Serious But Defintely Not Hopeless

Devising a Business Model for Journalism

Read all about it! The American Journalism Project

******************

The documentary Becoming Katharine Graham portrays her reign as publisher of the Washington Post with all the distinction it deserves, especially impressive as the Post in the Jeff Bezos era seems so troubled. (The film is on Amazon Prime, and I was told that Bezos said he had watched it and found it inspiring.)

Many years ago, I heard Graham, in a speech extolling the newspaper’s strength, assert, “The Washington Post is Woodward and Bernstein” the great Watergate duo. Also, she said, it is “Woodward and Lothrop,” a major downtown Washington department store and a major advertiser, which was liquidated in 1995.

That summarizes what has happened to journalism in the twenty-first century. The pillars of what paid for news gathering and presentation in the heyday of print — display advertising and the classifieds — were essentially demolished and nothing comparable as a revenue source has yet to be devised.

For the Post, which was so dominant in the Washington market, the collapse was devastating — highlighting the irony of Katharine Graham’s insight in better times.

But if you are anywhere in the media world, the impact of lost print advertising is completely obvious — which doesn’t mean it is widely understood.

Around 2000, I was told by the publisher of the New York Times that the company had reached a billion dollars of annual revenue. Three quarters of that came from print advertising and the balance mainly from subscriptions, he said. Today the equation has been more than reversed — it is the readers who pay for the bundle of news, cooking, puzzles, and sports at the Times. Subscription revenue provides the overwhelming part of what in 2024 was $2.6 billion in revenue.

The reinvention of economics for something as central to our lives as the media — from micro providers to corporate behemoths — is a civilization-scale change. The consequences are, not surprisingly, incalculable.

The number of print subscribers to major newspapers is a fraction of what it was: the Boston Globe has fifty thousand, the Dallas Morning News has forty-five thousand, and the Denver Post has under thirty thousand, according to a list on the website Mediagazer. I’m guessing print news will always be available as a pricey premium for legacy publications that are now primarily digital. (The New Yorker and The Economist are among the most prominent media organizations holding on to substantial print readership.)

And the digital for-profit sector is now larger than perhaps people realize, including Politico and Axios and specialty sites like The Information, along with Substack, the aggregator of newsletters that come with a subscription option. Others have come and largely gone, Vice being among the most memorable.

Such is the nature of business. Journalism is an essential component of democracy and also a commodity.

As advertising-supported small and medium-size print newspapers have been depleted or have vanished, a new model has emerged. It is in the nonprofit media realm, particularly at what is usually described as “local” or “accountability” journalism, where the activity is the most innovative.

Philanthropy is a major source of support for emerging enterprises. Press Forward, a consortium of foundations, has committed $500 million to nonprofit news. The American Journalism Project is acknowledged as the leader of the field, investing, mentoring, and evaluating the resurrection. I asked Sarabeth Berman, the CEO of AJP (and I am proud to say, my daughter-in-law), to give me her assessment of how well the process is going. Here is her response:

We’re seeing nonprofit news organizations grow and find sustainability, produce vital journalism and thrive in their markets. With the right support, diversified, renewable revenue is within reach.

To give you a sense of what this looks like in practice: In January 2022, we gave Block Club Chicago a $1.6 million grant when they were a $1.9 million organization. They used our support to invest in their business team and digital revenue strategies, and by the end of 2023, had grown into a $3.5 million organization with stronger membership (8.3% growth), revenue from foundations (200% growth) and earned revenue streams (192% growth).

Similarly, Spotlight PA has grown from a $1.7 million organization in 2021 to a $4 million organization; by the end of 2023, they had grown their membership by 71%, earned revenue by 466%, support from major donors by 18% and philanthropic support by 90%.

While not underestimating what philanthropy and the support of billionaires can mean, capricious as that tends to be, I think it is not yet the case that an all-inclusive replicable model exists for a mix of subscriptions, events, sponsorships, and donations to equal what advertising had so long provided. We will be encountering successes and failures as the enterprises reach inflection points of substainability. What matters are the trends.

Gara LaMarche, a former president of The Atlantic Philanthropies and a major figure in civil society for decades, wrote a widely read piece on the subject in March titled “Overreliance on Foundations Is Unhealthy. Foundations Can Help Fix That”in which he argues that matching large donations with smaller ones from members (or, in the case of news outlets, readers) to establish a continuing revenue flow, can move a nonprofit organization beyond the need to regularly renew grants.

The clearly defined lanes of news and advertising (“church and state” was the shorthand) that prevailed in the twentieth century is being replaced. The reinvention will prevail over time because there is so much effort and innovative talent being deployed to make it succeed and because it is so important.