Monday, August 25, 2008

Crowdfunding will work -- for some

Sunday's New York Times "Week in Review" section carried a story about "community funded reporting," also known as "crowdfunding." This is an experimental business model for funding journalism that sort of works like everyone's favorite microfinance site Kiva: A news story with a proposed budget is posted on the website of the crowdfunding organization, Spot.Us, and once enough regular folks pony up the money to cover the budget, a journalist proceeds to report and write the story.

Right now the idea is being tested in Northern California only, with the support of a two-year, $340,000 grant from the Knight Foundation. Stories that have been proposed include fact-checking of local political ads, ethanol as the weak link the California's energy strategy, and what really happens to recycled trash in various municipalities.

Here are my predictions about whether this experiment is going to work:
  • Crowdfunding will emerge as one of many new business models for journalism. This is because, unlike in the past, when journalism was all based on the same advertising-driven business model, in the future, there will be different kinds of business models for different kinds of journalism.

  • Crowdfunding will work for some kinds of stories, but not all. Mainly for stories that readers really care about, and that aren't already being covered elsewhere.

  • The success of crowdfunding will depend on how closely it emulates the social networking aspects that make Kiva work. It won't be enough for journalists simply to post the results of their work. They will need to find ways to make their contributors feel connected to the whole endeavor.
Crowdfunding already has a track record. Chris Allbritton traveled to and reported from Iraq, based on $15,000 in contributions from his readers. In the fall of 2004, when Talking Points Memo was just one guy's opinion blog, Josh Marshall raised about $5,000 from his readers for a trip to cover the New Hampshire primaries.

What made these appeals work were two things. First, the authors had a personal connection with their readers. Their readers enjoyed reading their take on things and felt personally invested in the writers themselves. Second, the readers really cared about the subjects being covered.

Going forward, crowdfunding will work for the same reasons, with a few twists. In the beginning, people will pony up dollars because they're excited about the topic. In the long run, however, contributors will continue to fund the work of specific journalists whose work they really like, the same way television watchers vote with their remotes by tuning in to Jon Stewart and Steven Colbert. Those audiences are not tuning in because of any particular story either show is covering. Instead, they're tuning in because they like Stewart or Colbert's points of view, the way they talk about what's going on in the world.

A few more things will help make crowdfunding work. The more Spot.Us works to make contributors feel invested in and a part of the work, the more likely they'll have repeat customers. How do you do this?

  • Reporters will need to let their readers get to know them as people, by talking about who they are and why they care about the stories they're reporting on.

  • Reporters will also need to bring their readers along as they're doing the reporting, not only posting regular blog-like updates about their latest research, but by engaging in a coversation with funders, letting the funders help them think about what parts of the story are important, about where to find various pieces of information, and possibly even help them actually do some of the reporting.

  • And lastly, reporters will need to share the success of the story with their funders. When they're finally done, the journalists will need to celebrate with their funders, cementing the feeling that they were all--journalist and contributors alike--in the project together.
People today participate in group endeavors not just because they believe in the endeavor itself. In our increasingly lonely society, people also participate in order to feel connected to others. The more Spot.Us reporters can make their funders feel like they're part of a grand endeavour, rather than just wallets on the sidelines, the more funding they will attract in the long-run.

Crowdfunding will not be the panacea to the financial challenges journalism faces as a whole. But it will be one solution that will enable some of the reporting we--and our readers--care about to continue.

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