9 Apr 2017

Persuading people to pay more for news

From Mediawatch, 9:09 am on 9 April 2017

The advertising that has covered the cost of journalism in the past is drifting away from the news media. Readers who value it must be prepared to pay more to secure its future. Mediawatch asks two local online entrepreneurs if crowdfunding is the answer.

Jacqui Park, chief executive of the Walkley Foundation.

Jacqui Park, chief executive of the Walkley Foundation. Photo: RNZ

"How do we make a living from the business of journalism when it's under so much pressure and the traditional answer - advertising - is accelerating the decline?" keynote speaker Jacqui Park asked the journalists and media executives gathered at Parliament last week

The 'Journalism Still Matters' summit was a follow-up to an event held ten years earlier.

In the years since 2007, digital platforms like Facebook and Google have taken over much the distribution of news online - along with the income from advertising.

"It's become decoupled from news and those platforms are mopping it up," said Jacqui Park, CEO of The Walkley Foundation, an organisation that supports and promotes journalism in Australia.  

The other major problem is new generations accustomed to news online for free. 

She quoted the former Guardian and New York Times digital editor Aaron Pilhofer

"Millennials wouldn't read a newspaper if you paid them, let alone asking them to pay for the privilege". 

"Some news sites (in Australia) have put a paywall up and that's a shift to getting revenue from the readers. It sends the message that this is quality information. It takes time and effort to produce and someone has to pay for it," she told Mediawatch.

"More importantly, it's building an understanding of why it's essential to our civic life that we have this information and that we do pay for it,' she said.    

The wisdom of the crowd  - and their wallets

The Walkley Foundation is putting some money where its mouth is with an innovation fund which backs new journalism projects.

Startups here in New Zealand can apply too. One which has had a crack at it is Press Patron, a newly-launched platform which makes it easy for online readers to make financial contributions - on either a monthly or one-off basis - to online publishers.

Press Patron's Alex Clark and Scoop's Joe Cederwall at RNZ.

Press Patron's Alex Clark and Scoop's Joe Cederwall at RNZ. Photo: RNZ / Jeremy Rose

Press Patron's “Become a Supporter” buttons can be seen on partner sites including Public Address, the recently launched Newsroom.co.nz and performing arts site Theatreview. Maori and Pasifika website E Tangata and science website Sciblogs will launch campaigns on Press Patron soon.

The crowdfunding platform grew out of founder and CEO Alex Clark's research into what New Zealanders are willing to pay for.

Press Patron's Alex Clark speaking at the Journalism Still Matters Summit in Parliament.

Press Patron's Alex Clark speaking at the Journalism Still Matters Summit in Parliament. Photo: RNZ / Jeremy Rose

"Voluntary subscription is going to have a higher uptake than paywalls," he insists.

"Not everybody will sign up, but the forecasting and modelling that we've done  - and the actual data that we're now starting to generate  - shows that the revenue from this could exceed the revenue from online advertising quite quickly," Alex Clark told Mediawatch 

"We can exceed that as we raise awareness of the crisis journalism is going through," Alex Clark says.

But at the 'Journalism Still Matters' summit, editors from the publishers of New Zealand's most-visited news websites  - stuff.co.nz and nzherald.co.nz - confirmed that both companies have scrapped plans for paywalls. New Zealanders can expect professionally-produced news for the foreseeable future without having to pay at all.  

Will the pool of people willing to donate voluntarily be too tiny for a reliable stream of income to media organisations?

This is the pitch newsroom.co.nz readers see if they click on Press Patron's to "become a supporter" button.

This is the pitch newsroom.co.nz readers see if they click on Press Patron's to "become a supporter" button. Photo: screenshot

"It doesn't follow traditional economic modelling, but people are willing to pay because they care about journalism,' he says.  

"We find 70 per cent of contributors are signing up for monthly recurring contributions. They are paying $12 per month on average. One time contributions are larger . . and the overall average is $55," he says.

Alex Clark told Mediawatch he hopes established and mainstream media organisations and independent ones will use Press Patron, as well as individual journalists. Tech writer Bill Bennett was the first one-man-band on board. 

"Crowdfunding is very low risk. If mainstream outlets focus on their strong investigative journalism I think they'll find there is a subset of their audience loyal to that quality content and willing to support an expansion of it," he says.

Scooping up goodwill - and cash

The news and opinion website scoop.co.nz is launching a campaign on the Press Patron platform soon, but it has already run its own crowdfunding campaigns and raised over $100,000.

The Scoop Foundation funded an in-depth series by Alison McCulloch on postnatal depression in New Zealand, and awarded grants to two former RNZ journalists for "earthquake-related public interest journalism."  

Currently Scoop is in the middle of a new campaign to raise $30,000 to cover the upcoming election.

"We're halfway to the target. The money's being raised to engage professional freelancers to cover five key election issues which have also been crowd-sourced by our community," Scoop’s interim co-editor Joe Cederwall told Mediawatch.

He says Scoop uses crowdfunding alongside its "ethical paywall" for which corporate and institutional heavy users of scoop.co.nz are asked to pay a licence fee, but individuals are not. 

If Scoop has successfully crowdfunded on its own so far, does it need a platform like Press Patron?

"After 17 years, we have a lot of goodwill and supporters but I don't think it could be a sustainable solution for other organisations," says Joe Cederwall.

"There is a limited number of people with the financial freedom to do this. Things like Press Patron could offer a regular and consistent income, rather than one-off bursts of energy," he says.