Op-Ed: Survival of quality journalism hinges on funding
Eventually if you want quality journalism, readers will have to pay for it. News outlets that rely solely on digital advertising revenue will not be able to sustain their business model much longer.
To build a sustainable digital news operation, it is essential to have multiple revenue streams. The most common sources include advertising and subscription models.
However, many are adding events, membership and even crowdfunding into the mix, especially when the news outlet covers a specialized subject. A news outlet relying solely on advertising requires a significant traffic volume to make it sustainable or else it will fail.
Moving forward, if a digital news outlet wants to succeed, it needs to invest in technology. It means not only having a strong and mobile-friendly website, but capitalizing on new tools of storytelling, data journalism, podcasting and video. Elements that requires capital and human investment that will not be attainable relying solely on advertising.
Some digital news entrepreneurs in the United States have started to venture into subscription-only models. For example, Boston Sports Journal is a subscription- based outlet, covering Boston sports news.
Lately, other sports news projects, have propped up, some with no outside capital, but with a strong desire to serve narrow and often relegated news beats. Others have sparked interest of Silicon Valley venture capitalists, investing in digital platforms such as Axios, The Hustle and The Information.
However, the story is not so rosy in Puerto Rico. With the exception of Noticel, which recently was acquired by entrepreneur Mark Curry, and the recent reinstatement of El Nuevo Día’s subscription paywall, the majority of the news industry on the island tries to survive depending solely on advertising.
The latter face a tougher challenge, as they have accustomed their online readers to free content for more than a decade. The success of their subscription paywall will be dependent upon convincing their readers that their content is worth paying a monthly fee.
Another huge challenge for news outlets is that digital traffic is controlled mostly by Facebook. Media creators get no revenue sharing from Facebook, while news content presented on users “newsfeeds” skews to stories that generates lots of comments or shares, at times emphasizing on the latest viral video or meme.
The environment is very complicated for news outlets with specialized or limited audiences, such as News Is My Business and Sin Comillas, among others.
Add to the fact that that 85 percent of digital advertising budgets in Puerto Rico and the United States are spent exclusively on Facebook and Google, leaving the rest of the media market — small and big fish — fighting for the remaining 15 percent of the budget.
This current scenario limits the availability of new and distinct online media voices. If the trend continues, we will have even fewer information sources in the near future. The moment is now, to try to expand into new revenue streams.
With the island deep in a decade-old recession and with an uncertain economic future, now more than ever, Puerto Rico needs strong and independent business news coverage. Knowledge is power.
The more you understand your surroundings, better decisions that can be made.
We cannot afford to lose the few independent news sources that are still available in Puerto Rico. If the advertising environment cannot fully support the creation and distribution of news, we should let the readers step up and support it.
It has been done for decades in public broadcasting in the United States, with a combination of sponsorships, fundraising drives, and even galas.
The era of free news is quickly coming to an end. Its up to us to make sure that the information keeps flowing.