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Is Crowdfunding the Future of Journalism?

Is Crowdfunding the Future of Journalism?

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Published by: Crowdsourcing.org on Aug 26, 2010
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Is Crowdfunding the Future ofJournalism?
July 16th, 2009 | byLeah Betancourt
Leah Betancourt is the digital community manager at the Star Tribune in Minneapolis, Minn. She is @l3ahb3tan on Twitter Twitter .
Crowdfunding, or getting many people to donate small amounts of cash to fund aproject, startup, or service, is nothing new. Think public radio or television pledgedrives. Think political campaigns. Think tip jar. Now, as the media landscapechanges and traditional revenue sources are beginning to disappear, someforward-thinking journalists and entrepreneurs are starting to apply thecrowdfunding concept to the news. A new crop of sites are combiningcrowdfunding with volunteer and professional contributions in order to sourcenews that people want to read.There are two issues with crowdfunded sites that also have volunteer journalists,however: who’s going to pay for it and who’s going to write it. These sites areexperimenting with ways of answering these questions.
Finding a Sustainable Model
The problem with the writing issue is that professional journalists typically want tobe paid and non-professionals likely need incentives. The sites have to becomesustainable not just for the people running them, but also for the people writingthe stories and creating the content.“Everybody is facing reality to find a sustainable model,” saidDan Gillmor,Kauffman Professor of Digital Media Entrepreneurship at Arizona StateUniversity’s Cronkite School of Journalism & Mass Communication. “The point isthat everybody is figuring this out now.”
For example, a South Korean citizen journalism site that began in 2000 calledOhMyNews, recently ran up against a major budget shortfall and reached out tothe public for help with funding.The site’s founder and CEO Oh Yeon-ho posted anopen letterJuly 8 on the sitesaying OhMyNews lost $400,000 last year and needed 100,000 people to donatenearly $8 a month in order to become financially stable. AJuly 10 updateonOhMyNews reported that less than 24 hours after the plea, an estimated 1,100readers confirmed a financial contribution, and 1,825 pledged a commitment tocontribute.
The Crowd Funds Production
About three weeks ago,Chi-town Daily News, a hyperlocal community news sitein Chicago that launched in 2005 and is also a registered 501(c)(3) non-profit,began posting a box at the end of each story stating how much it has spent onreporting, writing and editing and asking people to donate. Editor GeoffDougherty said the cost is calculated based on the site’s expenditures for thefiscal year that closed June 30, divided by the number of words they publishedduring the year to get the cost per word (67 cents). The cost per word ismultiplied by the number of words in each story.“We’re looking for ways to a) educate our audience about the costs of doing good journalism; and b) convince them to help pay for it. This seemed like aninteresting step forward on both of those fronts,” said Dougherty in an e-mailinterview.Dougherty said it seems as if they have received more donations although hehasn’t yet seen the monthly total. Chi-town Daily News has also received severalgrants, including two from the John S. and James L. Knight Foundation.“We’re working toward a situation in which we have four roughly equal revenuestreams — grants, individual contributions, advertising revenue, and revenuefrom consulting and events,” he said.Another experimental community-funded journalism site isSpot.us, anorganization located in California’s Bay Area that seeks donations to pursue storypitches. It launched in October and is supported in part by a two-year, $340,000grant from Knight Foundation. Spot.us hasfour types of reporting, with costs and deadlines for fundraising and reporting tied to each.
 For example,one investigative pitchcurrently active on the site seeks to raise$6,000 to send freelance writer Lindsey Hoshaw to the Great Pacific GarbagePatch, a mass of plastic garbage in the Pacific Ocean that’s twice the size ofTexas.Spot.us Founder David Cohn said the trip costs $10,000 and that Hoshaw willpay the rest herself. Part of Hoshaw’s reporting, an online slideshow and storyabout the ocean area, is being considered by the New York Times, and Hoshawwould provide separate content to Spot.us that would be available under theCreative Commons license, according to the pitch.As of this writing, $1,375 has been raised toward the pitch’s goal.
Other Ways to Raise Money
Both Chi-town Daily News and Spot.us rely heavily on grants, as well as crowddonations, but those aren’t the only options. In arecent column, Steve Outing, amedia consultant and Editor & Publisher columnist who covers interactive media,wrote about three new monetization models for content producers, the soon-to-be launchedPayyattention,Kachingle, andContenture.
Payyattention users pay a few cents for a specific piece of content and thedefault price is set by the publisher, according to Outings’ column. He told mePayyattention displays an icon at the bottom of all stories, and if readers like astory, they can donate and then click through to see who else has donated to thestory and how much. The idea is to add a social element to funding content tomake it more fun. He said Payyattention’s founder Stephen Farrell is consideringexpanding the funding icon to include syndicated stories, so that the contributionmechanisms would still be embedded no matter where the content runs.

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