A lot of people got rich on the idea that you can make a news-driven product, sell advertising against it and make that work on a regular basis.
It’s a business model that has been blown to hell, said Wall Street Journal writer Paul Vigna. Vigna moderated a conversation about the economics of journalism in the age of fake news. The discussion took place at the Ethereal Lounge by ConsenSys at SXSW 2018.
“You have now a situation where the information superhighway has led us to the Tower of Babel,” Vigna said.
With traditional business models eroding the foundations of journalism, the focus is on new models that elevate transparency, sustainability, and quality.
Civil is building a newsroom platform using blockchain technology and crypto economics. It plans to launch in 2018 with a network of user-supported newsrooms, creating a marketplace for sustainable journalism on the blockchain. Several newsrooms that plan to launch on the Civil platform were represented on the panel, including Popula, Sludge, and Cannabiswire.
The panel explored the emerging movement around using blockchain to unlock new funding models for journalism.
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ConsenSys is a global formation of technologists and entrepreneurs building the infrastructure, applications, and practices on the Ethereum platform that enable a decentralized world.
Here’s an excerpt from the discussion:
Paul Vigna: I started in journalism in 1991 before the internet came along. Two major changes: 1. The business model has been blown to hell, and 2. Nobody can really discern what is true and what isn’t anymore. It’s much easier to get out propaganda and misinformation and it is critical that we have good journalism. We saw in 2016 what can happen when you don’t have credible sources. What is Civil, why you were you drawn to it and why did you create it?
Matt Coolidge (co-founder of Civil): Civil is a decentralized marketplace for sustainable journalism. Our mission is journalism. Blockchain in the enabling technology but this is an idea that we have been thinking about for a long time. Blockchain unlocks two features that have allowed us to begin to build up this marketplace of great journalists and great newsrooms. 1. Self-governance: the ability to introduce a new incentive structure that allows you to maintain a high-quality filter for journalism, and 2. Permanence: Being able to ensure that your archives are permanently stored in a decentralized fashion where there’s no one single point of failure, there’s not one single actor, a concentrated group or oligarchy of very powerful folks that can make the unilateral decision to just unplug the archives. Recent stories of Gawker and others really underscore that existential concern for journalists. Civil entered the marketplace initially for local, international, policy and investigative journalism. We see those as arguably the four beats that have been hardest hit by two decades of mass consolidation. They’re very underserved markets in this day and age when the institution of journalism is being vilified by the top levels of government as the enemy and not a critical hedge against overreach and corruption. They underpin of democracy. I think we see those as critically important. If we can build our reputation initially as a marketplace serving those very in-demand markets, we think there should be a lot of people excited about us on Day 1.
Paul Vigna: How did Sludge get involved?
David Moore: Sludge is focused on money and politics. We’re going to be covering the shadowy way in which lobbyists and special interests affect the public policy-making process — a topic that’s much in demand in the news right now with the mid-term elections coming up. We’re looking at covering the power networks that underlie much of the governing process at the federal and state level. Civil’s a natural fit for telling independent and muckracking stories about money and politics.
Maria Bustillos: The question always arises: Why does journalism need blockchain? What does blockchain do for this industry? In addition to archiving — which is hugely important to me and a lot of the reason why I wound up here — we saw the failure of the internet and linkrot. We’re not taking good care of the information — the raw material that is used to make history. There’s more to it than Peter Thiel coming and shutting down Gawker. That was a big motivator for me. I covered that trial.
I see this as a fully-contained economy separate from the old economy of journalism. We have the opportunity, for example, to do micropayments to journalists, which I see as the foundation stone of a completely new payment model for this industry. There’s the ability to bring in and involve the readership on a financial level where we can share.
Are any of you familiar with the BAT token? (The Basic Attention Token or BAT seeks to improve the efficiency of digital advertising with a new token that can be exchanged between publishers, advertisers, and users on the Ethereum blockchain.) They’re about letting people who use the internet benefit from it financially, share in the revenue process.
We have some pretty interesting ideas on how to do that at Popula. I have been covering blockchain for many years and have been looking for a way to unite these things. The whole thing about blockchain producing incorruptible records was very attractive to me as a person who’s interested in record keeping. When (Civil) gave me a buzz and said, “We’re making a blockchain-based platform for journalism,” I was like, “Oh hell yes. I’m right there with you.” I was just waiting for this phone call and it came.
Nushin Rashidian: One thing that’s really intriguing about Civil is that when you’re talking about cannabis, the ad model and the traditional models that we have today incentivize the lowest common denominator in coverage. The kind of coverage of cannabis that I feel like I would need to do at scale to make money with advertising is not the kind of coverage I think the industry needs. It’s very consumer-facing, very stoner-y — product reviews. It’s very hard to scale meaningful, impactful coverage.
To actually match the business model with the editorial mission, we needed something like this. I love it. It’s built for it at the outset. I don’t have to go and reverse-engineer or try to change people’s behaviors. I can come out the gates and say, “This is who we are.” We can have different tiers of membership. Like Maria, for me it was like, “Finally. I don’t have to contort myself, or square-peg-round-hole this thing, or feel like the only way for me to do cannabis coverage is to go against my editorial values. So this has been like a really empowering, amazing thing.
Paul Vigna: It’s sad that it’s so important, but how do you produce journalism that pays journalists enough to eat?
Matt Coolidge: There’s two initial approaches that we’re taking. Civil raised a ($5 million) round of capital last fall from ConsenSys. We took $1 million from that and set up what we called a First Fleet Fund. We have partnered with Tom and his group at Old Town Media to recruit some great veteran journalists that fall into those four categories of local, investigative, international and policy (beats) that I mentioned. We want to stand up and support newsrooms. We’re supporting them with mixes of cash and token grants initially so that on Day 1 of his marketplace launching this spring, we’re not going to have a chicken-and-egg problem. We’re getting such great passion from our growing community. They support the idea of an ad-free marketplace for more sustainable journalism. But what does that actually mean if on Day 1 it’s just a great idea with no substance? Our inclination is that in the very near future, these newsrooms will shift to more sustainable models. We’ll see a network effect, where more journalists are going to apply. We can get into the mechanics of how we’re trying to incentivize a high-quality filter and make this a difficult and expensive platform for bad actors to penetrate.