The future of investigative journalism

Pro Publica Knight foundation

Newspapers in the developed world are having a tough time and South Africa may not be that far behind. Those at the helm have to be innovative to find new workable business models for newspapers.

Former managing editor of the Wall Street Journal Paul Steiger is an innovative media man. “The rise of the internet has destroyed the business model of traditional high quality print journalism,” he says. “The old model simply doesn’t work anymore.”

Steiger cites the New York Times management having recently made it known that because of their paywall, they were now making more money from subscriptions and sales than they were getting from advertising. Sounds good, but Steiger explains that the real picture is not so rosy. “The traditional newspaper revenue split was anywhere between three quarters to 80% from advertising.” So, this means that revenue from ads is so low that their main income is coming from sales – which generally doesn’t amount to that much.”

The New York Times still manages to sustain the quality of its journalism and especially its investigative stories. But often one of the first things that goes out the window when a newspaper is cash strapped is investigative journalism because it takes a great deal of time, money, uses the most skilled staff and there are no sure-fire stories. Also, most advertisers are nervous to have their ads placed next to exposés.

“Investigative reporting is crucial to democracy and we have to find creative ways to make it happen amid painful changes in the economy and business,” says Steiger, who is the founder and executive chairperson of ProPublica, the first non-profit investigative news organisation.

In 2006, he had been managing editor at the Wall Street Journal for 16 years and in print journalism for 41 years when he was approached by Herb and Marion Sandler for his help. This billionaire couple had launched the philanthropic Sandler Foundation and
wanted to allocate money to investigative journalism.

Steiger offered them a clear model for setting up a news organisation dedicated to investigative stories. He had four criteria for making it work. The first was that they had to have a permanent staff to do it well. “To do the kind of journalism we wanted to do, you must have people comfortable enough to stay on the story as long as needed,” he told the Sandlers. “You also must accept dry holes (dead-end stories). Freelancers will starve in such conditions!”

Secondly, he said it was important to partner with one or two of the large news organisations to do the biggest stories. He explained that they could be granted some exclusivity over a short period of time in exchange for good visibility.

Thirdly, to guarantee the widest reach, he would distribute the material freely on the web. And, finally, as editor, he would be solely responsible for the content, and funders and other contributors would have no say in story selection.

The Sandlers loved it and in 2008 ProPublica was born: the first non-profit newsroom dedicated to public interest investigative journalism.

Since then, Steiger has approached numerous philanthropists and convinced them that a portion of their money would be well spent on investigative journalism. “It is a fine way to spend their money because investigative journalism allows [the] public to fix problems of which they would otherwise be unaware,” says Steiger. “Investigative stories are always in the public good.”

He cites a ProPublica story, ‘When caregivers harm: problem nurses stay on the job as patients suffer’, about nurses who were violent, neglectful, incompetent or had a history of drug abuse, but able to maintain a spotless record. If they lost a job and even had criminal case of abuse against them, they could find a job in the next state without any problems. That is, even if the nurses were reported to the Registered Nursing Board as dangerous. It would take up to three years for the board to act against a nurse.

Within one day of this ProPublico exposé, which ran in its partner publication for this story, the LA Times, Los Angeles governor Arnold Schwarzenegger fired and replaced the board. “There are many more beneficiaries from such exposés than just those who are reading the story,” says Steiger, “but one can’t collect money for the investigatives from those beneficiaries.”

But, with his business model, you can ‘fundraise’ for your work because it definitely benefits many people and is giving back to society in a way that is not too dissimilar to aiding medical research. Steiger explains that this is just one way of being innovative in ensuring the future of good journalism.

Here are a few others that he mentions:

•  He believes that newspapers like the New York Times and LA Times, Wall Street Journal and others like them, which he refers to as ‘legacy’ news organisations, will continue to bring out exceptional journalism and be read rigorously. However, “newspapers are a declining source” because of the costs attached and drop in advertising revenue. Many will move partially or totally online – alleviating the printing, paper and distribution costs – which will help substantially.

•  Another new format Steiger refers to is ‘new media’: organisations like the Huffington Post – a news website, content aggregator and blog – which Steiger claims pays their committed journalists minimal wages and uses aggregated news and blogs to complement its own journalism and fill the site.

They are very disciplined and don’t let the costs surge above revenue, he explains. “They took some of their revenue to do enterprise journalism and won a Pulitzer,” says Steiger. The Huffington Post has huge traffic and a massive audience and it draws advertisers.

•  The ‘specialised web journalism’ format, like Politico.com, generates revenue partly by providing subscriber-only information on the most important public policy debates, and hosting sponsored newsmaking events with the country’s most powerful elected officials, according to the website.

“Politico has a focused audience and they sell costly advertising in a controlled circulation printed edition that goes out when congress is in session. For this, they use the best of the online stories. This works well, particularly because their advertisers want to lobby government folk,” says Steiger.

This niche publication dynamic, he says, is a successful business model because the advertisers are talking directly to their market so they find it worth paying top dollar.

•  Another format Steiger speaks of is university media that is attached either to a law or journalism school. “This works well because there is an infrastructure for the publication and while the reporting staff may be inexperienced, they are likely to be very passionate and hard-working and are overseen by experienced journalists in the form of senior faculty members.”

Steiger explains that these are just a few examples of how one needs to be thinking and moving. “There is no single magic bullet for the future of journalism, but there has to be and we need to create it.”

Before Steiger started changing the minds of philanthropists, who would have thought that they would be giving money to sustain journalism? “It is all in the name of public spiritedness. These are billionaires who hate the abuse of power. Some are more focused in the finance world, while others want their money to be concentrated on medical exposés. It makes them feel good and it helps us provide great stories.”

Steiger explains that Bill Gates and Warren Buffet are at the vanguard of convincing the ultra-wealthy to give away half their fortunes. “We just say ‘divert 2% to news’.”

Non-profit is just one of the answers, he says. “We have to be quick to adjust to what works and look past print for the future.”

  • LlewellynKriel

    If, as Steiger insists, “Investigative reporting is crucial to democracy”. why is South Africa’s democracy in such a parlous state? And that while we have some of the finest investigative teams in the world.

  • BRSjr

    While Pro Publica does excellent work, and has raised the profile of nonprofit investigative news in the USA,it is far from “the first non-profit investigative news organisation.” The Center for Public Integrity and the Center for Investigative Reporting, both in the USA, were founded several (many) years before Pro Publica.

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