taught entire courses. A university could provide volunteer labor, equipment, and even broadcasting facilities for a startup. The startup would be a teaching laboratory for students.
  • A journalist may have been a contributor to a  radio or television broadcast outlet that would partner to produce and distribute news and information.
  • A journalist's social media presence -- Twitter, Facebook, Instagram, Snapchat, etc. -- represents a community built around a personal brand. And this social capital could also be converted into financial capital -- sponsorships, subscriptions, other sales. 
The need

Communities around the world have lost accountability journalism as a result of digital disruption and the global financial crisis. Often, laid-off journalists have tried to replace the lost coverage by launching their own digital media.

Also: How digital media monetize their "social capital"

The vast majority of digital news startups are barely surviving. They lack people trained in business, technology, and multimedia production, as I chronicled in a recent paper.

Many of their weaknesses might be offset by partnering with organizations that could provide expertise, access to equipment and facilities, and manpower.

In exchange, a news startup could offer partners the opportunity to participate in a high-impact community service project, namely informing the public about topics that matter to them.

Research: case studies

I am planning to produce case studies of successful partnerships because real-world examples are one of the best ways to transfer knowledge effectively. (Know of any? Let me know at @jamesbreiner.)

Journalism today is becoming less of a business and more of a public service, but it is a public service that has to be profitable, as Ignacio Escolar, founder of Eldiario.es in Spain, has so eloquently put it. It is this transformation of journalism organizations into a hybrid of community assets and business assets that I want to help accelerate.

Related:

Loyal users will pay for watchdog journalism  
Panama Papers: Lone-wolf investigative journalists form a pack

at Posted by James Breiner
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