Still More News About the News

By Becky O’Malley
Thursday April 16, 2009 - 06:39:00 PM

It’s time for another report on the state of the newspaper industry, Berkeley branch. This is beginning to look more and more like KQED’s pattern of incessant pledge breaks, but it’s unavoidable. Maybe it’s just our preoccupation, but it seems that every publication we pick up, every website we read, has a story on the dire and desperate fate of newspapers, which all over the country are dying like flies. Papers elsewhere, notably Europe and India, aren’t doing so well either. 

Katharine Mieszkowski at Salon.com has a good round-up of the bad news and some suggested strategies for counteracting it, notably converting to papers to nonprofits. Eric Alterman sums up his latest column in The Nation on the same topic thus: “It’s an argument for newspapers to give up on making a profit, stop pretending their editorial endorsements matter to anyone and embrace a nonprofit model for survival.” 

Well, sure. The traditional “Chinese wall” between newsrooms and financial management has ensured that most newsies don’t have to know too much about the sordid business of paying the bills, but it’s not quite as simple as they might imagine. Even for nonprofits, the money has to come from somewhere.  

Foundations, you say? In the current economy, all of the good works foundations are already supporting are hurting for money, and there’s just not enough money in all the foundations in the world to support all the newpapers in the world. Mieszkowski says that endowments have been down 40 percent even before newspapers started to get in line for money. 

Alterman’s comment refers to the federal tax law governing what are called 501(c)3 nonprofits—donations to these are tax-deductible for the donor, and they can get grants from similarly organized foundations. Tax-deductible nonprofits under federal law aren’t allowed to endorse candidates for office.  

Here at the Planet we’ve traditionally shied away from institutional endorsements anyhow, so that wouldn’t be a problem for us. We’re working toward getting nonprofit tax status so that individuals can get tax deductions for their contributions to the paper, but nonprofit status alone won’t guarantee revenue. 

Even without offering tax deductions, the support we’ve gotten from Planet readers recently is heartwarming. In the 11 weeks since Feb. 1, when we made our first major appeal for funds, we have raised about $21,000, most of it in the first few weeks. Last year contributions, largely unsolicited, totaled about $3,500. Contributions have come from 300 different people, on average about $70 per person. Ten people have agreed to give $10 a month, though in general the informal free-will subscription concept seems to have been too confusing for most readers. 

But do the math—it’s still less than $30,000 in a period where the paper has lost at least $40,000 each and every month.  

From the very beginning of our ownership of the Planet, now more than six years ago, we gave up on the idea of making a profit, as Alterman suggests, but that’s not enough. Advertising, here and everywhere, has continued to decline for many reasons well outside of local control. It almost seems that the retreat from newspaper advertising preceded retail sales losses, and might even have caused them. You’d think that when business is bad, it’s time to advertise, but advertisers haven’t seen it that way for many years now.  

(We’re happy to be able to report, by the way, that the ongoing campaign by a very small number of extremist fanatical crackpots—not to mince words—to persuade Planet advertisers to cancel seems to have had no effect at all. If anything, it’s strengthened the resolve of a growing loyal band who have been offended by the anti-Planet letters and haranguing telephone calls they’ve been getting from the lunatic fringe to keep on advertising.)  

It’s reasonable to expect that as the economy picks up, if it ever does, advertising might also pick up. But papers can no longer count on advertising alone to support their work. 

Is there another answer, for the Planet or for other news sources? It seems to us that the sober bottom-line is that consumers of news will have to support their own habit. For a long time readers (and television watchers and Internet junkies) have largely gotten a free ride, because the gathering and dissemination of information has been subsidized by others. Even the “free” news from Internet sources like Google News or the Huffington Post is primarily aggregation of work done and paid for by the conventionally supported media.  

Public radio is a partial exception. Public radio has been getting an increasing percentage of funding from what are euphemistically called “underwriters,” commercials by another name, though much more low-key and therefore less annoying. Still, both NPR and Pacifica are largely supported by listeners, though they receive a certain amount of foundation support as well  

The Nation magazine has been at this for years, with pretty good success. We just got a letter from them reporting excellent results from their March membership drive, when The Nation Associates gained more than 2,000 new members. That’s something to shoot for. 

We’ve decided to abolish the “free-will subscriber” category since it has confused so many. Mail subscriptions will still be available for those who need home delivery, but everyone else who’s ever contributed to the Planet, including as “subscribers,” is hereby designated a Supporter of the Planet Fund for Local Reporting. We’re working on getting nonprofit status to make such contributions tax-deductible, but don’t try deducting them just yet. In-kind contributions and volunteer services from Supporters are valued as much as cash. 

It seems clear to us, as of now, that there’s no single magic bullet that is going to create the sustainable local newspaper that we’d all like to see. It will take all the available revenue sources—advertising, foundations and reader support—to make it work, and it still might not be enough.  

Over the next two months, we plan to make an all-out effort to find out how much the readers in the urban East Bay really want to have a local paper, and what they’re willing to do to support one. We’re planning some special events for Supporters to give them a better idea of how their contributions are being used and to tap their wisdom on how the paper might survive. We hope you’ll join us in this effort.