Profits have disappeared. Survival is in question. So why don’t local news organizations just become nonprofits? It’s a question that’s been posed with increasing frequency in recent years, often in the wake of steep newsroom cuts.
Hundreds of independent online news sites operate as nonprofits. Public radio is an increasingly important and active part of local news ecosystems. The Philadelphia Inquirer is a for-profit daily newspaper now owned by a nonprofit. And a handful of similar newspaper ownership models have existed for years in places such as Manchester, N.H., Saint Petersburg, Fla., and New London, Conn.
Considering how many daily newspapers have been acquired by big, profit-driven corporate chains such as Gannett, GateHouse and Digital First Media, a widespread movement toward nonprofit status is unlikely.
But especially among independent local news outlets, a third way is emerging. You might call it the “mission-driven for-profit.”
The shift from advertising to reliance on reader revenue is forcing news organizations to articulate why individuals should purchase a digital subscription or membership. Unlike traditional print subscriptions—a more transactional purchase of a physical product, in which scarcity was a factor—getting people to pay for digital news can be mostly about convincing them that your work and mission are vital.
Some for-profit newsrooms are gaining reader revenue through voluntary paid membership programs, public radio-style, instead of via paywalls and subscriptions. For that to work, they really do have to walk and talk like a nonprofit—articulate the altruistic nature of their mission, be somewhat transparent about their finances, and engage with and be accountable to their readers (who include both paying members and potential members). (Read more…)