Funding in-depth journalism in a time of scarcity

Discourse Media is a rare breed in Canada — well, actually, it’s a bit of a strange beast anywhere. Our team of 10 employees, plus freelancers and collaborators, produce in-depth journalism about complex issues, the sort of journalism that is difficult to jam into the daily news cycle because it takes time, resources and analysis. We prioritize data journalism that not only visualizes existing data, but presents new data or analysis, such as this collaboration with Maclean’s. We spend weeks on investigative reporting to get the nuanced story, not just the news story, such as this report from remote Haida Gwaii. We immerse ourselves in communities for as long we need to build trust, even if it takes months before we produce any content.

We do this because we believe there is a market for journalism that not only documents the first draft of history (i.e. news) but offers high-value information and analysis that helps communities, policymakers and individual citizens make difficult decisions about the challenging issues facing us, such as how to address energy poverty without hastening climate change.

That’s right—I used the word market. Unlike many mission-driven journalism organizations, we’re not a non-profit. Rather, we’re a regular company with hopes of being modestly profitable one day soon. If we can crack the nut of a profitable business model that supports public interest journalism, we believe we’ll be better equipped to scale and have a larger impact than we would as a non-profit. Of course, we’re not the only ones trying to figure out the ever-elusive sustainable new media model. So at a time when most newsrooms are cutting back on investigative reporting, laying off journalists or inventing new sponsored content offerings for advertisers, it’s not surprising that many wonder how Discourse Media manages not only to keep the lights on, but grow.

The concept behind our business model is simple: we think of journalism as a service. We know in-depth journalism is expensive and that we can’t fully finance our work with the traditional advertising-based business model that has media outlets chasing after digital eyeballs for an ever-decreasing slice of the advertising pie. This model often results in half the nation’s reporters covering the same breaking news event, be it Trudeau or Ghomeshi, which is horribly inefficient and would force us into editorial decisions that don’t align with our mission.

Instead, Discourse Media devotes itself to stories, issues and communities where there is an acute need for journalistic information, probing and storytelling, in an effort to always add value. Rather than produce content that millions click on, we’re interested in creating content that a smaller audience can use — journalism that, for example, helps voters make a decision on a local referendum, informs a policy change, inspires a school community to try a new approach to teaching, or gives organizations working to make change a better understanding of the landscape in which they work.

The challenge for Discourse Media’s business team is how to monetize that value. We know that our journalists — in the process of conducting the resource-intensive reporting our projects require — obtain a lot more expertise, research, contacts and data about the issue they’re investigating than ever make it into the feature published by The Globe and Mail or the video that goes viral on Facebook. And so, monetizing the content itself, through syndication, advertising, subscription or otherwise, is only part of the equation. We think of all that scribbling in the margins of our reporters’ notebooks as un-captured value, from which we produce products in addition to media content that different sorts of customers will pay for.

A run-through of Discourse Media’s revenue in its first two years (from March 2014 to March 2016) offers a more detailed look at our business model:

1. The most obvious product of the journalistic process is, of course, journalism content. Content commissioned and funded by media outlets accounted for 22 per cent of our revenue in our first two years.
2. We also develop our own independent journalism projects about issues that are either under-covered or poorly covered by other media outlets because of their systemic nature or complexity. To fund these, we seek philanthropic or non-profit funding partners who recognize the need for more sophisticated journalism about a particular issue and who commit to respecting our journalistic independence (more on that below). This model, pioneered by American non-profits such as ProPublica, made up 35 per cent of our revenue.
3. Sometimes, we ask our audience to pay for a journalism project through crowdfunding. Only two per cent of our revenue came directly from our audience in our first two years, but we have big plans for growing this in future.
4. Similar to the thinking behind the Economist Intelligence Unit, which repackages research for global business executives, we produce reportsbased on all that extra value in the margins of our notebooks for non-profits and foundations. These products, which help organizations understand the media discourse surrounding an issue or the information flow in a geographic area, accounted for 10 per cent of our revenue.
5. We work with our journalists to repurpose the expertise they’ve developed on a subject into workshops and public talks that advance Discourse Media’s mission to fuel constructive public discourse. Eleven per cent of our revenue was in the form of fees for delivering workshops and talks about our issue areas.
6. In the process of developing a new media startup, we’ve learned a lot about subjects from solutions journalism practice to decentralized distribution models to deep community engagement. Twelve per cent of our revenue was generated by sharing that expertise through consulting, reports and workshops with journalists and non-journalists.
7. The rest of our revenue in our first two years came from other sources, such as renting out desk space in our office to freelancers. Oh, and we did one sponsored content contract in our early days, which totally didn’t work for us, although it was fun and taught us lots about SEO.

While this retrospective view of our revenue sheds light, the pie looks a lot different in year three. Our revenue growth (which has tripled, approximately, each year) is driven by a trend that has unfolded in the States for quite some time: increasing funds flowing from philanthropy to journalism organizations (category 2 above).

At Discourse Media, we recognize that even though foundations are behind serious, critical, Pulitzer Prize-winning journalism, many worry about the influence on independent reporting of all that money flowing from organizations that often have an agenda.

Do we worry about potential real or perceived conflicts of interest? Absolutely. But we also understand that there are no purely clean funding models for journalism. Many of the great newspapers of the 20th century were bankrolled by powerful families who valued, and used, the influence of owning the presses. Advertising models come with the risk of corporate influence (as much as we don’t like to acknowledge it, occasionally that firewall between advertising and editorial breaks down, as I experienced myself while working in Canada’s mainstream media). Even publications purely supported by their audience (whether with subscription or crowdfunding) must serve that audience, which requires making editorial choices that aren’t entirely objective.

Nevertheless, Discourse Media follows best practices pioneered by the non-profit news sector to safeguard against potential conflicts of interest:

• In our contracts, funding partners sign a clause committing to respecting journalistic independence.

Today more than ever journalists are challenged to maintain principles of ethics and good practice. As DM explores new business models in an industry dominated by massive change and shifting revenue streams, it is important to maintain journalistic integrity and ensure that ethics and standards are well understood prior to entering into any new partnership/project. Those principles are: truthfulness, accuracy, objectivity, impartiality, fairness and public accountability. It is necessary to adhere to these principles in order to foster genuine dialogue, engage our journalism partners, secure earned media syndication and maintain project credibility. To this end, [client name] will not seek to influence or edit journalist-produced content in advance of publication.

• We are transparent with our audiences about our funding sources. In fact, we go a step further than most by acknowledging which funders are connected to specific projects, rather than lumping them all together in a pooled funding disclosure.
• We strive to separate development and partnership management from editorial production. However, we acknowledge that at a small startup with 10 employees there are no airtight firewalls and so it’s important that we nurture an open culture that encourages all team members to raise concerns when they arise.
• We are prepared to walk away, and have in the past walked away, from any funding arrangement that violates our journalistic values.If we’re not in a position to say no, then we’re not truly independent.

The more exciting way that Discourse Media is actively working to protect our independence lies in our future development. We believe that the more diverse our revenue, the more independent our journalism. So while we expect that the philanthropic sector will continue to be an important ally in our continued growth, we are developing new revenue streams to support the public interest journalism we know our country needs.