News entrepreneurs share lessons and a view of the future

Illustration by I Wayan Kerta, CC BY-SA 4.0

By Ellen Clegg

Keeping community journalism alive means defining precisely what it means to be local, Lillian Ruiz, co-founder and managing director of the nonprofit National Trust for Local News, told an online audience last week at a Shorenstein Center webinar

“As long as we can get that initial understanding of the local partner, the local infrastructure, the local information, and marry that with our pretty technical but also spiritual understanding of these spaces,” Ruiz said, “we can really come up with some interesting financial solutions—and some business solutions and operational solutions—that we hope over time will make sure some of the small publishers can invest their time, their energy, in initiatives and not necessarily survival.” 

The webinar was remote, as many things still are on the backside of the pandemic, but each Zoom square was occupied by an entrepreneur with a penchant for fresh thinking about sustainable business models for covering local news. Sponsored by the Shorenstein Center on Media, Politics and Public Policy at Harvard University, the panel, entitled “Reinventing Sustainable Business Revenue Models for Journalism,” stood out for any number of reasons. For one thing, it was made up entirely of women and it was moderated by a woman. And each speaker was a founder or leader of a nonprofit news outlet or philanthropic initiative busy carving out a future for local news 

The panel included Sue Cross, CEO of the Institute for Nonprofit News, a network of more than 360 independent news organizations; Lauren Gustus, executive editor of The Salt Lake Tribune, the only metropolitan daily to transition to a nonprofit; Tracie Powell, founder of  The Pivot Fund, a philanthropic venture capital organization committed to supporting founders of color; Ruiz, whose National Trust for Local News worked to keep The Colorado Sun and other newsrooms under local ownership; Michelle Srbinovich, vice president for portfolio success at the American Journalism Project, a philanthropic venture capital firm that has raised more than $86 million to invest in local journalism; and Mary Walter-Brown, founder and CEO of the News Revenue Hub, a nonprofit founded to help digital news organizations build sustainable revenue streams through membership and audience engagement. The panel was moderated by Jennifer Preston, a senior fellow at the Shorenstein Center’s Technology and Social Change Project, former vice president for journalism at the John S. and James L. Knight Program and a former New York Times editor. 

During the panel discussion, Ruiz reflected on experience that grew out of the formation of the Colorado News Conservancy, a year-old collaboration by the National Trust  and The Colorado Sun. The conservancy, a public benefit corporation jointly owned by the National Trust and the Sun, last year acquired a family-owned group of 24 weekly and monthly newspapers in the Denver suburbs. My colleague, Dan Kennedy, wrote about the acquisition last June in his Media Nation column, noting that The Colorado Sun itself rose from the ashes of The Denver Post, now owned by the Alden Global Capital hedge fund.

The National Trust, Ruiz explained, looks for opportunities for impact investing in order to achieve social good. The local news crisis seemed like a natural target. “Ultimately, my co-founders and I, we came together because we saw a really similar need and a similar concern, which is that the US is losing far too many small and midsize community newspapers of all types,” she said. “These community-focused news organizations, they have longstanding trust and value, yet they are most in danger of being out of the loop on so many of these incredible resources and opportunities that exist.” 

Colorado made a great test lab, Ruiz said, because there was a strong local operating partner up and running in The Sun, which launched in 2018. “I had worked with them in the past,” she noted, “and I had a sense that this would be a good fit with their mission and their strategy and how they viewed the information landscape and the news landscape across Colorado. That was a huge ‘luck be a lady’ factor for us.”

The National Trust, she said, is very much focused on “iterating the answer” to an overarching question: “How do we mobilize and deploy community-focused financing and impact capital and how do we take those financing opportunities and capital opportunities and combine them with state-level support and partnership? Because those pieces together, the capital approaches, and the state-level support and partnership, are really what are going to build the enduring infrastructure that strengthens community news and preserves local ownership.”

While nonprofit ownership is verging on becoming a commonplace strategy for news startups, Ruiz discussed another potential route to innovation that is much harder to grasp: blockchain. From 2017 to 2019, Ruiz was a co-founder and chief operating officer at the Civil Media Company and the Civil Foundation, a nonprofit public charity “committed to the sustainability of trustworthy journalism around the world, founded on the principle that a free press is essential to a fair and just society,” according to her LinkedIn page. 

In its relatively short lifespan, Civil got a lot of media attention—goodbad, and meh. The Civil experiment had promise at the start. Founder Matthew Iles told Mathew Ingram of Columbia Journalism Review that he believed the only way to rectify the secular decline of the news industry was “to come up with something radical and fundamental,” to “design something where mission and business model are in alignment and in service of the mission of journalism.” Iles envisioned an open platform run by and for journalists, governed by members who invested in cryptocurrency tokens, with a constitution laying out standards and practices and a Civil Council of experienced digital news veterans who would uphold the founding principles and rule on community decisions about direction and coverage. The community, or audience, could presumably be empowered to weigh in on coverage by using cryptocurrency tokens to reward writers.

In fact, Vivian Schiller, a digital pioneer at The New York Times and NPR, was brought on as president of the Civil Foundation (she is now at The Aspen Institute). Civil awarded 14 organizations that signed up to be members grants of $1 million. But Civil’s bold idea foundered on economic realities: The blockchain investment bubble burst in 2018, and the tokens that Civil awarded journalists as part of their compensation never gained market value. Some journalists told NiemanLab’s Joshua Benton that they had to borrow money just to pay rent because the token-based salary model collapsed. And one of Civil’s core ideas, where the community of token-holders could appeal coverage decisions to the Civil Council, seems potentially problematic in an era of polarization.

Isles, the founder, told Poynter analyst Rick Edmonds in 2020 that he still believes a self-governing decentralized protocol—one that essentially uses cryptography to guard against hacking into original images and fact-based reporting—still holds merit. But the way forward— for journalism, at least—seems somewhat opaque. 

Indeed, while blockchain is hard for the average layperson to understand (and this primer from NPR is a good place to start), the terrain resembles the early, open-source days of the web, before commercialized browsers and apps and fast internet connections unleashed a flood of content and a later rise of corporate hegemons like Microsoft, Google and Apple. 

As Ruiz explained during the webinar, “We were extraordinarily early in the blockchain space. We started researching the project in 2016 and started rolling it out in 2017, and I think we could have communicated much more clearly … that blockchain is the underlying protocol. It’s what you build on top…” that’s relevant. It was, she said, “almost like a Substack model before there was Substack.” The founders were thinking “about how we could use it for creating more direct and clear relationships between readers and specific journalists. [About] how you could use payments on the blockchain to underwrite certain types of work. I think that’s going to continue to be the opportunity of blockchain, and I don’t think anyone has cracked it.” 

Researchers for the Starling Lab for Data Integrity at Stanford University are just setting out to analyze how blockchain technology can protect the veracity of information in three fields: history, law and journalism. Rebecca MacKinnon, a former CNN bureau chief in China and Japan and a digital policy scholar, did a stint as a journalism fellow last summer and began to frame what next steps might look like for an ethical framework governing a decentralized internet, sometimes called Web3. She shared a cautionary note: “To most proponents, the decentralized web offers an exciting opportunity to hit the reset button on many things that went wrong with Web 2.0. While it promises many novel innovations, Web3’s grandest ambitions sound eerily familiar. The Web3 world has adopted a narrative that proclaims it will not only provide a new economy but also set a new course for human freedom. Without an ounce of cynicism, I can say I’ve heard this story before.”

In the end, Ruiz counseled, journalism entrepreneurs should continue to experiment, in order to “open up really interesting spaces and places where we can rebuild or just completely override the things that were built for us on Web2 that no longer serve us.”

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