propublica

What to do with $250m in digital journalism? (1)

 

Pierre Omidyar, Ebay’s founder and now philanthropist, pledged $250m to a new investigative reporting venture. Starting a project of this magnitude from scratch isn’t an everyday occurrence, leading us to wonder how it could look like? (First of two articles) 

For a digital journalism project, 250 million dollars (€185m) is a serious investment. So far, it’s unclear whether this is a one-time investment, merely initial funding (Omidyar’s share in eBay is approx. $8.5bn), or just yearly running costs. To put things in perspective, The New York Times’ 1300 people newsroom costs around $200m per year, including $70m for international coverage alone, i.e. reporting abroad and maintaining 24 foreign bureaus manned by 50 reporters. But, by most measures, the scope of NYT operations is at the far end of the scale.

A more realistic example is the funding of the non-profit media ProPublica (see a previous Monday Note on the subject). According to its 2012 financial statement (PDF here), ProPublica has raised a little more than $10m from philanthropic organizations and spends less than that for a 30 persons staff. No one disputes that, journalistically speaking, ProPublica is a remarkable publication; it faithfully follows its “Journalism in the Public Interest” mission statement, collecting two Pulitzer Prizes in so doing.

Great journalism can be done at a relatively minimal cost, especially when focused on a narrow segment of the news spectrum. On the other hand, as the New York Times P&L shows, the scope and size of its output directly correlates to the money invested in its production – causing the spending to skyrocket as a result.

Since we know little of Pierre Omidyar’s intentions (interview here in the NYT and a story outlining the project), I’ll spare Monday Note readers my usual back-of-the-envelope calculations, and I’ll stick to a general outline of what a richly funded news ventures could look like.

Staffing structure. Once again, ProPublica shows the way: a relatively small team of young staffers, coached by seasoned reporters and editors. For this, Omidyar draws the hottest name in the field, namely the lawyer-activist-Guardian blogger Glenn Greenwald, who played a prominent role in the Snowden leaks (more about him: his blog on The Guardian; a NYT Magazine profile of Greenwald’s pal Laura Poitras, another key Snowden helper).

Greenwald_guardian

Multi-layer hierarchy is the plague of legacy media. The org chart should be minimalist. A management team of five dedicated, experienced editors is sufficient to lead a 24/365 news structure. Add another layer for production tasks and that’s pretty much it. As for the headcount, it depends on the scope of the news coverage: My guess is a newsroom of 100-150, including a production staff (I’ll come back to that in a moment) can do a terrific  job.

No Guild, no unions, no syndicats à la française, please. Behind their “fighting for our people” façade, they cynically protect their cushy prebends and accelerate the industry’s demise. As a result, the field is left open to pure players – who are keeping people in stables, content-recycling factories.

Beyond that, avoiding any kind of collective bargaining allows management to pay whatever will be necessary to hire and retain talent, without relying to fake titles or bogus hierarchy positions to justify their choices. In addition, above-market salaries should discourage ethically dubious external gigs. Lastly, a strict No-Kolkhoze governance must be enforced from the outset; collaboration and heated intellectual debate is fine as long as it doesn’t emasculate decisions, development, innovation – and speed.

A Journalism 2.0 Academy. I strongly believe in the training of staffers, journalists or not. Hiring motivated young lawyers, accountants, financial analysts, even scientists, and teaching them the trade of journalism is one the best ways to raise the competency level in a newsroom. It means having a couple of in-house “teachers” who will compile and document the best internal and external practices, and dispense those on a permanent basis. This is what excellence requires.

A Technology Directorate. On purpose, I’m borrowing jargon from the CIA or the FSB. A modern news organization should get inspiration from the intelligence community, with a small staff of top level engineers, hackers, cryptographers, data miners, semantic specialists. Together, they will collect data, protect communications for the staff and their sources, provide secured workstations, laptops and servers, build a mirroring infrastructure as a precaution against governmental intrusion. This is complex and expensive: It means establishing encrypted links between countries, preferably on a dedicated network (take advantage of Google’s anger against the NSA to rent capacity), and putting servers in countries like Iceland — a libertarian country and also one of the most connected in the world. While writing this, I ran a couple of “ping” tests, and it turned out that, from Europe, the response-time from an Icelandic server is twice as short as from the New York Times!

Besides assisting the newsroom, tech staff should build a secure and super-fast and easy-to-use Content Management System. Most likely, the best way will turn out to be a WordPress system hack – as Forbes, Quartz, AllThingsD, and plenty of others did. Whatever the setup ends up being, it must be loaded with a powerful semantic engine, connected to scores of databases that will help enrich stories with metadata (see a previous Monday Note on the subject The story as gateway to knowledge). By the same token, a v2.0 newsroom should have its own “aggrefilter”, its own Techmeme that will monitor hundreds websites, blogs and twitter feeds and programmatically collect the most relevant stories. This could be a potent tool for a newsroom (we are building one at Les Echos that will primarily benefit our news team.)

Predictive Analysis Tools and Signal-to-Noise detection. In a more ambitious fashion, an ideal news machine should run analytics aimed at anticipating/predicting spasms in the news cycle. Pierre Omidyar and Glenn Greenwald should acquire or build a unit like the Swedish company Recorded Future (more in this story in Wired UK), which is used by large corporations and by the CIA. Perhaps more realistically, building tools to analyze and decipher in realtime the internet’s “noise”, and being able to detect “low-level signals” could be critical to effectively surfing the wave.

That’s all for today. Next week, I’ll address two main points: Designing modern news products, and ideas on how to make (some) money with this enthralling venture.

frederic.filloux@mondaynote.com

Lessons from ProPublica

Paul Steiger is one of the men I admire the most in my profession. Five years ago, at the age of 65, and after a 16-year tenure as the Wall Street Journal’s managing editor, he seized the opportunity to create a new form of investigative journalism. Steiger created ProPublica, a non-profit newsroom dedicated to the public interest and to deep dive reporting. He hired a bunch of young staffers (coached by seasoned editors and reporters) that could help him lift data journalism and computer-assisted reporting to the highest level. Thanks to wisely managed partnerships, he gave ProPublica a wide audience and the quality and breadth of his newsroom’s reporting landed it scores of awards, including two Pulitzer Prizes. ProPublica was the first online news organization to receive such a seal of approval.

All this in five years, with now 33 journalists. Kudos.

Last wednesday, at the end of quick hop to New York, I paid Paul Steiger a visit. His corner office nests on the 23rd floor of Broadway, overlooking Wall Street’s canyons and Manhattan’s southern tip. At 70, Steiger has a twinkle in the eye that you don’t often find in reporters half his age. Especially when he speaks about ProPublica’s most shining journalistic moments.

In late 2006, the Sandler Foundation, approached Steiger with a wish to allocate a fraction of its immense wealth to the funding of investigative reporting. The newsman made four recommendations:

– The first one was to rely on a permanent staff as opposed to hired guns. “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. You also must accept dry holes. Freelancers will starve in such conditions!”

– Two, for the biggest stories, he wanted to partner with one or two large news organizations that could be granted some exclusivity over a short period of time in exchange for good visibility.

– Three, in order to guarantee the widest reach, Paul Steiger wanted to distribute the material freely on the web.

– Four, he would solely be responsible for content; funders or other contributors would not be involved in selecting stories. (Actually, on ProPublica’s first board meeting, none of the financial backers knew what the newsroom was working on.)

The partnership proved to be a great idea and expanded much farther than anticipated. It relied quite a lot on Paul Steiger’s and Stephen Engelberg’s personal connections (Engelberg is ProPublica’s editor-in-chief.) Quite often, Steiger explained, once a story neared completion, he’d place a call directly to a key editor in a major publications. “Sometimes, I could feel the excitement over the phone”, he laughs. He had to be very careful not to say too much before hammering the deal. I asked him how he handles confidential sources: “Well, we do not mind giving sources’ names to editors and lawyers, but less so to beat reporters… You know, reporters are human, and they might be tempted to call the sources themselves…”

Cooperation with other medias turned out to breed an unexpected advantage: transforming good national stories into a local ones. The best example, is the Dollars for Docs project. In a nutshell: a sizable portion of pharmaceutical firms operating in the United States are now required to reveal all direct contributions to doctors. (It’ll be 100% next year.) Needless to say, they complied reluctantly, providing a sloppy, almost useless database. As a result, the two reporters assigned to the subject were at a loss when it came to retrieve relevant data. Then, a young ProPublica in-house data specialist joined the team and solved the puzzle in a few weeks. The story was published by ProPublica’s five partners: The Chicago Tribune, The Boston Globe, PBS, NPR and Consumer Reports. Why Consumer Reports? “Because they had polling capabilities”, Steiger said. “Pharmaceuticals companies were saying patients didn’t mind if doctors got fees from them, we proved patients actually care…” After a few days for the key partners’ exclusivity window, the database was released on the web on October 19, 2010. In an easily searchable way, it showed the status of 17,000 doctors receiving a total of $750 million. A small stimulus to keep the flow of prescriptions smooth and steady — and to contribute to the indecent cost of healthcare in America.

Then the local mechanics kicked in. In the months afterwards, no less than 125 local outlets picked up the story, extracting relevant local information from the database and adding context. That’s one of the most interesting aspects of ProPublica’s work: its ability to cause a national interest story to percolate down to the local news organizations which, in turn, will give the story more depth by connecting it to its relevant community. (ProPublica now has 78 partners)

I asked Paul Steiger if he believes this model could be translated into a classic business. After all, why not gather half a dozen non-competiting news outlets, happy to split the price of large journalistic projects — each costing from $100,000 to $200,000 to produce — in addition to a small fee from local news? Paul Steiger says it cannot be made to work. To sum it up, by asking a newspaper or a TV network to pay, ProPublica would directly compete with their clients’ internal economics. Inevitably, someone will say, hey, last year, we paid x thousands dollars in fees for ProPublica’s stories, that’s the equivalent of y staffers. Not to mention the state of the news industry with, in fact, very few companies willing (and able) to pay extra editorial costs. The consequence would be a down spiral: deprived of the vast audience it now enjoys, the organization would have a hard time attracting clients for its content, nor would it be able to attract donations. Fact is, such syndication doesn’t work. California Watch, which operates on the same beat as ProPublica, burns more than $2 million a year but collects less than… $30,000 dollars in syndication fees.

That’s why ProPublica plans to stick to its original structure. Next year, Paul Steiger will step down as ProPublica’s editor-in-chief and chief executive, he’ll become executive chairman, a position in which he will spend most of his time raising money for the organization. As it stands today, ProPublica is on a sound path. The first two years of operation were solely funded by the Sandler family, for about $10 million a year. This year their contribution will be down to $4 million, with $6m coming from other sources. In 2013, the breakdown will be $3m and $7 million. Not only did ProPublica put itself at the forefront of the public interest, high quality, digitally boosted, modern journalism, but it also created a sustainable way to support it.

frederic.filloux@mondaynote.com