Is open journalism commercially viable?

There are one important question that remains unanswered in our research: is open journalism commercially viable?

As readers, advertisers, and the revenue that they bring leave newspapers for the internet, many news outlets are cutting back on reporters. The reporters that remain are constantly being asked to do more with less. With less reporters on the ground, and less money flowing into news rooms, what can be done to ensure that quality reporting is being produced. This is one of the great problems facing journalism today and, along with the issues of trust and authority that I have already mentioned, is what leads us to discussing new models for journalism.

In conceptualising a new model for journalism, the new model needs to satisfactorily address these two problems: does the new model of journalism solve the fading public trust in journalism and is it financial viable?

Our research is concerned with open journalism; so is open journalism as we have identified it commercially viable?

In 2009 Media Watch discussed News Limited’s plan to build a “paywall” for their online content, which only now in 2012 is being implemented in Australia. Rupert Murdoch’s view was that quality journalism costs money to produces and that consumers who wanted access to quality journalism would need to pay. Murdoch also leaves little doubt about his views on bloggers and news aggregation services:

The Philistine phase of the digital age is almost over. The aggregators and the plagiarists will soon have to pay a price for the co-opting of our content.

In Murdoch’s view bloggers are not content creators on a equal footing as journalists, they are plagiarists who copy and comment on stories that “real” journalists uncover. This signifies a broader adversarial relationship between bloggers and journalists that, I believe, runs right though Murdoch’s newspapers. The relationship between bloggers and journalists warrants a post of its own, but Mark Scott, Managing Director of the ABC noted:

It strikes me as a classic play of old empire, of empire in decline. Believing that because you once controlled the world you can continue to do so, because you once set the rules, you can do so again.

I think Scott has identified one of the major problems that newspapers face in attempting to build a paywall around their content; news organisation (or journalists) no longer have control over the dissemination of information, and they are never getting it back. I don’t think there was any way that they would have been able to hold on to control in this environment. In a follow up interview with Jonathan Holmes, Scott goes on to say:

the reality of the circumstance that we all find ourselves in as media organisations: the audience has the power now. And in a sense you have to engage with those audiences on the audiences’ terms. Now for 15 years people have got their content online free of charge. You have younger people who have never paid for anything online. And you can’t just say snap your fingers and expect that they will pay – particularly if there’s going to be so much content out there that is available free of charge.

If news is free elsewhere, what would motivate a user to pay for it from a news organisation, especially when the research tells us that they don’t trust news organisations? If news and information is being provided for free is there any model for news that can be commercially viable? James Murdoch argues that the biggest threat for comercial news is state sponsored news from organisations such as the ABC in Australia and the BBC in the UK. Public broadcasters are increasingly operating in the same space as comercial outlets, but I think James Murdoch is underselling the complexity of the online environment and placing undue blame for his company’s commercial worries at the feet of publicly funded news.

If news and information can be shared for free on the internet, do we even need professional journalists? Can citizen journalism adequately inform the public without professional journalism on the scale that we have come to expect? This may seem a silly question, but unless an model that makes news profitable can be found, the answers to that question may be more than a mere hypothetical. If we are going to look at a new model of journalism, I believe that we need to first aim for self sufficiency: that is, it can pay for itself and survive in the current marketplace. Public broadcasters have an obligation to be open with their audience and transparent in the way that they produce their news. In Australia the ABC is making great strides to leading the way in audience engagement with projects such as The Drum, ABC Open and Pool. (As an aside here, it is worth nothing that since the real innovation in this space is coming from public broadcasters, we should challenge the generally accepted economic orthodoxy that competition leads to greater innovation and efficiency, but I digress). It is generally accepted that more diversity in the media space will lead to greater outcomes in terms of democratic representation and public discourse; but what constitutes diversity of media voices? Is it multiple commercial news organisations, or would one publicly funded news organisation that facilitates a platform open to many individual voices fulfil the requirement for a diversity of voices? Can comercial open platforms be profitable?

The Guardian, who are moving towards adopting a form of open journalism, are facing commercial troubles of their own. Guardian Media Group (GMG) Chair, Dame Amelia Fawcett, wrote in the 2010/11 Annual Report that GMG relied on revenue that was coming from outside of the core news media assets. Fawcett is optimistic about The Guardian’s prospects, while realistic about the challenges that face them.

The Guardian – like other parts of GMG – has demonstrated great ingenuity and vision in adapting to the digital age and attracting a new, global readership. Its current initiative to develop its US operation, building on an already sizeable audience in the States, is a prime example of this. However, digital revenues, while growing steadily, do not fully offset declining print revenues. This is the challenge facing GNM and news organisations across the world.

CEO of operations, Andrew Miller, wrote in the anual report of the “aim of ensuring the Guardian’s long-term economic sustainability,” and that “During the year under review, GMG continued to provide GNM with a stable financial foundation, allowing the Guardian and Observer to focus on producing outstanding journalism” suggesting that the financial sustainability of GNM’s news media asests are still in doubt, even if there is much optimism and pride in the quality of the journalism that is being produced.

Chair of the Scott Trust, owners of GNM, Dame Liz Forgan, reiterates the problems facing The Guardian and their new open media model.

Along with every other media organisation we face enormous challenges in the coming years as advertising and readers move ever faster from print on paper to the web, resulting in the destabilisation of traditional business models. In the new war of the worlds between open and closed information systems, the Guardian has championed the former with passion. Open is in our DNA, in our liberalism, in our journalism and in our relationship with readers. Our model therefore conforms in a profound sense with our values and our culture. But the challenge to find new sources of revenue in new markets across the world is a tough one to which the whole Company is dedicated.

Of course, there is a large part of The Guardian’s operation that is based on traditional journalistic models; a large part of The Guardian’s income comes from print and subscriptions. How they will monetize open journalism in the online environment will be a huge litmus test for open journalism.

If open journalism is a method of organising, engaging and aggregating the knowledge and reporting that exists in online communities, the cost of producing content must be lower than it was before, and this will work in favour of open journalism. Identifying whether open journalism can be profitable is still difficult and will remain an open question for quite some time. We’re not even sure what open journalism is; our own definition is still quite ambiguous.

But I would love to hear you reaction to this question on the comments.