Can journalism survive without advertising revenue?

SHARE   |   Sunday, 13 July 2014   |   By Thomas T. Nkhoma

New forms of financing journalism are slowly emerging somewhere in the world. These new forms called crowdfunding and the cooperative model have part of their roots in Germany and my observation is that they look set to spread to the rest of the world.

The first newspaper to survive using this new form of funding, at least that I am aware of, is the taz.die tageszeitung newspaper in Berlin which I have had the privilege to visit and interact with its long time editor, Mathias Broeckers.

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The taz as it is commonly called has adopted the cooperative model and Broeckers, believes that his news organization is testimony that journalism can survive independent of advertising revenue. Thus, the taz is run as a cooperative society, a model they adopted since 1992. Such a model, he says, is relatively good for press freedom and media independence.

Traditionally, we all know that more than 95 per cent of newspapers depend entirely on advertising revenue for their survival which to some extent curtails their freedom and independence as advertisers inherently hold the purse and call the shots.

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Conversely, with a print run of more than 75 000 copies per day and a wide online presence, the taz boasts more than 12 500 cooperative society members who continue to secure the newspaper’s independence with a total of 11.6 million euros through a cooperative society.

The model works in such way that cooperative members make donations to the society to run the newspaper while advertising revenue constitutes only 20 per cent. Profit is the least of their concerns because the idea is not to derive any financial benefits from the newspaper. The newspaper also has about 45 000 subscribers besides 5000 who subscribe online for the e-paper.

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The initiative to run the newspaper as a cooperative society was borne out of members’ desire to have a paper they could truly call free and independent. This is because they believe newspapers that depend on advertising revenue or are run as companies invariably enjoy less freedom and independence from their major advertisers or sponsors. Otherwise they risk losing the revenue and eventually collapsing if they went against their sponsors.

Broeckers believes the taz model can be replicated anywhere in the world to guard against media freedom continuing to be an expensive and heavily commercialized commodity.

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Unlike the cooperative society model where members own the newspaper and fund it from their pockets, currently news organisations are run as companies with shareholders who expect huge profit margins at the end.

Meanwhile, another model that seems to be coming up is crowdfunding. The Krautreporter (German for crowd reporter) brings yet another dimension to investigative journalism. A colleague I met last year in Germany is reported to have collected one million Euros to start an online magazine with 20 colleagues. 

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“That is quite a sensation, as it is the highest amount ever collected for a journalism project in Germany through crowdfunding,” says Joachim Vogele, a trainer in multi-media and online journalism. Krautreporter claims will produce independent quality journalism (no ads, no sponsoring) without exploiting journalists and 15 000 supporters are said to have bought the idea and donated 60 Euro each.

To the uninitiated, crowdfunding is the practice of funding a project or venture by raising many small amounts of money from a large number of people typically via the internet. Musicians, film makers and artists elsewhere have successfully raised funds and fostered awareness through this model.

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Krautreporter – Goodbye Doomsday Headlines, Cats and Tits – says using the power of the crowd is a promising response to the challenges for investigative journalism posed by the digital transformation. Its concept is strongly inspired by De Correspondent, a Dutch crowd-financed and community-driven online magazine. “Building on this approach, Krautreporter envisions an online magazine that escapes the old limits of bricks and mortar journalism and ensures high-quality journalism on the Internet,” says the online magazine. 

According to the Krauts, neither advertisement nor paywalls but a subscription model should finance the daily online magazine.

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Unlike the familiar subscription business model, Krautreporter plans no restrictions to its published content. Everyone can read the magazine without needing to hide the free ride. 

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In return for the subscription, members can enjoy Krautreports as stakeholders. They become part of a collaborative content process, review content and influence the product before publication – a degree of involvement that goes far beyond of what traditional journalism offers its readers. 



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